The CBP has issued guidelines for the need for consent under Uighur forced labor

Key Takeaways:

  • Beginning June 21, 2022, all products, in whole or in part, manufactured in the Xinjiang region or by UFLPA entity-listed companies will be deemed to have been made by force and will not be allowed to enter the United States.
  • The CBP must provide “clear and credible” evidence to reject the imposition of forced labor by importers.
  • The guidelines recently published by the Biden administration describe the documentation required for the release of a detained consignment and the due diligence of the supply chain.

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On June 13, 2022, the U.S. Department of Homeland Security’s Customs and Border Protection (“CBP”) issued guidelines regarding the requirement of consent for importers under the Uyghur Forced Labor Prevention Act (“UFLPA”), starting June 21, 2022. Effective. Under the UFLPA, all products manufactured in whole or in part in the Xinjiang Uyghur Autonomous Region of China (“XUAR”), or manufactured by companies listed on the UFLPA entity, are considered to be made by forced labor, and other parts of the U.S. Or applies to shipped products and includes inputs created in XUAR. When the UFLPA comes into force on June 21, 2022, importers must present “clear and credible” evidence to refute the assumption of forced labor after the seizure of an invoice. Importers should be aware that the restrictions under the UFLPA are more stringent than the current restrictions under the Tariff Act on the import of goods made with compulsory labor.

The CBP’s new guidelines for importers provide information on what evidence is required from importers to overcome the assumption that products are made with forced labor in order to release a seized consignment. The guideline describes the arrest / release process and provides information on supply chain diligence, tracing and management. The directive has been in place since December 23, 2021, when President Biden signed the UFLPA Act, which is expected by industry, especially importers of goods from China.

In addition to the guidelines, the CBP will publish an upcoming “UFLPA strategy”. The UFLPA strategy will require specific due diligence for importers who must adhere to the UFLPA strategy in order to overcome the contradictory assumptions that the seized goods are made by forced labor. In addition to the UFLPA strategy, the UFLPA will also have a list of UFLPA entities working on the XUAR or working with the XUAR government to form an entity to forcibly remove labor from the region. All items produced by entities on the UFLPA Entity List are considered to have been made by force and are prohibited from entering the United States, even if such items do not originate in XUAR. Both the UFLPA strategy and the UFLPA Entity List are scheduled for publication by June 21, 2022.

The key provisions of the new CBP guidelines are as follows:

General provisions

  • Under the UFLPA, an importer will have 30 days to challenge detention instead of the 90-day period under the Customs Act, which currently prohibits the importation of all goods made by forced labor in the United States. Subsequently, the UFLPA revoked the Withhold Release Order (“WRO”) previously issued on cotton from XUAR and products manufactured by Xinjiang Production and Construction Corps. The CBP issues evidence that WROs issue rationally – but not conclusively – that a product is made with forced labor in order to prevent such products from entering the United States.
  • Upon seizure of an invoice, importers must (a) respond to all CBP requests for information on merchandise subject to CBP review; (B) demonstrate by clear and convincing evidence that good, warehouses, goods or merchandise were not mined, produced or manufactured by full or partial forced labor, and (c) proper labor processes, effective supply chain tracing, and supply chain management arrangements. Ensures that they do not import any products made in whole or in part by forced labor.
  • If an importer believes that the seized consignment is outside the scope of the UFLPA, an importer may provide the CBP with information that the imported goods are taken entirely from outside XUAR and have no connection with the entities on the UFLPA entity list. If the CBP determines that the information provided by the importer proves that the goods are outside the scope of the UFLPA, the importer does not have to exceed the UFLPA rebuttable assumption and the CBP will release the invoice.
  • If an importer demonstrates with clear and convincing evidence that the goods were not made with full or partial forced labor, the CBP will provide an exception to the UFLPA assumption and allow the goods to be imported into the United States. And submit a report to the public in order to identify the good and the evidence considered to reach a conclusion confirming an exception.

Due process of perseverance

The guidelines state that importers should be able to provide CBP documentation with due diligence, which may include the following:

  • Involvement with suppliers and other stakeholders to assess and address forced labor risks;
  • Mapping the supply chain and forcing labor risk assessment along the supply chain from raw materials to production of imported goods;
  • The written supplier code of conduct prohibits the use of compulsory labor and addresses the risk of using Chinese government labor projects;
  • Compulsory labor risk training for employees and agents who select and communicate with suppliers;
  • Monitoring supplier compliance with the Code of Conduct;
  • Identification of any compulsory labor conditions or termination of supplier relations if remedies are not possible or not completed on time;
  • Independent verification of the implementation and effectiveness of appropriate diligence measures; And
  • Publicly report on performance and engagement in its proper working system.

Supply chain tracing information

The guidelines provide examples of the following information that importers may provide (or request to be supplied by the CBP) to display their imports (1) not subject to UFLPA because their supply chain is completely outside Xinjiang and unlisted. Entity or (2) to show that their importation is compulsory labor-free and in compliance with the UFLPA.

Evidence related to the overall supply chain

  • A description of the supply chain, including imported goods and components related to all stages of mining, production, or production;
  • The role of companies in the supply chain, including suppliers and exporters (for example, CBP must determine whether a supplier is also a manufacturer);
  • A list of suppliers associated with each step of the manufacturing process by name and contact information (including address, email address and phone number); And
  • Affidavits from each company or entity involved in the manufacturing process.

Evidence relating to goods or any of its components

  • Purchase order
  • Invoices for all suppliers and sub-suppliers;
  • Packing list
  • Materials bill;
  • Original certificate;
  • Payment record;
  • Seller inventory record with dock / warehouse receipt;
  • Shipping records including manifest and leading bills; And
  • Import / Export record.

Evidence related to mine, producer, or manufacturer

Regarding information relating to a mine, producer or manufacturer, the guidelines call for the evidence listed above because it relates to the commodity or its raw material components. For high-risk products such as cotton and polysilicon, however, the guidelines call for additional evidence, including:

  • Mining, production, or production records;
  • Documents that allow CBP to trace the raw materials of excavated, manufactured or manufactured goods;
  • Production order;
  • Factory production capacity report for commodities;
  • Factory site inspection report by importer, a downstream supplier from this factory, or third party specialist; And
  • Evidence that the material input volume of the material matches the output volume for the product produced.

Product-Specific Supply Chain Tracing Documentation

The appendix to the guidelines also provides specific guidelines for supply chain documentation that importers may consider submitting to high-risk products such as cotton, polysilicon and tomato. The guidelines note that appendix lists are incomplete and the CBP may request additional documentation based on individual circumstances.

Foley Hoag’s Trade Prohibition and Export Control and Global Business and Human Rights practice groups provide guidance on compliance with these laws and regulations and help clients implement best practices for supply chain management and develop individually compliant compliance practices.

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