Uyghur Forced Labor Guidance Likely Vague; Importers Should Begin Due Diligence Efforts Now, Lawyer Says
Upcoming and much anticipated guidance on compliance with the Uyghur Forced Labor Prevention Act (UFLPA) could very well be less detailed than the trade community would like, so importers should treat it like “gravy” and focus on starting now on due diligence efforts in preparation for the new law’s effective date in June, customs lawyer Richard Mojica of Miller & Chevalier said.
Speaking during a webinar put on by his law firm and the Midwest Global Trade Association on April 21, Mojica said the guidance, which CBP is in the process of developing (see 2202150037), will likely be “helpful but only to a point.” It may be “high level,” and will prompt companies to do due diligence into their own supply chains,” Mojica said. But while it may provide “good data points to incorporate,” companies “need to start now, if we haven’t already, to incorporate due diligence so you are prepared to go above and beyond what the government is requesting,” he said.
The UFLPA, which takes effect June 21, 2022, creates a rebuttable presumption that goods made in Xinjiang were made with forced labor, and leaves it up to importers to demonstrate otherwise if their supply chain is connected to the Chinese province. It also requires the government to create a list of entities and products involved with forced labor. But though industry has called for the list to be made public, it’s still an open question whether it will be available as an aid to compliance efforts (see 2203160041), Mojica said.
Importers should prepare for the new law by mapping their supply chains, especially for high-risk goods, as set forth in a State Department advisory issued in 2020 and updated in 2021 (see 2107130046), said Mary Mikhaeel, also with Miller & Chevalier. They should also screen their suppliers to determine whether they have links to Xinjiang, and implement contractual provisions that require suppliers to cooperate with any UFLPA compliance efforts.
Meanwhle, the withhold release order remains CBP’s “primary mechanism” for forced labor enforcement, Mikhaeel said. The threshold is “very high” for importers to get their products released once detained under a WRO, though Mojica said work with CBP on the process is starting to bear fruit.
While Mojica has been unable to obtain release of his clients’ goods in many instances, a working relationship built with various CBP offices “over the past year or two” has also resulted in some success, he said. “We’re moving toward an environment where there is a process that can lead to the release of merchandise,” which has been a “very positive development.” Recently, importers and CBP have been becoming familiar with high risk supply chains, resulting in a “mutual understanding” of collaboration to achieve the release of goods with documentation that supports it, Mojica said.
“A lot of the press is on detentions” in the hundreds and thousands of shipments, based on forced labor, Mojica said. “However, the real news for us, I think, is the fact that this process is starting to yield positive results.”