The Uyghur Forced Labor Prevention Act (UFLPA) took effect on June 21, targeting goods produced in China’s Xinjiang Uyghur Autonomous region. The region, which is central to the country’s cotton production, has been a topic of debate in recent years, as human rights groups claim the Chinese government has forced the Uyghur minority into forced labor camps.
In response, U.S. companies that source goods from China should brace for disruption, especially those in the apparel and textile industries.
According to Lisbeth Lyons, vice president of government and political affairs for PRINTING United, Promo Marketing’s parent organization, the UFLPA presents a “rebuttal presumption” that goods produced “wholly or in part” in the region have been made with forced labor, and are therefore not able to enter the U.S.
Importers can request exceptions, but for that to be successful they need to provide “clear and convincing evidence” that the products were not “mined, produced or manufactured” using forced labor in China.
The Department of Homeland Security will chair a Forced Labor Enforcement Task Force, which will develop and issue the enforcement strategy. Since the policy is so new, importers can expect confusion and delays, if not costly interruptions.
Despite this, industry groups like the National Retail Federation and the American Apparel and Footwear Association issued a statement supporting the passage of the UFLPA, claiming that the “situation in this region is of a scale, scope and complexity that is unprecedented in modern supply chains.”
The challenge for apparel sellers is that the rollout and enforcement is a bit unclear. There are resources online from Customs and Border Protection and the FLETF, advising importers on the process of detentions, exclusions and seizure, as well as evidence importers should provide to receive an exemption.
The best thing companies importing apparel and footwear from China can do is perform a thorough analysis of their supply chains to ensure that products have been manufactured in compliance of the new legislation (and that they can prove it), or perform a third-party audit. Lyons recommended the following actions:
Conduct supply chain due diligence: Do a deep dive into your supply chains related to China and consider a third-party audit or assessment to mitigate risk. Supply chain tracing or mapping is recommended.
Consider contract language: Add terms and conditions to contracts with suppliers that outlines your company’s code of conduct and explicitly prohibits sourcing goods that are produced using suspected forced labor.
Document and prepare: Be prepared to demonstrate compliance and to respond to potential CBP letters of inquiry. Be aware of any new FLETF enforcement guidance issued
The U.S. has taken previous steps to limit goods coming from China’s Xinjiang region, but this is the most sweeping legislation on the issue.
This is a necessary and admirable step by the U.S. government, but with any change in compliance norms or laws, there will be a period of confusion and adjustment necessary for suppliers and distributors.
