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Forced Labor Legislation

Smart In Your World
There is bi-partisan support for forced labor legislation and there are reports that legislation will be passed this year.

Passed Legislation

Uyghur Forced Labor Prevention Act Signed Into Law
The Uyghur Forced Labor Prevention Act (UFLPA) (Public Law No: 117-78) was signed into law on December 23, 2021. The UFLPA aims to address the human rights violations imposed on the Uyghur population and other Muslim minorities in the Xinjiang Autonomous Region (“XUAR”) in the People’s Republic of China (“PRC”). Effective June 21, 2022, 180 days after the enactment of the UFLPA, a rebuttable presumption will apply that goods made in whole or in part in XUAR are made with forced labor and prohibited from importation, unless the importer can provide “clear and convincing evidence” that the goods were not produced with forced labor. This means that finished goods that are produced outside of XUAR (in other parts of China or worldwide),  may still be banned from importation if any XUAR raw materials are used. There is no de minimis exception. Following a notice, comment and hearing period, the Forced Labor Enforcement Task Force (Task Force) is responsible for developing a strategy to enforce the forced labor import prohibitions. The strategy will include the identification of entities that are complicit in, produce, or export materials or goods with forced labor and a list of goods produced with forced labor. The strategy will also include an enforcement plan, guidance to importers regarding required due diligence and documentation required to prove forced labor is not used, and a list of high priority sectors. The UFLPA also provides authority for sanctions for Xinjiang forced labor related activities.

Key Dates
Relevant dates relating to the notice, comment, and hearing period, which importers should highly consider participating in, are as follows:

  • January 24, 2022: The Task Force published a Federal Register Notice soliciting public comments on how best to ensure that goods produced with forced labor are not imported into the United States.
  • March 10, 2022: Deadline to submit comments pursuant to the January 24, 2022 Federal Register Notice
  • April 8, 2022: Within forty-five (45) days after the close of the comment period, a public hearing will be conducted to discuss the use of forced labor in the PRC and measures to prevent the importation of goods produced with forced labor.
  • June 21, 2022: Rebuttable Presumption applies and government strategy must be submitted to Congress.

How to Prepare

  • Conduct due diligence on supply chains and remove any links to XUAR (including raw material manufacturers) in order to prevent U.S. Customs and Border Protection detentions at the border. 
    • ArentFox Schiff’s Forced Labor Task Force has compiled a list of goods sourced from Xinjiang that may serve as a starting point for supply chain due diligence.
    • Compile documentation that evidences no nexus to XUAR.
  • Participate in the comment and hearing process in order to:
    • Advise the Government of any challenges in conducting supply chain due diligence;

    • Consider submitting arguments advocating for exceptions or a de minimis threshold; and

    • Obtain clarification on the “clear and convincing” evidence standard that CBP will require to overcome the presumption of forced labor.

    • Addressing the conflict between the UFLPA requirements and the China Blocking Laws.

Other Pending Legislation

We are continuing to monitor the following pending legislation that relates to forced labor:

  • The Eagle Act (H.R. 3524)- Prohibits the import of all goods, wares, articles or merchandise mined, produced, or manufactured, wholly or in part, by forced labor from the People’s Republic of China and particularly any such goods, wares, articles, or merchandise produced in the XUAR region. The US must also coordinate with Canada and Mexico to effectively implement Article 23.6 of the USMCA to prohibit the importation of goods produced with forced labor, including goods produced with forced labor in China. This bill also provides for sanctions including asset blocking.
  • New York Fashion Sustainability and Social Accountability Act (S7428) imposes supply chain mapping requirements, as well as the disclosure of environmental and social impacts on fashion retailers and manufacturers in New York State.
  • Uyghur Forced Labor Disclosure Act (HR 2072) requires issuers of securities to publicly disclose their activities relating to China’s Xinjiang Uyghur Autonomous Region. Specifically, issuers must disclosure the importation of manufactured goods or raw materials that are sourced from or through the XUAR, as well as the details relating to the manufactured goods including the commercial activity relating to the good/material, the gross revenue and net profits attributable to the good/material, and whether the issuer intends to continue importing such merchandise.
  • Illegal Fishing and Forced Labor Prevention Act (HR 3075) requires increased monitoring of imported seafood in order to detect imports of fish and fish products at risk of being associate with illegal, unreported, or unregulated fishing, human trafficking, forced labor, and seafood fraud. The bill would also increase supply chain transparency in the seafood industry and strengthen enforcement against illegal fishing practices and forced labor.
  • Corporate Governance Improvement and Investor Protection Act (HR 1187) provides for increased disclosure requirements for publicly traded companies including many of the disclosure requirements that are also included in the Uyghur Forced Labor Disclosure Act, which is also pending. Issuers of securities must disclosure the importation of manufactured goods or raw materials that are sourced from or through the XUAR, as well as the details relating to the manufactured goods including the commercial activity relating to the good/material, the gross revenue and net profits attributable to the good/material, and whether the issuer intends to continue importing such merchandise. This bill passed the House on June 16, 2021, and is currently pending in the Senate.
  • Countering Human Trafficking Act of 2021 (S. 2991), which would establish a Center for Countering Human Trafficking (CCHT) within the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, which would operate an Operations unit to support criminal investigations of human trafficking (including sex trafficking and forced labor), and augment the enforcement of the prohibition on the importation of merchandise produced with forced labor through civil and criminal authorities.
  • The Slave Free Business Certification Act of 2022 (S. 3578) requires businesses with annual revenue greater than $500 million to audit their supply chains for labor practices or human trafficking activities that violate specified national or international standards and report results to the Department of Labor. Specifically, the bill requires that the covered entities conduct supply chain audits (including worker and management interviews), the disclosure of policies to prevent forced labor, to evaluate and address risks of forced labor, and to provide training on recognizing and preventing forced labor. It will also require the CEO to certify their compliance with the Act and whether there were any instances of forced labor discovered. Penalties include $100 million in civil damages and $500 million in punitive damages.

For additional details, please refer to our website alert regarding the Uyghur Forced Labor Prevention Act.