CBP Provides Operational Guidance for Importers for UFLPA Enforcement
On June 21, 2022, the Uyghur Forced Labor Prevention Act (“UFLPA” or “Act”) went into effect. In anticipation of this, US Customs & Border Protection (“CBP”) released its operational guidance for importers on June 13, 2022. CBP also hosted a series of webinars, the questions and answers portion of which shed additional light on CBP’s enforcement strategy. CBP cautioned that this guidance is only one part of the strategy, and the trade community should review the entire Forced Labor Enforcement Task Force (“FLETF”) strategy once available.
Background
On December 23, 2021, President Biden signed into law the UFLPA. The Act, which received widespread bipartisan support in Congress, requires the US government to develop a new enforcement strategy to strengthen the prohibition on the importation into the US of articles mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region (XUAR) of China, or by certain entities considered to raise related concerns. The Act creates a presumption that all such articles are products of forced labor, which can only be rebutted by clear and convincing evidence.
CBP Guidance
Identification of Shipments Subject to UFLPA Presumption: CBP’s guidance states that the agency will identify shipments subject to the UFLPA’s rebuttal presumption through a variety of sources, including the UFLPA Entity List, which will be published in the Federal Register. Meanwhile, the UFLPA Entity List will not be exhaustive and CBP will also conduct independent assessments and can take enforcement actions against entities beyond the list if they suspect a shipment contains goods made wholly or in part in Xinjiang. It is understood that CBP’s identification process will not be governed by the “clear and convincing” standard.
Shortened Timeframe for Response: For merchandise subject to the UFLPA rebuttable presumption, CBP will use its authority to detain the merchandise under 19 U.S.C. § 1499, which provides importers only 30 days to demonstrate by “clear and convincing evidence” that detained merchandise is not produced in whole or in part with products from XUAR. By comparison, under existing law governing withhold release orders (“WRO”), importers have 90 days to rebut CBP’s “reasonable suspicion” that imported merchandise is within the scope of a WRO. Importers may request an extension to the 30-day deadline if they need more time to finalize the information required. However, absent an extension and/or ability to convince CBP otherwise, importers will have to re-export the merchandise assuming it is not subject to other CBP actions (e.g., seizure).
Enforcement Action Outside the Scope of the UFLPA: CBP guidance explains that if CBP takes an enforcement action under the UFLPA on an importation, but an importer believes that the importation is outside the scope of the Act, the importer may provide information to CBP to that effect (for example, information that the imported goods and their inputs are sourced completely outside Xinjiang and have no connection to entities on the UFLPA Entity List). The importer must provide documentation to substantiate the absence of subject inputs. If CBP determines the importer demonstrated the merchandise is outside the scope of the UFLPA because it lacks a connection to Xinjiang or an entity on the UFLPA Entity List, the importer does not need to obtain an exception to have its importation released under the important assumption that the importation is otherwise in compliance with US law, e.g., the shipment does not otherwise involve the use of forced labor.
Exceptions (rebutting the presumption) under the UFLPA: If an importer chooses to request an exception, their rebuttal must contain clear and convincing evidence that all stages of the product’s supply chain (i.e., mined, produced, and/or manufactured) are free of forced labor. Only the CBP Commissioner can grant an exception, and any granted exception must be reported to Congress. Specifically, CBP must submit to Congress and the public a report identifying the good and the evidence considered in reaching the determination that an exception is warranted. Thus, information submitted by an importer will be subject to public disclosure and Congressional reporting. The high-level approval required and the need to disclose to Congress will heighten the scrutiny applied to petitions for exceptions.
No De Minimis Exception: CBP confirmed during the webinar that there is no de minimis exception under the UFLPA—if even a single input is from the Xinjiang Region, then the article cannot enter the United States.
Enforcement Begins June 21: According to its webinar, CBP was prepared to begin enforcement on June 21, the day the Act went into effect. This is the same day FLETF will publish its strategy to support enforcement of the prohibition. Note that the application of the UFLPA’s rebuttal presumption is not limited only to shipments from China.
