Earlier this year, U.S. Customs and Border Protection (CBP) released a statement on its website that it would be issuing letters to importers identified as having previously imported merchandise from locations or entities potentially subject to the Uyghur Forced Labor Prevention Act (UFLPA).  Well, CBP stuck to its word and just recently released two sample Known Importer Letters.

One of the letters is specifically directed to Customs Trade Partnership Against Terrorism^[1] (CTPAT) members,^[2] while the other is directed to other U.S. importers. Both letters notify recipients that they “previously imported merchandise from locations or entities potentially subject to the Act.”  The CTPAT letters also indicate that “subsequent entries of such merchandise may result in, among other things, suspension or removal from the CTPAT program, seizure, forfeiture and/or penalties, or other appropriate action under the customs laws.”  The non-CTPAT letters indicate that “any future entries of such merchandise may be subject to CBP enforcement action, including seizure, forfeiture and/or penalties, or other appropriate action under the customs laws.”  You can view the text of each letter here.

In each letter, CBP urges importers to be proactive and closely review their supply chains to ensure that goods or materials are not sourced from Xinjiang in violation of the UFLPA.  The burden is on importers to apply due diligence, effective supply chain tracing, and supply chain management to ensure all imports are free from forced labor.

If you or your organization have not received a Known Importer Letter from CBP, this does not mean your organization is in compliance with the UFLPA or that your supply chain is free from forced labor.  All organizations are expected to review their supply chains thoroughly to ensure goods are not produced with forced labor.

In addition to the Known Importer Letters, on May 20, 2022, the CBP released guidance on enforcement mechanisms under the UFLPA.  CBP’s detention authority for goods imported from Xinjiang arises under 19 CFR § 151.16.  Pursuant to 19 CFR § 151.16 (b), within the 5-day period (excluding weekends and holidays) following the date on which merchandise is presented for CBP examination, CBP shall decide whether to release or detain merchandise. Merchandise that is not released within such a 5-day period shall be considered to be detained merchandise.

Under 19 CFR § 151.16 (c), if a decision to detain merchandise is made or the merchandise is not released within the 5-day period, CBP shall issue a notice to the importer or other party having an interest in such merchandise no later than 5 days after such decision or failure to release.^[3]  The notice of detention is not to be construed as a final determination as to the admissibility of the merchandise.  Final determination with respect to the admissibility of detained merchandise will be made within 30 days from the date the merchandise is presented for CBP examination, and such determination may be the subject of a protest.^[4]  19 CFR § 151.16 (e).

CBP anticipates releasing additional strategy and guidance in advance of the UFLPA taking effect on June 21, 2022.  We are tracking the CBP releases and UFLPA closely, so stay tuned for additional updates.

[1] CTPAT is a voluntary public-private sector partnership that works with CBP and the trade community to strengthen international supply chains and improve US border security.  The Security and Accountability for Every Port Act of 2006 provided a statutory framework for the CTPAT program and imposed strict program oversight requirements.

[2] The members include U.S. importers/exporters, U.S./Canada highway carriers; U.S./Mexico highway carriers; rail and sea carriers; licensed U.S. Customs brokers; U.S. marine port authority/terminal operators; U.S. freight consolidators; ocean transportation intermediaries and non-operating common carriers; Mexican and Canadian manufacturers; and Mexican long-haul carriers, all of whom account for over 52 percent (by value) of cargo imported into the U.S.

[3] The contents of the notice are outlined in 19 CFR § 151.16, which you can view here.

[4] 19 USC § 1514 outlines the Protest process against decisions by CBP regarding any detained merchandise.