Uyghur Forced Labor Prevention Act (UFLPA) Region Alert Takes Effect
US President, Joe Biden, signed the Uygur Forced Labor Prevention Act (UFLPA) in 2021. Did you know under this act, goods may be excluded from importation into the US? This is true; however, it depends on the country of origin where the goods were produced or manufactured.
This region alert will be deployed to the Automated Commercial Environment (ACE) on March 18, 2023, which can bring about significant and influential changes for trade users conducting business in the US.
Today we will delve into UFLPA, which has strengthened the prohibition of imported goods produced under forced labor, uncover its purpose, expected changes, documentation requirements, and additional insight into CBP regulations if shipments happen to get inspected.
Purpose Behind UFLPA
According to US Customs and Border Protection (CBP), the Uygur Forced Labor Prevention Act “establishes a rebuttable presumption that the importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China, or produced by certain entities, is prohibited by Section 307 of the Tariff Act of 1930 and that such goods, wares, articles, and merchandise are not entitled to entry to the United States.”
Under this act, CBP can issue a Withhold Release Order (WRO), which prevents imports from entering the US if there is any suspicion of forced labor used to produce or manufacture goods. This means that imports will automatically be detained upon arrival at any US port.
CBP issued the WRO against cotton and tomatoes. The downstream products produced wholly or partly in the Xinjiang Uyghur Autonomous Region and products that incorporated these inputs of cotton and tomatoes.
What Is A CBP Withhold Release Order, And Why Goods May Be Issued One?
Changes For Trade Importers
Under the UFLPA, importers will benefit from an early notification on whether or not goods intended to be imported into the US have been produced in the Xinjiang Uyghur Autonomous Region (XUAR). If goods happen to be made in this region, it could subject those imports to restrictions and barriers.
It is important to note that although CBP focuses on these two specific products, they are not the only items affected by this legislation. All shipments directly coming from China, including textiles and other products, require reporting of the actual manufacturer at the time of direct shipment.
According to CBP, there will be three new validations consisting of the following:
- Postal code will be a required field.
- Users will receive an error message if the postal code provided is not a valid postal code in China.
- When supplied with a XUAR region postal code, users will receive a warning message.
CBP further highlights the applications that will be impacted due to changes. They consist of the following:
- Cargo Release (SE) Application. Only for the Manufacturer (MF) party and only when the country is reported as The People’s Republic of China (CN) in the SE36 and/or SE56 record.
- Manufacturer Identification Code ($I) Application. When creating or updating a Manufacturer Identification Code with a city located in The People’s Republic of China (CN).
It is critical that Importers know their suppliers and work alongside trained professionals like customs brokers to ensure that their supply chain is compliant. Shipments should be produced and manufactured under sustainable practices.
If goods are suspected of being produced or manufactured using forced labor, they will be detained by CBP. Importers will be allowed to either re-export detained shipments or submit information indicating that the goods are not violating regulations and rules for admissible entry.
CBP will request further information from the importers to determine the admissibility of goods. Imports could be detained, released, excluded, or seized by CBP upon arrival at any US port of entry if suspected of the use of forced labor.
Goods being sourced in other countries could provide information in different languages. The importers are responsible for ensuring the information is clear, accurate, detailed, and available in English for submission to CBP. The information provided could help resolve deficiencies and problems identified by CBP.
Tip: A customs broker assisting in collecting and managing records helps mitigate the risks of inaccuracies in the documentation that further delay inspection times.
Request An Exception
CBP states that “Importers who receive a detention notice regarding their shipments may respond to the detention notice within the applicable timeframe, pursuant to 19 CFR Part 151, and generally within 30 days from the date the merchandise is presented for examination to
CBP, to request an exception to the UFLPA rebuttable presumption.”
Additionally, importers receiving exclusion and seizure notices may request an exception to the UFLPA rebuttable presumption. Supporting documentation should provide information that could trace the supply chain from the origin of goods to the production and importation of goods entering the US. CBP provided the following tips for compiling documentation:
- Provide sufficient documentation to show the entire supply chain from the origin of the cotton through the final production of the finished product.
- Provide a list of suppliers with the associated production process, including names, addresses, a flow chart, and maps of the region where the production processes occurred.
- Number each step along the production process and the additional supporting documents associated with each step of the process.
- Provide supply chain traceability documents pointing to the origin of the tomato seeds, tomatoes, or products.
- Provide an affidavit from the tomato processing facility that identifies both the parent company and the estate that sourced the tomato seeds and or tomatoes.
- Provide a purchase order, invoice, and proof of payment for the tomato seeds, tomatoes, or products from the processing facility and the estate that sourced the raw materials.
- All production records for the tomato seeds, tomatoes, and/or tomato products that identify all steps, from seed to finished product, from the farm to shipping to the United States.
Best Practices For Importers
CBP encourages importers and businesses to be more responsible and proactive in monitoring their relationships with suppliers and labor conditions within their supply chain. The following practices should be considered when importing goods into the US:
Ensure Accurate Documentation
Accurate documentation can help speed along the process as CBP can easily understand and quickly determine the origin and admissibility of import. Maintaining and keeping detailed records of parties in your supply chain could help save time if your goods are subject to detention under the UFLPA.
Keeping records will help you save time if CBP inspects your goods. It will also help identify any illicit activity, prohibited labor practices, and efficiencies within your supply chain. These problems could drain revenue or set your business up for monetary penalties.
Keeping up to date with the regulations and laws governing your import entry is essential in reducing vulnerabilities and risks associated with unsustainable practices. It is ultimately the Importer of Records (IOR) responsibility to ensure compliance, as they are liable for any inaccuracies and non-compliant activities associated with the shipment.
Trade professionals, including trade advisors and customs brokers, could help you gain a competitive advantage through knowledge and leverage that knowledge into trade data that could help determine threats, gaps, and weak links within your supply chain. Deficiencies within your supply chain can be identified much faster with the help of trade professionals who will also provide additional support in solving and fixing problems.
Global trade is constantly changing. However, one thing that can stay the same is your compliance; we have the tools to help you achieve that. Get in touch with one of our specialists today, and improve the transparency and efficiency of your supply chain.