UFLPA Entity List Seeing Expanding Commodity Scope, Analyst Says
Recent additions to the Uyghur Forced Labor Prevention Act Entity List (see 2309250033) mark a change in that they include companies that have not previously been on government denied party lists, and the range of commodities being looked at for forced labor violations is being expanded, Ethan Woolley of compliance risk advisory firm Kharon said during a recent webinar.
The first additions to the UFLPA entity list contained companies that were taken from the Bureau of Industry and Security's Entity List "because of their complicity in human rights violations in Xinjiang," or companies that already had withhold release orders being enforced against them by CBP, Woolley said. "These companies that have been added more recently aren't coming from those existing government lists," Woolley said. "So we see [the Forced Labor Enforcement Task Force] expanding beyond what's already existing from other government agencies and government lists, and so companies should expect that to continue to happen."
The "scope of commodities" that have been a focus for enforcement has expanded as well, Woolley said. Some of the companies that were added include Chinese battery manufacturer Camel Group Co. and Chinese spice manufacturer ChenGuang Biotech Group Co., Ltd. (see 2308020017). Woolley said these companies represent products that are "beyond the traditional scope" of cotton, polysilicon, and tomatoes that the industry is used to thinking about.
Woolley pointed to a FLETF strategy update in July in which the task force said it wanted to emphasize monitoring of other sectors outside of the initial "high-priority sectors for enforcement" (see 2308010038). The strategy specifically pointed to red dates and other agricultural products, vinyl products, aluminum products, steel products, lead-acid and lithium-ion batteries, copper, electronics, and tires and other automobile components (see 2308010038). Woolley said the CBP UFLPA Dashboard has shown "an uptick" in detentions from these sectors in the last few months.
Combined with recent increases in CBP funding for forced labor enforcement, "we can expect that the resources and sort of bureaucratic inertia behind the law are catching up with the expectations Congress placed on CBP almost two years ago when the law was passed," Woolley said. As UFLPA enforcement continues, he said, companies should think about forced labor enforcement and due diligence in a "similar way to sanctions evasion and export controls," when it comes to monitoring suppliers for "risk and evasion."
"You need to be doing a little bit of verifying," Woolley said. "Trust but verify, so to speak."