The long-debated Uyghur Forced Labor Prevention Act (UFLPA) has now passed both chambers of Congress with strong bipartisan support, and President Biden is expected to sign the UFLPA into law on or before December 30, 2021. This legislation has the potential to broadly impact industries and companies with supply chain linkages to China.
Application of “Rebuttable Presumption” to Ban Imports
The overarching goal of the UFLPA is to prevent goods made with forced labor by Uyghurs and members of other persecuted groups in the People’s Republic of China from entering the U.S. The UFLPA will require the Commissioner of Customs and Border Protection (CBP) to apply a “rebuttable presumption” to any goods that are produced wholly or in part in the Xinjiang Autonomous Uyghur Region (XUAR) or by an entity included on one of the forthcoming entity lists. Such goods will effectively be banned from import under Section 307 of the Tariff Act of 1930, unless the importer can demonstrate applicability of a narrow and difficult to meet exception.
An exception from the rebuttable presumption is available only where the Commissioner of CBP determines that the importer:
Fully complied with new importer guidance and any regulations issued to implement that guidance;
Completely and substantively responded to all inquiries for information submitted by the Commissioner of CBP to ascertain whether forced labor was used; and
Provided “clear and convincing evidence” that the goods were not mined, produced, or manufactured wholly or in part by forced labor.
Under the UFLPA, the Forced Labor Enforcement Task Force – a cross-agency task force established under the United States-Mexico-Canada Agreement Implementation Act – must publish a government strategy that includes the entity lists and the new importer guidance that will be needed to overcome the presumption (among other items). The importer guidance must specifically cover:
Due diligence, effective supply chain tracing, and supply chain management measures;
The type, nature, and extent of evidence that demonstrates that goods originating in the People’s Republic of China were not mined, produced, or manufactured wholly or in part in the XUAR; and
The type, nature, and extent of evidence that demonstrates that goods originating in the People’s Republic of China were not mined, produced, or manufactured wholly or in part with forced labor.
The rebuttable presumption becomes effective and enforceable on the same date as the deadline for publication of the strategy – i.e., within 180 days of enactment – which may initially make it particularly difficult to meet the exception.
Within 30 days of enactment, the Task Force must publish in the Federal Register a notice soliciting public comments on “how best to ensure that goods mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China, including by Uyghurs, Kazakhs, Kyrgyz, Tibetans, and members of other persecuted groups in the People’s Republic of China, and especially in the Xinjiang Uyghur Autonomous Region, are not imported into the United States.” Within 45 days of the close of the comment period, the Task Force must hold a hearing with testimony on certain measures to be taken to prevent the import of goods produced with Uyghur (and other persecuted groups) forced labor. Interested parties should consider participating in the public comment or public hearing processes leading up to the publication of the strategy.
The UFLPA also authorizes additional sanctions under the Uyghur Human Rights Policy Act of 2020, and will require the Secretary of State to develop a diplomatic strategy to address forced labor in the XUAR. This diplomatic strategy will include a plan to coordinate and collaborate with NGOs and private sector entities to raise awareness of the goods produced wholly or in part in the XUAR, and a plan for working with private sector entities seeking to conduct supply chain due diligence to prevent the importation of goods made wholly or in part with forced labor.
CBP will begin applying the rebuttable presumption 180 days from enactment, which could be as soon as June 2022.