What is the Uyghur Forced Labor Prevention Act (UFLPA)?

When it comes to the UFLPA, you won’t find pages and pages of legal jargon. The act is a mere 54 words long, but has the potential to disrupt a vast amount of global trade. The affected imports are not limited to shipments directly from China; any product made either partially in or with materials from Xinjiang is banned from entering the U.S. The value of finished goods with a link to the Xinjiang region has been estimated at a massive $64 billion.

The UFLPA is unique because it’s all encompassing. Any product, no matter the kind, is subject to the law. In the past, these kinds of forced labor trade laws were generally focused around a category of product, such as cotton. The UFLPA on the other hand is likely to disrupt a number of industries, particularly textiles, tomatoes, and polysilicon used in solar panels.

>> Learn the 5 ways the UFLPA is making trade history <<

Difficult as it has been for U.S. authorities to pinpoint sources of forced labor in Xinjiang, CBP has released a list of sanctioned entities known to have committed human rights violations. These names are a helpful step toward enabling compliance, but importers will have to go further if they are to provide the documentation necessary to rebut the assumption of forced labor in their supply chains.

Yes. Because the UFLPA applies not just to goods made in Xinjiang and by named entities, but also to goods with inputs from Xinjiang, all supply chains should be audited for risk exposure.

Illegal transshipment is one method by which inputs made with forced labor may enter the U.S. undetected. According to UFLPA statistics released by CBP, $1,043 million worth of shipments from Malaysia were subjected to UFLPA enforcement actions since the implementation of UFLPA, more than four times that of shipments from China. While not all of these shipments were denied entry into the United States, they were at least examined for suspected ties to Xinjiang.

The Xinjiang Production and Construction Corps (XPCC) made heavy use of transshipment evasion when it was designated by the U.S. government in 2020. A 2021 study published by the Center for Advanced Defense Studies (C4ADS) found that, since 2019, XPCC majority-owned companies “have exported 4,559 shipments to their top trade partners, who then re-exported these goods to the United States and other countries.”

All U.S. importers are therefore strongly advised to trace and document their supply chain inputs, regardless of where in the world they are sourced.

This law has shifted the burden of proof to the importer. Any product that has contact with the Xinjiang region is presumed to be manufactured through forced labor and therefore banned. If an importer believes their product from Xinjiang was not made with forced labor, they will need to provide thorough, third-party vetted documentation that proves otherwise.

If a customs investigation is able to find that any one person involved with the shipment had knowledge of the use of forced labor, they would be charged with the criminal statute of forced labor.

>> Learn how to identify Xinjiang forced labor in global supply chains in our masterclass <<

Importers should look to mitigate the risk of Xinjiang forced labor in their supply chains by conducting thorough audits. Sayari Graph utilizes open-source records and graph technology to map out connections and establish links between illicit actors, their infrastructure, and related business structures and transactions. This technology can be used to look for indicators of forced labor in Chinese public records, scan for known high-risk companies, and screen beneficial owners to ensure a supply chain is unexposed.

>> See how Sayari can be used to investigate global supply chains for forced labor <<