President Joseph Biden signed HR 6256 (now PL 117-78), the bicameral, bipartisan Uyghur Forced Labor Prevention Act on December 23, after both the US Senate and House of Representatives unanimously passed the act. Importers now have 180 days to work with Customs and Border Patrol and the Forced Labor Enforcement Task Force to develop workable standards to permit importers to rebut the new statutory presumption that products from Xinjiang are made from forced labor and should be denied entry into the United States.
The Uyghur Forced Labor Prevention Act (UFLPA) codifies a rebuttable presumption that goods mined, produced, or manufactured in the Xinjiang Uyghur Autonomous Region (XUAR) were made with forced labor, and bars their importation into the United States. The final compromise legislation moved through Congress at breakneck speed and was passed unanimously by both the House and the Senate, capping off years of bipartisan efforts to increase costs on governments and companies that may have utilized forced labor.
What You Need to Know
- The Uyghur Forced Labor Prevention Act establishes a rebuttable presumption that goods mined, produced, or manufactured in China’s XUAR were made with forced labor.
- Goods mined, produced, or manufactured in the XUAR are barred from importation into the United States.
- Those wanting to import goods into the United States have 180 days from the UFLPA’s enactment to ensure that their supply chains are free from exposure to the XUAR.
- The Chinese government has threatened to impose counter sanctions in response to the UFLPA.
What Does the UFLPA Do?
- Section 3 codifies a rebuttable presumption that any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China is prohibited under Section 307 of the Tariff Act of 1930 (19 USC 1307) and, therefore, are not entitled to entry at any ports of the United States.
- Requires the Forced Labor Enforcement Task Force, chaired by the Secretary of Homeland Security, to develop a strategy to support the implementation and enforcement of the UFLPA, including listing:
- (i) Entities in the XUAR that mine, produce, or manufacture wholly or in part any goods, wares, articles and merchandise with forced labor;
- (ii) Entities working with the government of the XUAR to recruit, transport, transfer, harbor, or receive forced labor or Uyghurs, Kazakhs, Kyrgyz, or members of other persecuted groups out of the XUAR;
- (iii) Products mined, produced, or manufactured wholly or in part by entities on the list required by clause (i) or (ii);
- (iv) Entities that exported products described in clause (iii) from the People’s Republic of China into the United States;
- (v) Facilities and entities, including the Xinjiang Production and Construction Corps, that source material from the XUAR or from persons working with the government of the XUAR or the Xinjiang Production and Construction Corps for purposes of the “poverty alleviation” program or the “pairing-assistance” program or any other government labor scheme that uses forced labor;
- (vi) A plan for identifying additional facilities and entities described in clause (v);
- (vii) An enforcement plan for each such entity whose goods, wares articles, or merchandise are exported into the United States, which may include issuing withhold release orders to support enforcement of Section 4 with respect to the entity;
- (viii) High-priority sectors for enforcement, which shall include cotton, tomatoes, and polysilicon; and
- (ix) An enforcement plan for each such high-priority sector.
- Goods produced by an entity appearing on a list produced by the Forced Labor Enforcement Task Force to satisfy sections (i), (ii), (iv), and (v) above will face the same rebuttable presumption that prohibits entry to the United States, regardless of where they are produced.
- Imposes sanctions for forced labor in Xinjiang by amending Section 6(a)(1) of the Uyghur Human Rights Policy Act of 2020 (Public Law 116–145; 22 USC 6901 note) to include “Serious human rights abuses in connection with forced labor.”
What’s Not in the Legislation?
- A previous version of the legislation contained a provision requiring companies to disclose exposure to forced labor to the SEC and shareholders. The provision was not included in the legislation signed into law. Proponents argued that “such involvements represent clear, material risks to the share values and corporate reputations” (Section 9a – HR 1155). While the proponents of the provision were not successful, this could remain an option in future legislation.
What’s Next?
- 30 Days: The Forced Labor Enforcement Task Force must publish a Federal Register notice soliciting public comments on how best to ensure that goods mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China, including by Uyghurs, Kazakhs, Kyrgyz, Tibetans, and members of other persecuted groups in the People’s Republic of China, and especially in the XUAR, are not imported into the United States. The public comment period will last at least 45 days.
- No Later than 45 Days after the Comment Period: the Forced Labor Enforcement Task Force shall conduct a public hearing inviting witnesses to testify with respect to the use of forced labor in the People’s Republic of China and potential measures, including:
- measures that 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 the People’s Republic of China; and
- oother measures for ensuring that goods mined, produced, or manufactured wholly or in part with forced labor do not enter the United States.
- 180 Days: The Forced Labor Enforcement Task Force is required to submit their strategy document, including the criteria for exception under the rebuttable presumption (Section 3) and the listed entities covered by the rebuttable presumption.
- 180 Days: Implementation
- 8 Years: Sunset (unless the president certifies that forced labor is no longer a concern in China).
How We Can Help
Morgan Lewis assists clients with third-party risks, including ensuring responsible labor in their supply chains and navigating the conflict of laws between the United States and China. A cross-disciplinary global team works collaboratively to advise clients regarding compliance with legislation and trade policies and to represent them in contentious governmental agency proceedings, including filing comments with respect to the proposed implementing regulations of the UFLPA.
CONTACTS
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following:
Boston
Carl A. Valenstein
London
Chris Warren-Smith
Miami
Clay M. Carlton
Paris
Xavier Haranger
Pittsburgh
Elizabeth S. Goldberg
Washington, DC
Giovanna M. Cinelli
Sandra Moser
Katelyn M. Hilferty