The House Select Committee on the Chinese Communist Party recently sent a letter to Department of Homeland Security Secretary Alejandro Mayorkas regarding strengthening enforcement of the Uyghur Forced Labor Prevention Act. The UFLPA establishes a rebuttable presumption that goods produced in whole or in part in the Xinjiang Uyghur Autonomous Region of China, or by specific named entities, involve forced labor and therefore cannot be imported into the United States pursuant to Section 307 of the U.S. Tariff Act. The UFLPA, as well as compliance guidance published by the U.S. government, are discussed in detail in our earlier Alert here.
In this post, we discuss the actions requested by the Committee. If implemented, these actions would impact importers and in many cases their downstream commercial customers. There are four main Committee asks in the letter:
1. Expand the UFLPA Entity List to include companies and entities located outside the XUAR that are affiliated with companies and other entities in the region. The letter specifically calls out the seafood, gold and critical minerals industries.
This request is intended to address labor transfers from the XUAR to other regions in China. The letter explicitly mentions a recent report by the Center for Advanced Defense Studies that notes potential supply chain linkages of U.S. companies to gold mined in the XUAR. The C4ADS report is discussed in our earlier post.
2. DHS should increase its focus on goods shipped through third countries. Suggested measures include:
- Adding companies outside China to the UFLPA Entity List.
- Exponentially increasing testing of goods at U.S. ports of entry for UFLPA violations.
- Expanding the use of isotopic and other testing.
- Increasing Customs and Border Protection’s on-site inspections of production sites in CAFTA-DR and USMCA countries to conduct rule of origin verification investigations.
The Committee believes that trans-shipments of goods are undermining enforcement of the UFLPA. Specific sectors and countries noted in the letter were Malaysia, Vietnam and Thailand for electronics and Vietnam for apparel, footwear and textiles. Yarn and fabric from member countries of the Dominican Republic-Central America-United States (CAFTA-DR) and U.S.-Mexico-Canada Agreement (USMCA) FTAs also were noted, including Nicaragua by name.
3. Shipments under the de minimis threshold continue to be a focus of the Committee, which they have characterized as a major avenue for goods made by forced labor to enter the U.S. market. In its letter, the Committee requested DHS’s written assessment of the potential effect on UFLPA enforcement efforts of altering de minimis eligibility for textiles and apparel and other high-risk items, including determining whether exceptions to de minimis treatment are warranted for certain high-risk items to prevent unlawful importations.
4. Finally, the Committee has requested responses by the beginning of March to 21 questions. Among other things, the Committee asks for information regarding (1) whether 29 specified entities meet the criteria for being placed on the UFLPA Entity List, (2) why enforcement relating to textiles and apparel is not higher, (3) isotopic testing, (4) inter-agency collaboration on UFLPA enforcement and (5) the adequacy of CBP resources, tools, funding and authority.
Separately, on January 30 in a meeting with members of the National Council of Textile Organizations, Secretary Mayorkas indicated that CBP has already begun to increase UFLPA enforcement with respect to textiles.
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