The northwestern territory of China, formerly known as the Xinjiang Uyghur Autonomous Region (XUAR), is an area of China that has a documented history of almost 2500 years and is the 8th largest country subdivision in the world. Home to a number of ethnic groups, this territory of China became famous for the Silk Route (Silk Road) that ran from its Eastern to its Northwestern Border for 1500 years.
Just like its history portrays, today the Xinjiang region of China remains largely nomadic. There are, of course, industrialized parts of the Xinjiang Uyghur Autonomous Region that actively participate in commerce and the global supply chain, mostly by exporting to neighboring countries.
The CBP flagged this area for producing goods through forced labor. In response, The Uyghur Forced Labor Prevention Act (UFLPA) was signed by President Biden on December 23rd, 2021. The UFLPA was enacted to ensure exporters from the XUAR have complied with specified conditions and, by clear and convincing evidence, are importing goods, wares, articles, or merchandise that were not produced using forced labor. Additionally, the Act mandates enforcement and diplomatic strategies around forced labor.
The most common goods exported from the Xinjiang Uyghur Autonomous Region are:
- Everything from oil to natural gas, salt and coal are all manufactured in Xinjiang.
- None of these chemicals are allowed for entry into the United States.
- Almost the entire apparel and footwear industry from Xinjiang is flagged for allegedly manufacturing under forced labor.
- Global brands are seeking deeper clarity on the materials, especially cotton, coming from this region.
- Agricultural Goods
- The list of 155 agricultural products barred from entry in the United States grows with the addition of tomatoes, pome, and stone fruits.
- 2 new countries add to the 77 already listed; Venezuela and Zimbabwe.
- Solar Panels
- It's estimated that nearly 50% of the world’s polysilicon comes from the Xinjiang region.
- Any solar company working in the Xinjiang region will be under additional scrutiny.
Understanding UFLPA Changes is Crucial for Every Importer, Exporter, and Business Operating On The Supply Chain
Anytime changes and updates are made to laws or regulations around the supply chain, it has implications for businesses that are felt almost immediately. Being a relatively new law, the UFLPA gives a path for importers and exporters to prove that their goods have not come from the Xinjian Uyghur Autonomous Region through forced or child labor.
For over 30 years ITC Diligence International Inc. has developed supply chain strategy for clients, expanded FTZ warehouse partners, and demonstrated a 4PL operator program that works seamlessly with logistic companies globally.
In response to the UFLPA updates, ITC Diligence International Inc., along with the CBP, has identified steps that businesses can take to ensure they are in compliance with and not negatively impacted by the recent updates in this law.
What can importers do?
- Establish and Maintain a Due Diligence Program
- Internally, every importer should have measures in place to prevent purchasing from and dealing with companies that engage in child or forced labor.
- The CPB has an active list of what goods have a high likelihood of being made through forced labor and where these good are most commonly made.
- Carefully assess Xinjiang Uyghur Autonomous Region and related supply chain risks
- If your company imports goods from XUAR, it is imperative that you get to know your suppliers.
- Take stock of the risks to your business and risks presented to the supply chain as a result of any goods being imported from the XUAR.
- Mitigate exposure to forced labor risks
- Whenever possible, mitigate and eliminate any exposure to forced labor.
- Ask the right questions to the right people to identify if your business is abating in forced or child labor.
- Be prepared to demonstrate compliance:
- Enforcement Strategy’s Due Diligence
- Supply Chain Tracing
- Supply Chain Management
- “What’s in your bag?”
- Be prepared to respond to CBP inquiries
- Demonstrate that your goods are not produced through forced labor.
- Goods cannot be mined or manufactured, wholly or in part, through forced labor.
The CPB and the United States Government take child and forced labor seriously. ITC Diligence International Inc. has made it a goal to end forced and child labor and demonstrates this by only working with companies that are in compliance with the UFLPA, and all other forced labor and child labor laws in the US.
To ensure compliance with regulation and new labor laws, reach out to the experts at ITC Diligence International Inc. With over 30 years of experience as a licensed customs broker and 4PL operator, the strategies implemented will help your business stay on top of supply chain challenges and law changes anytime they are enacted.