In this session, recorded at PI Apparel’s Supply Chain Forum in New York in 2022, we hear from Amanda Levitt, Partner at Sandler, Travis & Rosenberg, where she talks about the Uyghur Forced Labor Prevention Act and its implications for the industry.
The newly effective Uyghur Forced Labor Prevention Act (UFLPA) is extensive in breadth and establishes a rebuttable presumption that the import of any goods, wholly or in part, from the Xinjiang Uyghur Autonomous Region (XUAR) of China are prohibited from entry into the United States.
There is no de minimis requirement in these restrictions – if a single thread of rayon from XUAR makes its way into the lining of a jacket, for example, that finished product will not be allowed into the United States.
As we have seen an unprecedented amount of detentions by CBP in recent years under Withhold Release Orders (WROs) and the UFLPA, it is prudent for any company with a global supply chain to deepen their visibility into their supply chain and enact supply chain controls to minimize risk of detention or non-compliance with U.S. forced labor laws.
This discussion walks through the legal authority and best practices for companies to consider in this new era of Forced Labor Enforcement.
Topics discussed include:
- An Overview of the Uyghur Forced Labor Prevention Act (UFLPA): the newly effective UFLPA, beginning with general U.S. forced labor laws and then diving into the specifics of the UFLPA and its processes.
- Historical Context and Enforcement Mechanisms: Amanda explains that U.S. forced labor laws, in place since the 1930s, prohibit imports made with forced, convict, or indentured labor. She discusses the primary enforcement tool used by Customs, the Withhold Release Order (WRO), and how it has been increasingly applied since 2016, especially concerning the genocide in Xinjiang.
- Scope and Impact of the UFLPA: The UFLPA, effective June 21st, presumes that goods made in whole or in part from the Xinjiang region of China or by listed entities are made with forced labor. This presumption affects a wide range of commodities, emphasizing the significant scale of Xinjiang in global supply chains, especially for apparel.
- Compliance Strategies and Best Practices: She advises companies on compliance strategies, emphasizing the importance of gaining visibility into their supply chains. She suggests mapping the entire supply chain, maintaining a thorough document trail, and securing attestations from manufacturers that goods were made without forced labor or materials from Xinjiang.
- Detention Notices and Exclusion Notices: Explaining the practical aspects, she describes how detention notices are issued by Customs and how companies can respond. She highlights the importance of providing detailed documentation to rebut the presumption of forced labor and discusses the process and implications of receiving an exclusion notice.
- Global Enforcement Trends and Future Outlook: She mentions that U.S. Customs is receiving increased funding for forced labor enforcement and anticipates more stringent enforcement in the future. She also notes that forced labor is becoming a global focus, with the European Union proposing similar import bans.
- Recommendations for Companies: To prepare for heightened enforcement, she suggests companies should know their suppliers thoroughly, conduct risk assessments, update their terms and conditions with suppliers, and ensure their import documents are comprehensive and transparent.
A full transcript of this session can be found here.