Washington, D.C. – Just before Congress turned out the lights on 2021 legislative action, it passed the Uyghur Forced Labor Prevention Act and President Biden signed the bill into law (PL 117-78) on December 23, 2021. The new law bans imports of products manufactured in China’s Xinjiang Uyghur Autonomous Region (XUAR) beginning June 21, 2022 and imposes sanctions on those responsible for human rights violations in the region.
Senators Marco Rubio (R-FL) and Jeff Merkley (D-OR) led the Congressional effort and the Senate passed the legislation in July, the House followed suit on Dec 8th. The Senators goal is to ensure goods made with slave labor of Uyghurs and other oppressed Muslim minority groups in XUAR and elsewhere in China do not enter the United States.
Goods manufactured in the XUAR will be assumed to be products of forced labor and banned unless U.S. Customs and Border Protection (CBP) determines the product was not made using forced labor, convict labor or indentured labor under penal sanctions. Products not made in the region which contain materials or components made in XUAR are also subject to the ban. CBP will report determinations of forced labor to Congress and the public.
To avoid the Forced Labor ban, importers must prove products made in the region, or including components from the region had no forced labor in the production of the materials used. The importer must be compliant with relevant CBP guidance and completely and substantively responded to all CBP inquiries on manufacture of product. If CBP finds overwhelming evidence the goods were not made with forced labor, they will be allowed to enter U.S. stream of commerce.
The newly created Forced Labor Enforcement Task Force will create lists of entities in XUAR producing goods with forced labor, any entities involved in providing forced laborers to manufacturing facilities, goods produced in forced labor facilities and entities exporting forced labor products to U.S. The Task Force shall also provide guidance to importers on supply chain tracing and management measures to ensure products from China are not made with forced labor.
The President will provide Congress with periodic reports that identify foreign entities and individuals knowingly facilitating forced labor and any efforts to contravene U.S. laws regarding the importation of goods produced with forced labor. Securities issuers required to file reports with the SEC shall disclose any instances where issuer knowingly engaged in certain activities related to forced labor such as building detention facilities or surveillance systems in them.
SFIA will host a webinar on the new law governing product imports from XUAR on February 3rd at 2 p.m. EST to help the industry understand the new law and compliance by June 21, 2021.