What is the UFLPA?
Originally enacted in December 2021 and entered into force the following June, the Uyghur Forced Labor Prevention Act (UFLPA) is a regulation that prohibits U.S. companies from importing any goods that were mined, manufactured, or produced using state-sponsored forced labor in the Xinjiang-Uyghur Autonomous Region (XUAR) of China. The UFLPA expands on Section 307 of the Tariff Act of 1930 — which prohibits the import of goods made in a foreign country by forced labor, convict labor, or indentured labor — by establishing a rebuttable presumption that all goods manufactured in whole or part in the XUAR were made using forced labor.
The law aims for both punishment and deterrence. In enacting the UFLPA, the U.S. government wants to hold the Chinese Communist Party (CCP) accountable for its sweeping campaign of coercion, oppression, and imprisonment of Uyghurs and other ethnic and religious minorities by cutting off complicit Chinese businesses from U.S. customers and restricting their access to the multi-trillion-dollar American market. At the same time, the import controls seek to aggressively dissuade U.S. manufacturers and importers from working with these companies and maintaining supply chains that are connected to the XUAR, where China's forced-labor programs are most heavily focused.
The law's implementation and overall strategy is overseen by the Forced Labor Enforcement Task Force (FLETF), an interagency group housed in the Department of Homeland Security. Other FLETF member agencies include the Department of Labor, the Department of State, the Department of Justice, the Department of Commerce, the Treasury Department, and the Office of the United States Trade Representative. Customs and Border Protection (CBP) is responsible for UFLPA enforcement, with the agency's teams, officials, and agents on the ground flagging shipments and executing detainments.
FLETF and the Department of Homeland Security maintain a UFLPA Entity List comprised of organizations known to be participating in the CCP's various forced-labor programs. U.S. businesses and manufacturers are strictly prohibited from importing goods from any businesses on this list. The Entity List has been updated several times since it was initially published in June 2022, and now consists of over 80 entities based in China.
Which Industries Are Targeted by the UFLPA?
When the UFLPA entered into force in 2022, FLETF designated three industries as "high-priority sectors": polysilicon, cotton, and tomatoes. According to Sheffield Hallam University's Helena Kennedy Centre for International Justice, at the time, 45% of the world's photovoltaic-grade polysilicon was manufactured in Xinjiang. The XUAR also produced 20% of the world's cotton and a quarter of the global output of tomato paste. The region's outsized roles in these sectors made them clear targets for FLETF as the interagency group rolled out the UFLPA and directed CBP's enforcement strategy.
In addition to the size of these industries, the federal government drew on existing research by the Department of Labor. When the UFLPA became effective in 2022, the agency's List of Goods Produced by Child Labor or Forced Labor included 18 products from China. Of those, 10 had links to forced labor practices in Xinjiang or among Uyghurs transferred elsewhere. Nearly all goods implicated in these forced labor programs — including cotton, yarn, textiles, gloves, polysilicon, and tomato products — were in high-priority sectors.
FLETF has worked closely with the NGO community to identify where "labor schemes and human rights violations and abuses" occur and adjust priority sectors accordingly. As the 2023 report outlines, new potential risk areas include vinyl, aluminum, steel, lithium-ion batteries, copper, electronics, and tires.
For U.S. manufacturers and importers, the upshot of this flux is the need to remain proactive and vigilant in understanding both the UFLPA's shifting purview and their own supply chains. Companies must also recognize that CBP's high-priority designations may not always align with enforcement on the ground, as the agency incorporates new evidence and rapidly adapts at U.S. ports of entry.
Spotlight on the Automotive Industry
In December 2022, Sheffield Hallam University's Helena Kennedy Centre for International Justice published a comprehensive expose drawing on research, reporting, and publicly available data to demonstrate how the global automotive supply chain was deeply entrenched in the CCP's forced labor practices in Xinjiang. The report implicated myriad of the largest and most successful automakers in the world, including Volkswagen, Honda, Ford, General Motors, and Toyota.
The DHS and FLETF responded to what became known as the "Sheffield Report" in two subtle but significant ways. First, in November 2023 the agency brought Laura Murphy, the report's chief author, on as its chief policy advisor for forced labor. Then, in February 2024, CBP impounded thousands of vehicles being imported by Volkswagen — including around 1,000 Porsches and several thousand Audis — under the UFLPA.
For their part, auto manufacturers have been largely reticent about their capacity to root out forced labor within their supplier networks. Myriad car companies have stated that comprehensively mapping their supply chains — including identifying potential sub-tier suppliers operating in Xinjiang — is "out of reach." A second major obstacle raised by Human Rights Watch was the specter of government retaliation. Experts said that car companies operating in China often declined to engage in discussions with their Chinese suppliers and joint ventures about forced labor issues because they feared the government would punish them. The CCP has a track record of carrying out criminal investigations into parties aiding companies in assessing their exposure to human rights abuses in the country.
