Less than a month ago, we posted about a big week for U.S. forced labor regulation. That week saw, among other developments, record expansion of the Uyghur Forced Labor Prevention Act Entity List to include 26 China-based textile companies. The last several days also have been active, with Chinese suppliers being targeted from multiple directions.
Yesterday, the U.S. Department of Homeland Security added three China-based seafood, aluminum and footwear companies to the UFLPA Entity List. Those additions are discussed in DHS' press release. U.S. Customs and Border Protection will apply a rebuttable presumption that goods produced by these entities will be prohibited from entering the United States.
Since the UFLPA was signed into law in December 2021, 68 entities have been added to the UFLPA Entity List. According to DHS, over the last year, the Entity List has grown by over 200%. The entities on the list come from a wide range of sectors, including agriculture, apparel, batteries, chemicals, electronics, food additives, household appliances, nonferrous metals, polysilicon and plastics.
Turning to the second UFLPA development, last Thursday, five Republican members of Congress sent letters to DHS alleging that two major Chinese battery manufacturers have supply chains connected to forced labor. The letters request that these entities also be added to the UFLPA Entity List.
The letters were sent by House Select Committee on the Chinese Communist Party Chairman John Moolenaar (R-MI), Senator Marco Rubio (R-FL), House Homeland Security and Government Affairs Committee Chairman Mark Green (R-TN), Homeland Security and Government Affairs Subcommittee Chairman Carlos Gimenez (R-FL) and Rep. Darin LaHood (R-IL). The letters are available here and here.
Three quick take-aways
- The UFLPA has been a game changer for forced labor compliance. Given its breadth, the UFLPA has created additional product detention risk and compliance uncertainty for companies across a broad range of industries. Thousands of shipments from several countries have been detained by CBP since the UFLPA took effect. See here for CBP's most recent UFLPA enforcement statistics.
- One of the few areas where Democrats and Republicans seem to agree is being tough on China trade. Expect UFLPA enforcement to remain robust, with all arrows pointing toward increasing enforcement.
- UFLPA enforcement and current, pending and proposed human rights disclosure and due diligence requirements and forced labor bans across many jurisdictions are increasing the importance of risk-based supply chain compliance policies and diligence.
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