UFLPA Strategy Includes New Entity List, but Leaves Many More Details to Come

The strategy says that CBP "plans to adopt" translation technology, advanced search engines to link companies suspected or known to use forced labor "with their related business structures and transactions." It said that if it can automate translation of pages written in Chinese it could "significantly enhance forced labor enforcement efforts by allowing CBP to quickly and accurately identify those entities that attempt to bypass the law through fraudulent documentation or shipping practices." But the agency said all these technologies are still being assessed, as is the ability to use remote sensing "to support the digital traceability of raw materials sourced from Xinjiang."

It says that the State Department will work to identify companies that "participate in recruitment, transfer, receipt, or other facilitation of forced labor and labor transfer of members of persecuted groups," and will be able to recommend the addition or removal of companies to the UFLPA Entity List, found at pages 22-25 of the strategy, as will the Bureau of Industry and Security.

CBP says it will prioritize the "highest-risk goods based on current data and intelligence," but its priority sectors are the same ones that have already been identified through withhold release order actions -- apparel, cotton and cotton products, silica-based products (including polysilicon), and tomatoes and products made from cotton, polysilicon or tomatoes. They did not add PVC or luxury vinyl flooring, or iPhones, or other items that academic researchers have said have ties to Uyghur forced labor. They said that in addition to goods imported directly from Xinjiang, or from companies on the UFLPA Entity List, CBP will examine illegally transshipped goods to see if they have inputs from Xinjiang, "as well as goods imported into the United States by entities that, although not located in Xinjiang, are related to an entity in Xinjiang (whether as a parent, subsidiary, or affiliate) and likely to contain inputs from that region."

A blog post from Wiley issued June 21 said it's surprising that the document's entity list is fairly narrow. "The lists include, as expected, a number of Chinese companies subject to pre-existing WROs. They also include certain Chinese companies that are on the Department of Commerce’s Entity List due to their use of forced labor. However, the lists do not identify any companies not previously named in WROs. The lists do not include every company previously placed on the Entity List due to their involvement with forced labor in China. The lists also do not include any Chinese solar cell or solar module producers, even though several are known to have used polysilicon from the XUAR [Xinjiang Uygur Autonomous Region]," the lawyers wrote.

CBP said that while the $27.5 million CBP has received to ramp up enforcement is useful, it will need another $70 million in the coming fiscal year.

"The increase in staff actions at ports of entry and headquarters to enforce UFLPA provisions has the potential to overcome other trade-enforcement priorities and requirements that are risk-based, such as intellectual property rights, detection and interdiction of opioids and other contraband, duty collections, and antidumping and countervailing duty evasion cases," the document said.

Sen. Marco Rubio, R-Fla., the bill's foremost champion in the Senate, wrote in a published opinion piece: "If our customs agents enforce the UFLPA strictly, they will protect American consumers from unknowingly sending their hard-earned money to companies that use forced labor. Other countries may even follow America’s ethical leadership in an effort to end state-sponsored slavery.

"But we cannot take that outcome for granted. The Biden administration is under immense pressure from nationless corporations and the regime in Beijing to find loopholes and carve-outs that would effectively gut the new law. For example, CBP is under pressure to limit its detention of goods, particularly solar and cotton, to the smallest geographical region or sector possible."

Lawyers had warned importers that it would be better to gather evidence that the goods they are purchasing have no connection to Xinjiang or to Uyghurs than to have to prove that Xinjiang goods are not made with forced labor.

The document, as it laid out what importers would have to prove, said that companies could be asked to provide a "complete list of all workers at an entity subject to the rebuttable presumption," as well as evidence to demonstrate how wages were paid at each workplace in the entire supply chain, evidence to identify whether each worker comes from Xinjiang, and that worker's residency status; the number of workers in each job category compared with the total volume of goods produced; evidence that none of the employees was recruited or transferred with the involvement of the Chinese government, the Xinjiang Production and Construction Corps or entities on the UFLPA Entity List.