US Customs and Border Protection (CBP) UFLPA Operational Guidance for Importers (CBP Guidance) was published on June 13, 2022 to assist importers in preparing for the UFLPA rebuttable presumption that goes into effect on June 21, 2022. This guidance should be reviewed in conjunction with the Department of Homeland Security (DHS) UFLPA Strategy that will be published on June 21, 2022.

Executive Summary

• US Customs and Border Protection (CBP) UFLPA Operational Guidance for Importers (CBP Guidance) was published on June 13, 2022 to assist importers in preparing for the UFLPA rebuttable presumption that goes into effect on June 21, 2022. This guidance should be reviewed in conjunction with the Department of Homeland Security (DHS) UFLPA Strategy that will be published on June 21, 2022.

• If an importer is able to provide documentation evidencing that imported goods and their inputs are sourced completely from outside the Xinjiang Uyghur Autonomous Region (XUAR) and have no connection to the entities identified on the UFLPA Entity List, the importer will not need to obtain an exception to the UFLPA (which requires a public report to Congress). In order to secure release, specific evidence including supply chain tracing documentation, is required to demonstrate that merchandise is outside the scope of the UFLPA.

• Importers requesting an exception to the rebuttable presumption may present evidence of the due diligence systems the importer has in place, thorough supply chain tracing documentation from raw materials to the imported goods, and information regarding supply chain management measures. Additional requirements apply to goods originating in China.

• CBP has identified specific documentation for companies that import products with a high-risk of forced labor, including cotton, polysilicon, and tomatoes.

• On Monday, June 27, 2022 from 2PM-3PM, Angela M. Santos and Christine Hintze will be presenting a webinar regarding UFLPA implementation and how companies can prepare. Register here to join the discussion.

Background

The Uyghur Forced Labor Prevention Act (UFLPA) was signed into law on December 23, 2021, which applies a rebuttable presumption that all goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region (XUAR) of China, or by entities identified on the UFLPA Entity List, are presumed to be made with forced labor and are prohibited from entry into the United States effective June 21, 2022. A background and summary of the UFLPA and the rebuttable presumption may be found in a previous alert that we published when the UFLPA was signed into law.

Enforcement of UFLPA 

CBP will target shipments for detention under the UFLPA through a variety of sources, including the UFLPA Entity List. As discussed in our previous alert, CBP has five business days following the date that merchandise is presented to CBP to decide whether to release or detain the shipment. If merchandise is not released during that time period, it is considered detained. Upon detention, CBP will issue a detention notice, which will provide the reason for detention (i.e., UFLPA), the anticipated length of the detention, as well as instructions to the importer regarding how to rebut the UFLPA presumption.

The importer has the following options to respond to the detention of a shipment:

1. Present an Immediate Export in-bond and request permission from the port director to export the shipment any time before an exclusion or seizure determination is made; or

2. Submit evidence to CBP to demonstrate that the merchandise is outside the scope of the UFLPA (i.e., that the imported merchandise and its inputs are sourced completely from outside of XUAR); or

3. Request an exception to the UFLPA rebuttable presumption. This request can be made during a detention, after an exclusion, or during the seizure process, and are subject to the corresponding administrative procedures. CBP will attempt to prioritize review of submissions made by Customs Trade Partnership Against Terrorism (CTPAT) Trade Compliance members in good standing. 

If applicable, the importer may also identify shipments that have identical supply chains to those that have been previously reviewed and considered admissible by CBP. 

CBP published a list of documentation to help demonstrate that merchandise is outside the scope of the UFLPA or to request an exception to the rebuttable presumption. This list is not exhaustive, and is intended to provide importers with flexibility in accordance with individual business practices. Documents and information listed must be submitted in English and should be well-organized to facilitate CBP’s review.

In the event that CBP determines that the shipment violates the UFLPA, an exclusion notice will be issued. Importers may protest the exclusion determination within 180 days. CBP must make a decision regarding the protest within 30 days after the protest is submitted, or the protest is deemed denied. Pursuant to 19 U.S.C. § 1595a; 19 C.F.R. Part 171, CBP may issue a Notice of Seizure to importers of shipments determined to be in violation of the UFLPA and refer the matter to the Fines, Penalties and Forfeitures (FPFO) officer at the port of entry. The importer may submit a petition to overcome the rebuttable presumption.   

Documentation and Information to Prove Merchandise Outside the Scope of the UFLPA

Release of detained goods will be more likely when an importer can establish that the goods were not produced in whole or part in XUAR and have no connection to the UFLPA Entity List. CBP suggested the following documentation that will be required for importers to demonstrate that merchandise is outside the scope of the UFLPA:
 

Supply Chain Tracing Information

Documentation and Information to Request an Exception to the Rebuttable Presumption

In the event that an importer cannot prove that imported merchandise does not have a nexus to XUAR or the XUAR Entity List, an exception to the UFLPA rebuttable presumption may be requested. The burden to meet the “clear and convincing” standard to obtain an exception is high.

• Due Diligence System Information: Engagement with suppliers and stakeholders on forced labor, mapping supply chain, written supplier code of conduct (and monitoring compliance therewith), training employees, remediation of forced labor conditions, independent verification of the implementation and effectiveness of due diligence system, as well as reporting performance and engagement.

• Supply Chain Tracing Information: Tracing documentation (listed above) that evidences no nexus to XUAR or a UFLPA Entity List, or to show that imports are free of forced labor and in compliance with the UFLPA.  

• Supply Chain Management Measures: Documentation demonstrating the internal controls to prevent or mitigate forced labor risk and remediate any use of forced labor identified, as well as evidence that documents provided are part of an operating system or an accounting system that includes audited financial statements.

Goods Originating in China

An importer of goods originating in China that requests an exception to the rebuttable presumption should provide the following documentation, in addition to the other documentation discussed above:

• Supply chain map identifying all entities involved in production of the goods;

• Information regarding workers at each entity involved in the production of the goods in China, such as wage payment and production output per worker;

• Information on worker recruitment and internal controls to ensure that all workers in China were recruited and are working voluntarily; and

• Credible audits to identify forced labor indicators and remediation of these if applicable.

Commodity-Specific Supply Chain Tracing Documentation

The CBP Guidance also provides a non-exhaustive list of “supply chain documentation that importers may consider submitting for commodities with a high-risk of forced labor,” outlined below: