In just six months, the number of entities on the U.S. Uyghur Forced Labor Prevention Act (“UFLPA”) Entity List has increased by over 50 percent. The heightened activity is prompted by the publication of the 2024 Updates to the Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China in which the Forced Labor Enforcement Task Force (“FLETF”) identified new high-priority sectors for enforcement.
Newest Additions to the UFLPA Entity List
On November 22 the FLETF added 29 new entities based in the People’s Republic of China to the UFLPA Entity List. Twenty-four of these entities were added on the basis that the FLETF has reason to believe they are sourcing materials, specifically agricultural products such as tomatoes, from the Xinjiang Uyghur Autonomous Region (“XUAR”). The remaining five were added due to their collaboration with the government of Xinjiang to recruit Uyghurs and other persecuted groups into forced labor and transfer them outside of the XUAR.
These new additions bring the total number of entities on the UFLPA Entity List to 107. Entities on the list account for over sixteen industries, including textiles, agriculture, steel, aspartame, polysilicon, plastics, batteries, electronics, food additives, aluminum, polyvinyl chloride (PVC), seafood, and footwear. The FLETF has three main bases for adding entities: (1) entities that mine, produce, or manufacture wholly or in part any goods with forced labor; (2) entities working with the government of Xinjiang to recruit, transport, transfer, harbor, or receive forced labor or members of persecuted groups out of Xinjiang; and (3) entities that source material from Xinjiang or from persons working with the government of Xinjiang for purposes of the “poverty alleviation” program or “pairing assistance” program.
Process for Adding Entities to the UFLPA Entity List
The FLETF is an interagency task force chaired by the Department of Homeland Security’s Under Secretary for Strategy, Policy and Plans and comprised of representatives from the Office of the U.S. Trade Representative and Departments of Labor, State, Commerce, Justice, and the Treasury. Additionally, the Departments of Agriculture and Energy, U.S. Agency for International Development, U.S. Customs and Border Protection (“CBP”), U.S. Immigration and Customs Enforcement Homeland Security Investigations, and National Security Council are granted observer status.
Any of these agencies can submit a recommendation to the FLETF Chair to include an entity on the UFLPA list. However, members of the public and other organizations may submit information regarding a potential candidate for the entity list. After the member agencies review the recommendation, a vote is taken in which a majority of the members must vote in favor of adding the entity to the list.
Strategic Industries Being Detained
CBP continues to pursue aggressive enforcement in the form of import detentions as it applies the rebuttable presumption under the UFLPA that goods produced by any of the listed entities, or merchandise produced, or manufactured wholly or in part in the XUAR is prohibited from entering the United States. According to data from CBP’s interactive dashboard on UFLPA enforcement statistics covering fiscal years 2022-2024, a little over 50 percent of shipments detained under the UFLPA are ultimately denied entry into the United States. In contrast, a little under 50 percent of detained shipments have been ultimately released by CBP.
The top three countries of origin for detained shipments under the UFLPA are Malaysia, Vietnam, and Thailand. Only 10 percent of detained shipments list China as the country of origin, which indicates that CBP is not just targeting shipments coming directly from China. About half of all shipments detained to date have been electronics. Apparel, footwear, and textiles as well as industrial and manufacturing materials are also top industries.
This is in line with the designated high-priority sectors that the FLETF has identified in its Strategic Plans. The initial UFLPA Strategy issued in June 2022 identified apparel, cotton and cotton products, silica-based products including polysilicon, and tomatoes as high-priority sectors. In the 2024 Updates, the FLETF identified polyvinyl chloride (PVC), aluminum, and seafood as new high-priority sectors for enforcement going forward. Around 10 percent of the world’s PVC production takes place in the XUAR which, according to the 2024 Update, has been significantly expanded by the government. State-owned enterprises are known to be involved in PVC production and are making use of the government’s labor-transfer programs. Similarly, 9-12 percent of the world’s aluminum is produced in the XUAR with the participation of private and state-owned companies, some of which have been singled out in independent forced labor reports. On the other hand, while not located in the XUAR, the seafood industry has been found to make use of labor programs targeted towards Uyghurs and other persecuted groups, particularly in Shandong Province. This means not only should importers be aware of any supply-chain connections to the XUAR, but also of supply-chain ties to any government labor programs using Uyghurs or other persecuted groups regardless of location.
Admissibility Review
The rebuttable presumption mechanism of enforcement means that CBP presumes any goods made wholly or in part in the XUAR are tied to forced labor unless the importer proves otherwise. With the increased efforts in enforcement and targeting of new high-priority sectors, importers should assess the risk in their supply chains, especially if tied to a sector of concern.
Shipments detained by CBP due to UFLPA concerns must undergo an admissibility review. If confronted by this situation, importers should be aware of their options: export the goods to another market, destroy the goods, manipulate the good, or request an exception to the rebuttable presumption. If selecting the fourth option, importers have 30 calendar days to prove their goods were not made with forced labor with “clear and convincing evidence.”
Cassidy Levy Kent routinely advises clients on customs and enforcement matters including the UFLPA. Please contact CLK’s customs and supply chain compliance team if you have questions or require assistance.