On July 9, 2024, the Forced Labor Enforcement Task Force (FLETF) issued its annual update to its guidelines enforcing the Uyghur Forced Labor Prevention Act (“UFLPA”) in a Report to Congress titled “2024 Updates to the Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China” (“Updated UFLPA Strategy”). This report is the second strategy update since the UFLPA came into effect in June 2022. Since publication of the first strategy update published on July 26, 2023, FLETF has significantly expanded the UFLPA Entity List and designated three additional high-priority sectors for enforcement: polyvinyl chloride (PVC), aluminum, and seafood.
Between July 26, 2023 and June 12, 2024, 38 new entities were added to the UFLPA Entity List, which now includes 68 entities in total. FLETF additionally updated its method for designating entities to the UFLPA Entity List. Beginning May 17, 2024, FLETF began individually counting each organization, company, or facility identified as sourcing materials from the Xinjiang Uyghur Autonomous Region (“XUAR”) or working with the government for purposes of state-run labor transfer programs. This method includes subsidiaries and affiliates even if they were added at the same time as the parent company, expanding the reach of the UFLPA Entity List. Separately, the FLETF is currently evaluating three formal removal requests submitted to the FLETF Chair.
The initial UFLPA Strategy issued in June 2022 identified four high-priority sectors for enforcement, including apparel, cotton and cotton products, silica-based products (including polysilicon), tomatoes and downstream products. Following review and consideration of submitted recommendations from FLETF member agencies, the Updated UFLPA Strategy identified polyvinyl chloride (PVC), aluminum, and seafood as three additional high-priority sectors for enforcement. Additional detail on these sectors follows below:
Polyvinyl Chloride (PVC): The Updated UFLPA Strategy identifies polyvinyl chloride (PVC) as a high-priority sector, citing the XUAR as a producer of more than 10 percent of the world’s supply of PVC. Further, FLEFT cited “credible reports” indicating that production in the region is expected to expand. The report additionally references evidence of labor transfer programs and state-owned enterprises involved in production of PVC in the region. Entities previously added to the UFLPA Entity List are involved in the production of PVC, including Xinjiang Zhongtai Group, Co., Ltd., Xinjiang Zhongtai Chemical Co., Ltd., and the Xinjiang Production and Construction Corps (XPCC).
Aluminum: The Updated UFLPA Strategy identifies aluminum as a high-priority sector because the XUAR produces an estimated 9-12 percent of the world’s supply of the nonferrous metal. Over 15 percent of China’s aluminum is produced in this region, which the government has committed to further cultivate. Both state-owned and private enterprises operating in the XUAR have been identified as participating in the government’s labor transfer programs. Entities previously added to the UFLPA Entity List are involved in the production of aluminum, including Xinjiang Shenhuo Coal and Electricity Co., Ltd., Xinjiang East Hope Nonferrous Metals Co, Ltd., and the XPCC.
Seafood: The Updated UFLPA Strategy identifies seafood as a high-priority sector due to individuals being transported from the XUAR to seafood processing plants in eastern coastal China. Specifically, FLEFT cited “credible reports” suggesting that Uyghur and other persecuted groups are being transferred from the XUAR to seafood plants in the Shandong Province through state-run labor programs. Entities previously added to the UFLPA Entity List have invested in or are already involved in the seafood industry, including Shandong Meijia Group Co., Ltd. and the XPCC.
The report additionally highlights U.S. Customs and Border Protection’s commitment to strong enforcement and greater collaboration with stakeholders, referencing the agency’s examination of more than 9,000 shipments valued at over $3.4 billion since the implementation of the UFLPA in June 2022. Consistent with previous reports, the Updated UFLPA Strategy identifies additional resources needed by FLETF to implement the UFLPA.
Husch Blackwell continues to monitor developments relating to the UFLPA. In the meantime, for guidance or questions relating to U.S. customs and trade laws, companies can contact Husch Blackwell’s International Trade and Supply Chain team.
Written with the assistance of Matthew Magill, a summer associate in the Husch Blackwell LLP Milwaukee, WI office.