In an uncharacteristic act of bipartisanship by Congress, the Uyghur Forced Labor Prevention Act sailed through the House and Senate and landed on the President’s desk for his signature. Biden signed it on December 23rd, triggering a 180 day clock until it becomes law and goods will be prohibited entry on June 21, 2022.
This administration has placed a focus on worker’s rights, but it and previous administrations have been focused on China’s treatment of Uyghers in the westernmost province of the country and alleged human rights abuses bordering on genocide.
With the passage of this law, the U.S. has set itself on a course that will bar virtually all importations from the Xinjiang Uyghur Autonomous Region, or XUAR. The devil, as is usually the case, is in the details, but the legislation requires the following:
- A Forced Labor Task Force is charged with collecting public comments and testimony on how to best prevent the importation of goods “mined, produced or manufactured” using forced labor.
- The Task Force, along with State, Commerce, DHS and the Director of National Intelligence (DNI) will develop rules as to how the law will be enforced.
- From the law firm GDLSK: “Effective 180 days after the date of the enactment, the bill creates a presumption that any goods produced, wholly or in part, in XUAR or by an entity on the lists described above would be inadmissible under the forced labor statute. An exception applies where the CBP Commissioner determines: a) that the importer has fully complied with the contemplated guidance to be established and has completely responded to all CBP inquiries; and, b) by clear and convincing evidence, that the goods were not produced, or manufactured, wholly or in part, by forced labor. CBP is to report to Congress the circumstances of any such exceptions.
This law will have far-reaching implications for supply chains both exclusively operating within China and that may utilize further manufacturing in other countries. Importers will need to reach deep into their supply chains to identify what components, if any, are sourced from here and whether or not they can or cannot meet the test that will be put forth by the government to prove eligibility for an exception.
We are in the earliest stages of digesting the law and monitoring for what response, if any, China will take against U.S. exports for its passage. For importers seeking next steps or help, RIM’s customs and regulatory compliance group stands ready to provide technical assistance and, if necessary, can refer our clients to specialized outside counsel to seek exclusions when the process is fully detailed.