CBP Developing Guidance Around Uyghur Forced Labor Prevention Act

The two top issues Thomas Overacker, CBP's executive director of cargo and conveyance security, has been dealing with are the blockades at the Canadian border and the Uyghur Forced Labor Prevention Act. He told an audience at the National Association of Foreign-Trade Zones' legislative conference that CBP is going to have a challenge identifying what goods come from the Xinjiang region, given the number of middle men in China, issuing invoices or acting as freight forwarders. "It’s not always evident from the data we collect at CBP … where the goods were actually produced," he said Feb. 15.

Knowing if a good -- or an input -- was made in China's Xinjiang region is crucial, since the UFLPA creates a rebuttable presumption that goods made in Xinjiang were made with forced labor. "Now it’s incumbent on the importer to show otherwise," Overacker said, or it will be on June 23, when the law takes effect. Overacker said that CBP will be providing guidance "well in advance of June." Trade lawyers had expected that guidance not to come early enough to be of use to importers (see 2112280048).

Whatever the precise guidance will be, the heart of it is likely to be what Overacker said CBP expects, which is that importers know where their goods were produced, and where their inputs come from. Overacker said that the agency is going to try to be as precise as it can when identifying goods that come from Xinjiang, and will try to minimize the impact on traders, "so we are not grinding trade to a halt to try and determine whether [goods] did or did not come from Xinjiang."

Overacker didn't mention the issues of labor transfers of Muslim minorities within China during his talk, or the problem of goods imported from other countries that could have Xinjiang content. Both of those are also covered in the law. "Labor transfer is an issue, no question about it," he said. "That's one of those things, though, where we have to rely on credible information in order to identify that." He said that other agencies in the government can help, and that CBP relies on civil society groups that work on the issue. "We need to have credible information in order to act on that," he said.

When it comes to Xinjiang inputs in goods produced in foreign countries, he said that's also an information challenge, and CBP will have to rely on "the information we can glean from the trade community and others to try to pinpoint that as best we can. But it's not 100% certain, but we will do the best we can to enforce the act as written."

Jim Swanson, director of the cargo and security controls division under Overacker, also spoke at the conference. He told the group that CBP is working on writing regulations on goods subject to withhold release orders being stored at foreign-trade zones until a determination is made. Allowing these goods to be stored at FTZs would allow importers to avoid paying demurrage. This is already happening (see 2109220015), but regulations would make the procedures clearer.

Swanson said clarifying the procedures for FTZs to hold these goods will become more important as the Uyghur Forced Labor Prevention Act goes into effect. "Stay tuned," he said. "This is not going to go away anytime soon, and we’re going to need to have a way to deal with that merchandise as it arrives."