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This summer the United States’ efforts to combat forced labor will be front and center. The Uyghur Forced Labor Prevention Act (UFLPA) will be enforced starting June 21. The legislation passed both houses of Congress in December with bipartisan support and was signed by the White House. The U.S. had already stepped up anti-forced labor efforts, but this legislation raised the burden of proof to a new level. All goods produced in whole or in part from goods mined, grown, or produced in the Xinjiang Uyghur Autonomous Region (XUAR) will be presumed to have been produced with the assistance of forced labor and will be denied entry into the U.S.. It is up to the importer to offer a rebuttal by providing “clear and convincing” evidence that the goods were not produced with the benefit of forced labor. Clear and convincing evidence is defined as evidence that established the truth of a disputed fact by a high probability – but, hopefully the pending guidance will provide more information. In addition, the importer would need to be able to show that they have followed the guidance provided by Customs and have responded fully and timely to any Customs requests. The time period for submitting rebuttal documents will be 30 days, though an importer can request an extension.  If the rebuttal is accepted and an exception to the UFLPA is granted, it will be reported to Congress and will then be subject to public disclosure.

The U.S. government is required to provide trade compliance guidelines clarifying the evidence that needs to be provided to rebut the forced labor presumption. They are also providing an entities list identifying the suppliers that carry the same presumption of a forced labor input; this list will not be all inclusive. This guidance is not expected until June 21, which is the effective date of UFLPA. Therefore, goods in transit are facing uncertain treatment upon their arrival.

Customs sent letters to importers, whom they know have received goods from shippers in the XUAR, notifying them of the risk and advising  they review their supply chain to ensure that all of their goods are free of components produced with forced labor. Any importer who has received a letter should immediately assess whether they have sufficient tracing information to ensure compliance. It is expected that importers will have an opportunity to export any detained goods prior to their seizure, as is the current policy on Withhold Release Orders (WRO). However, this option will likely not be available if there is an affirmative finding of forced labor.

Since UFLPA covers goods which are produced in part from the XUAR, an importer needs to know not only the origin of manufacturer, but also the origin of component materials used in their production. For example, a garment imported from any country or region could contain cotton grown in the XUAR and, therefore, be subject to detention. Goods commonly produced in this region include. but are not limited to, cotton, tomatoes, polysilicon, and aluminum. These are products well-suited to be sold as component materials for manufactured products.

While Customs will enforce the ban on goods from the XUAR, there are other governmental agencies involved in the administration and enforcement of UFLPA. The forced labor enforcement task force (FLETF) is chaired by the Secretary of Homeland Security and includes the U.S. Trade Representative’s Office, the Departments of Labor, Commerce, State, Justice, and the U.S. Agency for International Development. The National Security Council and Domestic Policy Council participate as observers.

There are some resources currently available that provide helpful information: The Customs’ forced labor and UFLPA web pages, and the Department of State’s Xinjiang Supply Chain Business Advisories. The most useful information is expected to be the guidance provided on June 21.

UFLPA’s reliance on a rebuttable presumption differentiates it from other enforcement action being taken against forced labor, but it is only part of a much larger effort. Customs is seeking to take on forced labor and related human trafficking anywhere in the world. The number of WROs issued by Customs has increased dramatically over the past two years and these are expected to continue growing with more regions and products.

 

Best Regards,

Sam McClure, LCB

Director of Compliance & Customs Services

 

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Meet one of CVI’s Customs Brokerage & Compliance experts, Sam McClure:

Sam serves as Director, Compliance and Customs Services for CVI. He serves as CVI’s corporate compliance officer and is responsible for overseeing all aspects of our Customs related services, including growth.

Sam started his career in 1977 with Waters Shipping Company in Charlotte, NC. He began as a document runner, soon becoming a leader in operations and customer service for the branch. Sam, along with Linda Masten, founded Central Carolina Shipping Inc. in 1983 as an independent Customs Brokerage firm where he served as Vice President for 26 years. Sam and Linda grew Central Carolina into a successful and highly respected member of the Carolinas trade community. When Charlotte opened their local chapter of the IFFCBA Sam was part of the organizing group and he headed the Customs committee for several years. Sam obtained his Customs Brokers License in 1984 and remained with Central Carolina until the company was acquired by CVI in 2009.

At CVI, Sam has held several positions in both the operations and sales departments. As an expert in U.S. Customs regulations, Sam is often called upon on to provide guidance to importers on Customs compliance issues. He makes regular presentations on matters related to importation and broader regulatory compliance.

– Sam McClure, LCB, Director of Compliance & Customs Services, CVI
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