UFLPA Enforcement Trends and Statistics
CBP maintains data on UFLPA enforcement, and glancing over these statistics yields a few key trends. In the nearly three years since the law entered into force, CBP has largely followed through on the high-priority designations. Electronics — which, according to UFLPA's data dictionary, includes integrated circuits, automated data processing equipment, solar products, and consumer electronics — accounted for over 5,100 detainments.
In 2023, UFLPA detentions by sector broke down as follows: Electronics (1,460), Industrial and Manufacturing Materials (899), Apparel, Footwear and Textiles (785), Agriculture and Prepared Products (290), Consumer Products and Mass Merchandising (199), Machinery (161), Pharmaceuticals, Health and Chemicals (123), Automotive and Aerospace (51).
In 2024, the breakdown shifted significantly: Electronics (2,623), Apparel, Footwear and Textiles (876), Industrial and Manufacturing Materials (310), Agriculture and Prepared Products (229), Automotive and Aerospace (197), Consumer Products and Mass Merchandising (109), Pharmaceuticals, Health and Chemicals (95), Machinery (39).
In 2024, electronics comprised over 87% of the total value of the agency's detainments. While the lion's share of UFLPA enforcement in 2023 was divided between industrial and manufacturing materials, cotton products, and electronics, 2024 seems to be revealing a critical pivot in the DHS's strategy. The U.S. government now seems determined to marshal a substantial proportion of resources and personnel to target global electronics manufacturers and their links to Xinjiang. It's also notable that Automotive and Aerospace imports, while still small, have jumped from last place to fifth in terms of detentions.
The UFLPA Detainment Process
Under the direction of DHS and FLETF, CBP actively screens imports throughout the U.S.'s 300+ ports of entry. If the agency suspects that a particular shipment is in violation of the UFLPA — either because it has a connection to one of the organizations on the UFLPA Entity List or is linked to other forced labor practices in China — it has the authority to carry out a detainment. Once CBP executes a detainment, the importer has 30 days to issue a response.
During this critical time period, importers generally have two options. One, they can make a request to the port director to have the detained shipment re-exported to another country. As the DHS explains on its website, importers can seek this permission "at any point during the detention process so long as the goods are not subject to seizure." Two, importers may request an applicability review. If an applicability review is requested, the importer has 30 days to put together a UFLPA response package. These response packages can seek a release of the shipment via one of two pathways: either by requesting an exception to the law's rebuttable presumption, or by making what's called an "out-of-scope argument."
If an importer requests an applicability review and submits their response package within the 30-day timeframe, CBP then carries out its own assessment of the documentation. While CBP has said that review times vary based on the "complexity of the supply chain and other factors," the average review period is somewhere between two to three weeks. Once CBP has conducted the applicability review, the agency can either release the shipment or exclude it from entry into the U.S. if the package failed to provide the necessary proof. Following an exclusion, importers may file an official protest, and if denied, file suit at the U.S. Court of International Trade (CIT).
CBP Release Criteria and Winning a UFLPA Challenge
When CBP detains a shipment under the UFLPA, importers may opt to challenge the detainment. There are generally two pathways U.S. companies can take when issuing a challenge and putting together a UFLPA response package.
The first pathway is to request an exception to the law's rebuttable presumption that any goods mined, manufactured, or produced in whole or part in Xinjiang or by a company on the UFLPA Entity List was made using forced labor. In order to successfully rebut this presumption, importers need to provide comprehensive documentation demonstrating that, though their shipment may be connected to Xinjiang or a company on the Entity List, it was nevertheless made completely free of forced labor.
CBP has established an extremely high bar for winning an exception to the rebuttable presumption. The agency has suggested that few if any of the total shipments released thus far were done so via the exception route. For importers seeking to issue a response based on the exception argument, CBP requires companies to submit information in four primary categories:
- 1 Supply Chain Traceability
Importers must present documentation tracing the entire supply chain of the shipment under detainment, including complete descriptions of all suppliers and manufacturers (including sub-tiers), affidavits from all supply chain stakeholders, transaction records such as purchase orders, invoices, payments, and certificates of origin, and manufacturer records including production orders and documentation on production capacities.
- 2 Due Diligence System
Companies must demonstrate due diligence measures including engaging with direct suppliers and key stakeholders, carrying out risk assessments through supply chain mapping, creating a supplier code of conduct that prohibits forced labor, communicating that code of conduct across the supply chain, monitoring compliance through audits, and performing remediation through corrective action plans.
- 3 Clear and Convincing Evidence Goods Were Not Made Using Forced Labor
This is arguably the most difficult bar to clear. Required documentation includes worker documentation with proof of wage payments, records demonstrating voluntary employment, labor audits, and documentation of workers' residency status.
- 4 Supply Chain Management Measures
Importers must produce documentation of actions taken to mitigate forced labor risks, including vetting stakeholders, incorporating specific consequences into supplier contracts if forced labor is discovered, ensuring access to supplier materials and workers for verification, and documentation showing internal controls including audited financial statements.
