U.S. Customs and Border Protection’s (“CBP”) implementation of the Uyghur Forced Labor Prevention Act (“UFLPA”) remains a work in progress, as importers work to mitigate shipment detentions and respond to UFLPA reviews and enforcement actions. Emerging best practices may guide stakeholders as they navigate these uncertainties.

Develop a Due Diligence System

Due diligence systems allow companies to proactively evaluate forced labor risks within their supply chains through comprehensive information gathering and robust risk assessments, which can mitigate the legal and reputational consequences of forced labor.

To establish a due diligence system, a company should:

• Continuously collect information on Tier 1 – Tier 3 suppliers, to maintain comprehensive supply chain traceability;

• Incorporate robust geographic and product-relevant risk assessments;

• Develop policies that are responsive to the company’s unique risk profile and aligned with international standards; and,

• Proactively monitor for future risks.

Be Proactive

An effective due diligence system is essential to facilitating imports. An effective due diligence system will:

• Safeguard against an importer’s suppliers engaging in forced labor;

• Consist of updated policies and supplier standards to express a zero tolerance for forced labor;

• Facilitate regular engagement with suppliers to offer training and encourage information sharing that maximizes reliability.

A due diligence system is critical because UFLPA and the original forced labor import ban, under Section 307 of the Tariff Act of 1930, as amended, affirm the United States’ zero tolerance for the import of goods believed to have been made with forced labor.  Both laws prohibit the importation of goods “manufactured wholly or in part” with forced labor. Thus, there is no de minimis standard allowing for entry of goods that have only a small quantity of potentially violative inputs. One bad apple spoils the bunch, costing importers nearly $20 million in denied shipments in 2023 YTD.

In recent months — including at CBP’s 2023 Trade Facilitation and Cargo Summit — CBP and other agency members of the Forced Labor Enforcement Task Force (“FLETF”) have consistently emphasized that importers should “know [their] supply chain,” underscoring the heightened expectation that importers adopt effective due diligence standards. For the importer, this may mean adopting new policies, supplier agreements and trainings that align with emerging best practices. Dedicating supply chain staff, authorized to implement and enforce such updated policies, can signal to CBP an importers’ seriousness regarding forced labor compliance.

Be Organized

As part of an effective due diligence system, importers should have access to information that indicates a product’s evolution from raw materials to a finished good. Indeed, UFLPA’s rebuttable presumption shifts the burden of proof to importers to provide CBP clear and convincing evidence that shipments were not produced using forced labor or that UFLPA does not apply to the shipment. While CBP takes an average of two weeks to review evidence, reviews are frequently delayed because CBP deems evidence incomplete or poorly formatted. While only 500 shipments have been denied under UFLPA to date, over 1,700 shipments are under review. These shipments represent over $540 million in shipment value and innumerable reputational costs from delayed customer deliveries.

Potential legislative or administrative changes to UFLPA enforcement may further increase seizures or lengthen reviews. In April, U.S. lawmakers on the bipartisan Congressional-Executive Commission on China expressed concern over potential UFLPA enforcement gaps, such as deceptive shipping practices and direct-to-consumer shipments. At the commission’s first hearing on UFLPA’s implementation, House Commission Chair Rep. Chris Smith (R-New Jersey) expressed the sense of Congress:

that UFLPA will prick the consciences of corporate actors and encourage them to scour their supply chains to make sure they are free from the taint of forced labor. For those that are incorrigible and seek to skirt the law, we will seek enforcement action and bring public scrutiny to bear.

Senate Chair Jeff Merkley (D-Oregon) reiterated the same: “Compliance with this law requires a paradigm shift . . . . Companies that resist compliance or look to exploit loopholes need to be held accountable.”

It is essential for importers to take UFLPA seriously by developing a due diligence system and effectively maintaining traceability information to facilitate CBP’s review and protect against future enhanced scrutiny. With readily available and reliable supplier data and clear submission formatting, CBP will be able to easily review all import information, facilitating an importer’s success importing goods.

Bradford Ellison also contributed to this article.