On July 9, 2024, the U.S. Department of Homeland Security (the “DHS”) released a 2024 Uyghur Forced Labor Prevention Act (“UFLPA”) Strategy.
On December 23, 2021, the US enacted the UFLPA, which bans the import of goods produced with forced labor from the Xinjiang Uyghur Autonomous Region (the “XUAR”). Under the UFLPA, goods mined, produced or manufactured wholly or in part in the XUAR are presumed to be produced with forced labor. Importers must prove that these goods are not produced with forced labor for them to be released for import.
According to the U.S. Customs and Border Protection’s (“CBP”) statistical information as of September 1, 2024, since the UFLPA’s inception, 9,791 shipments worth USD 3.56 billion have been detained, with 3,976 shipments denied entry and 4,573 released. Detained goods included electronics, apparel, industrial materials and agricultural products, primarily from countries including Malaysia, Vietnam, Thailand, China and India.
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Expanded UFLPA Entity List |
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38 entities have been added to the UFLPA Entity List. These include (i) entities in the XUAR producing goods with forced labor, (ii) those working with regional authorities to recruit, transport, transfer, harbor or receive forced labor from persecuted groups in the XUAR, (iii) those exporting goods produced by the entities referenced in points (i) and (ii) mentioned above to the US, and (iv) facilities and entities that source material from the XUAR or from persons working with regional authorities.
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Goods produced by these entities are subject to the rebuttable presumption and are prohibited from being imported into the US, unless the importer can demonstrate with clear and convincing evidence that the goods were not made with forced labor.
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Addition of High Priority Sectors |
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Previously, apparel, cotton and cotton products, silica-based products (including polysilicon), tomatoes and downstream products were designated as “high-priority sectors.”
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In 2024, polyvinyl chloride (“PVC”), aluminum and seafood have been newly designated as high-priority sectors:
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PVC and aluminum are used extensively in flooring, automotive and other downstream industries. The XUAR produces over 10% of the world’s PVC and 15% of China’s aluminum. |
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China is the largest exporter of seafood to the US, and may be involved in many tiers within the supply chain. |
Companies, particularly those with complex supply chains in industries like automotive and electronics, must enhance oversight to avoid links with forced labor in the XUAR. Recent cases, such as (i) Volkswagen’s voluntary suspension of certain imports due to the inclusion of parts from an entity on the UFLPA Entity List, and (ii) the Senate Finance Committee’s report criticizing automakers for their complicity with forced labor, highlight the importance of diligent supply chain management.
The expansion of high-risk sectors necessitates increased vigilance from businesses involved in those sectors and related industries like automotive, electronics, machinery and batteries. They must proactively ensure compliance within their supply chains to mitigate risks.
On August 8, 2024, the DHS announced the addition of five entities to the UFLPA Entity List, which included those mining nonferrous metals or manufacturing magnesium products. This underscores the need for ongoing supply chain due diligence across various sectors. Proactive measures and robust due diligence frameworks are essential to adhere to the evolving US regulatory requirements.
