US Department of Homeland Security seeks comments on implementation of Uyghur Forced Labor Prevention Act

On January 24, 2022, the Department of Homeland Security, on behalf of the Forced Labor Enforcement Task Force released a notice inviting public comments on the implementation of the Uyghur Forced Labor Protection Act, which was signed into law on December 23, 2021 (the Task Force Notice).[1]

The Task Force Notice can be found here.  Interested parties have the opportunity to submit, by March 10, 2022, written comments on the implementation of the Act.  Such public comments are a key avenue for interested parties to provide feedback on the Act’s implementation in light of the commercial realities of their supply chains.

Background

The Act, which is designed to “ensure that goods made with forced labor in the Xinjiang Uyghur Autonomous Region [(XUAR)] of the People’s Republic of China do not enter the United States market, and for other purposes,” will take effect on June 21, 2022. 

Set forth below, please find the points of the Act that are relevant to the Task Force Notice.

The rebuttable presumption.  The Act dictates US Customs and Border Protection (CBP) to apply a rebuttable presumption that goods mined, produced or manufactured, wholly or partly, in XUAR, or produced by certain entities to be specified by the US government, are prohibited from importation into the United States under 19 U.S.C. § 1307, on the ground that they involve the use of forced labor.

US importers may rebut the presumption by (1) fully complying with the government’s guidance and regulations on the matter; (2) “completely and substantively” responding to all inquiries from CBP; and (2) demonstrating “by clear and convincing evidence” that the goods did not benefit from forced labor.  The Act shifts the burden of proof from the US government to importers, who must demonstrate, with a very high and demanding evidentiary standard, that forced labor is not used in their supply chains.

If CBP finds that an importer satisfies all the above-mentioned requirements, the Act mandates the agency to submit a report to Congress and make it publicly available within 30 days after such finding.  Note that the Act characterizes such a determination as an exception.  Further, CBP is authorized, but not required, to issue new and amended regulations to support the implementation of these provisions of the Act.

The enforcement strategy.  In order to prevent the importation of goods benefiting from forced labor in China into the United States, the Task Force, in consultation with the Secretary of Commerce and the Director of National Intelligence, must “develop a strategy for supporting enforcement of Section 307 of the Tariff Act of 1930.”  The Task Force must submit the enforcement strategy report to Congress on the same day the Act becomes effective, ie, June 21, 2022. 

The Task Force Notice

The Task Force Notice sets forth the process for public comments, which “will be vital to robust implementation” of the Act.[2]  Interested parties will have until March 10, 2022 to present their views and feedback on the Act’s enforcement strategy.

To assist the public in developing comments, the Task Force Notice presents a list of non-exhaustive questions regarding methods for detecting parties and entities involved in the use of forced labor in supply chains, as well as questions regarding how to prevent the use of forced labor along with ways to improve coordination with the private sector entities to implement and update the enforcement strategy and combat forced labor.  In addition, the Task Force has requested any other additional information on how best to implement the Act.

As to specific questions that may be useful to US importers seeking to develop comments regarding how to address the Act’s rebuttable presumption of the use of forced labor, the Task Force Notice includes the following questions in its non-exhaustive list:

• What efforts, initiatives, and tools and technologies should be adopted to ensure that [CBP] can accurately identify and trace goods entered at any US ports in violation of section 307 of the Tariff Act of 1930, as amended?
• What due diligence, effective supply chain tracing, and supply chain management measures can importers leverage to ensure that they do not import any goods mined, produced, or manufactured wholly or in part with forced labor from [China], especially from [XUAR]?
• What type, nature, and extent of evidence can companies provide to reasonably demonstrate that goods originating in [China] were not mined, produced, or manufactured wholly or in part with forced labor in [XUAR]?
• What tools could provide greater clarity to companies on how to ensure upcoming importations from [China] were not mined, produced, or manufactured wholly or in part with forced labor in [XUAR]?
• To what extent is there a need for a common set of supply chain traceability and verification standards, through a widely endorsed protocol, and what current government or private sector infrastructure exists to support such a protocol?
• What type, nature, and extent of evidence can demonstrate that goods originating in [China], including goods detained or seized pursuant to section 307 of the Tariff Act of 1930, as amended, were not mined, produced, or manufactured wholly or in part with forced labor?
• What measures can be taken to trace the origin of goods, offer greater supply chain transparency, and identify third-country supply chain routes for goods mined, produced, or manufactured wholly or in part with forced labor in [China]?[3]

If your supply chain involves China

US importers and entities with supply chains that may involve China should consider submitting comments to help inform the Act’s implementation in a manner consistent with their commercial realities and business practices.  As noted, all parties, including importers, can file written comments up to the deadline of March 10, 2022.

DLA Piper attorneys have extensive experience in assisting clients in navigating supply chain considerations and can assist you with preparing and submitting comments, both in the public version and confidential version, in accordance with the instructions set forth in the Task Force Notice.  If you have any questions or would like to discuss your company’s situation, please contact any of the authors or your regular DLA Piper contacts.