Corruption News

Expanding UFLPA Enforcement: Strengthening Supply Chains Against Forced Labor Risks


(Sponsored) A U.S. House committee has urged a more aggressive stance on goods imported from a restricted region in China amid human rights concerns. Assent’s Jamie Wallisch shares insights for companies struggling to manage the supply chain risks.

The passage of the Uyghur Forced Labor Prevention Act (UFLPA) in 2021 represented a pivotal shift in the way the U.S. approached forced labor legislation. Now, calls for greater enforcement of the UFLPA have intensified, with congressional leaders advocating for heightened scrutiny of goods imported from the Xinjiang Uyghur Autonomous Region (XUAR) amid serious human rights concerns.

Congress urges stronger action on UFLPA enforcement

Leaders of the House Select Committee on the Chinese Communist Party made a strong appeal to the Homeland Security secretary and attorney general, urging a more aggressive stance on goods from the XUAR that are imported into the U.S. This bipartisan political momentum suggests that companies can expect more disruption as a result of the UFLPA — a law that has already resulted in over $2 billion in detained shipments.

Enforcement expectations: fewer loopholes, more liability

The committee called out four specific areas of improvement related to enforcement:

  1. Closure of a loophole related to the de minimis provision, which has allowed low-value items to enter the U.S. with minimal oversight.
  2. Expansion of criminal prosecution of those who benefit from the import of goods associated with the XUAR. This marks an escalation in enforcement, moving away from customs interventions in favor of direct legal action.
  3. Broadening the list of high-risk companies as well as the specific goods to receive greater scrutiny to include products like gold, seafood and critical minerals.
  4. Stopping transshipments, which occurs when companies route goods through third countries to avoid border stoppages.

The implications for companies importing into the U.S.

As officials ramp up enforcement, companies need to prepare for increased risk of disruption. It is likely that loopholes will close, penalties will intensify and enforcement authorities will get the resources they need to dig further into high-risk verticals to identify products with links to the XUAR. That could even include digital tools that enhance their visibility into the origin of products and parts.

For companies that are unprepared, the results of these developments are predictable: product seizures and loss of market access. These types of disruptions present serious risks to business operations. Beyond the obvious and immediate legal and financial costs, companies also face brand damage that is both serious and hard to quantify, with long-lasting effects on customer trust.

A call for proactive compliance

Rising enforcement has made it clear that UFLPA compliance is going to require a significant, ongoing effort for in-scope businesses — one that requires continuous engagement and a deep understanding of their supply chains. By implementing processes outlined by U.S. Customs and Border Protection, including stakeholder engagement, risk assessments and the development of a supplier code of conduct, companies can confidently meet UFLPA requirements and ensure their products are sourced ethically.

Ultimately, demand for greater due diligence regarding forced labor is a reminder that companies that proactively manage their supply chains not only avoid disruption, but position themselves as leaders in supply chain sustainability management, securing trust with customers, investors and stakeholders.

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