What Importers Can Do After a Seizure
In certain cases, CBP may choose to seize an importer's shipment at a port of entry. U.S. Code stipulates that CBP is required to carry out seizure — and ultimately forfeiture — on certain categories of merchandise, including stolen or smuggled goods, controlled substances, specific types of contraband, and plastic explosives. CBP may also seize any merchandise that was used to facilitate the importation of illegal shipments.
When CBP decides to seize an import in violation of the UFLPA, the shipment will be referred to the port's Fines, Penalties, and Forfeitures officer (FPFO), who then issues a Notice of Seizure letter to the importer. Such notices provide guidance on how importers can respond to the seizure, including by submitting a petition.
In general, importers may initiate one of several different responses if their shipment is seized under the UFLPA: file a petition, which will be reviewed by the FPFO or other CBP personnel; request that CBP expedite the seizure and forfeiture proceedings; make an offer in compromise, in writing, and including payment in settlement of the claim in accordance with 19 U.S.C. 1617; or file a claim to initiate a referral to the U.S. Attorney for judicial forfeiture.
While CBP can seize shipments, there is little evidence the agency is seizing imports on a significant scale. Manufacturers and importers should know their avenues of recourse should a UFLPA seizure occur, but understanding how to assemble a comprehensive response package and secure a release should be a higher priority.
Compliance Strategies for Manufacturers
While importers may wrest back shipments from CBP by assembling an applicability package and winning a UFLPA challenge, there is a more prudent, advantageous way to protect goods from the expanding forced-labor dragnet. U.S. companies serious about safeguarding shipments and maintaining clean, above-board supply chains free of forced labor can implement various UFLPA compliance strategies. These measures help businesses understand their risk exposure to forced labor and mitigate it while forming the foundation for a broader trade compliance strategy.
Due diligence is the bedrock of any robust risk management process. Companies committed to staying in UFLPA compliance and maintaining ethical sourcing practices should have sound internal infrastructure for conducting it. A robust due diligence system includes direct engagement with all stakeholders along the supply chain, drafting and communicating a strict code of conduct that forbids forced labor, and codifying a corrective action plan in the event that a supply chain stakeholder is found to be participating in forced-labor practices.
Importers should carry out a comprehensive audit of their business. Conducting an audit helps U.S. companies understand whether any of their products or manufacturing inputs are connected to Xinjiang or firms on the UFLPA Entity List. To do this, importers should use CBP's Automated Commercial Environment (ACE) to search their import data for items with Harmonized Tariff Schedule (HTS) codes linked to products or components CBP designates as high-priority.
Dual sourcing, or multisourcing, is an invaluable practice for commodity managers and strategic sourcing professionals. Locating and securing relationships with alternative suppliers confers flexibility, resilience, and operational agility — crucial characteristics during logistical crises. Robust dual sourcing throughout the supply chain can fortify companies against bottlenecks, pare down the costs of supply chain disruptions, and streamline the process of adopting new compliance regulations.
U.S. manufacturers should look to revise their contracts to include as much flexibility as possible in the event that a supplier is out of UFLPA compliance. Implementing termination for cause if suppliers are found to be using forced labor gives importers the ability to cut ties with tainted manufacturers and seek out alternative sourcing without incurring exorbitant costs. Additionally, importers may want to update their contracts with customers to minimize penalties for delays if they discover that their suppliers are out of UFLPA compliance.
How to Find Sanctioned Entities in Your Supply Chain
U.S. sanctions are continuously expanding. The ever-evolving nature of these foreign-policy instruments presents a challenging obstacle for manufacturers and other U.S. companies that do business with international suppliers.
Identifying Sanctioned Suppliers with Z2: Visibility is critical when it comes to navigating risks to your supply chain, especially when it comes to uncovering potential ties to sanctioned entities. At Z2, we provide the tools and insights needed to identify and map your sub-tier suppliers, giving you a clearer view of your connections in this intricate web. Our database uses AI to analyze data on over one billion parts, 150,000 suppliers, and 50,000 manufacturing locations to uncover supplier relationships and associated risks that could impact your business.
Sanctions Forecasting — Find Risky Suppliers Before They Become Sanctioned: Drawing on existing sanctions information and high-level research and data analysis, this strategic approach can determine international entities at heightened risk of being designated for these onerous trade restrictions. Sanctions Forecasting utilizes a variety of resources to accurately predict which individuals, organizations, or properties may be added to sanctions lists, including current SDNs and other targeted entities on U.S. sanctions lists, government investigations and congressional reports, and academic and NGO reporting with established influence on federal policymaking.
Z2's Sanctions Watchlist helps you anticipate which manufacturers and businesses are at risk of being sanctioned globally. It does this by tracking 28 different lists across 16 different countries, including the U.S., Canada, France, Japan, China, the United Kingdom, and more. By integrating these predictions with your specific BOM data, the tool provides a tailored view of how potential sanctions could directly impact your suppliers and your business.
