On December 23rd, President Biden signed into law the Uyghur Forced Labor Prevention Act. With his signature, 180 days later importers are prohibited from bringing in goods which originated from the Chinese province of Xinjiang. This means companies have until June 21, 2022 to eliminate originating goods from their supply chains.
It is important to note at this point that this bipartisan legislation unanimously passed in the House of Representatives and Senate. This legislation covers all products of the Xinjiang Uyghur Autonomous Region, or XUAR, and is meant to prevent human trafficking and forced labor within the province.
Much of the details of enforcement will be sussed out in the coming weeks. The legislation directs the following:
“Not later than 30 days after the date of the enactment of this Act, the Forced Labor Enforcement Task Force, established under section 741 of the United States-Mexico-Canada Agreement Implementation Act (19 U.S.C. 4681), shall publish in the Federal Register a 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 Xinjiang Uyghur Autonomous Region, are not imported into the United States.”
The comment period for this will be 45 days from the date of publishing in the Federal Register. The Task Force will also hold public hearings to solicit testimony.
The enforcement and resolution path will involve multiple agencies of government including Commerce, State, DHS (Customs and Border Protection) and the Director of National Intelligence (DNI). The legislation does provide a means for companies to submit evidence that goods were not mined, produced or manufactured with forced labor and should be exempted. Those determinations will be published in no more than thirty days.
For Alba’s importers, the key parts of this new law are this:
- We realize that it is increasingly difficult to conduct sourcing audits within the XUAR. The legislation, though, operates from the presumption of guilt, barring substantial evidence to the contrary. Alba can offer consultative resources to assist in meeting the burden of proof of the legislation and policy determinations reached by the Task Force.
- The exemption reaches to goods manufactured in another country, using products mined, produced or manufactured in XUAR. This would be an appropriate time to immediately approach suppliers manufacturing finished goods in countries other than China to ask about their underlying sourcing of raw materials and components.
- The opportunity to submit comments will be available by late March and Alba plans to participate, working in conjunction with the NCBFAA, Pacific Coast Council and other associations to which we and our clients belong.
Reasonably, we can expect China to respond to this in some fashion. The fact that this is legislation that has been passed in the United States but is being pushed by the Biden Administration with other countries around the globe means that China can expect similar restrictions from other western nations. Importers and exporters will need to remain wary of any changes that impact sourcing and sales with China as a result of this new law.
