Importers Say CBP Often Silent on Why UFLPA Detentions Were Overturned or Sustained

NEW YORK -- Importers' service providers said CBP's inconsistency and lack of communication about why supply chain documentation was not enough -- or even was enough -- to prove that there was no connection to Xinjiang are the biggest headaches of the Uyghur Forced Labor Prevention Act.

Maytee Pereira, customs and international trade co-leader, PwC, said her clients who have shipments detained and then released because they were able to prove to CBP that the supply chain didn't touch Xinjiang don't know how to replicate that success. "They don't know what they did right," she said.

Felicia Pullam, executive director of the Office of Trade Relations at CBP, said at the top of the panel on forced labor that "we are seeing substantial policy and operational level reforms in industry and by manufacturers overseas. We are seeing that businesses are making hard choices by adjusting supply chains. We know this is very, very hard, but some companies succeed."

Although the panel was at the U.S. Fashion Industry Association's annual conference Nov. 8, Pereira and a customs broker on the panel both gave examples of detentions that were not in the apparel or footwear category.

Apparel has been aware of the issue for years, Pereira said. "This is a relatively new issue for many other industries. When we start talking about peeling this onion, it seems like an impossible enterprise. There is no technology, there is no consultant, there is no one law firm" that can solve supply chain traceability.

Pereira said: "I feel like for the past year, all I've been doing is forced labor."

Apparel detentions have only been 17% of total detentions by volume, and less than 3% of detentions by value, she noted.

Uyghur human rights advocates criticize companies that say they have zero tolerance for forced labor but don't know who sells to their vendors.

Pullam said CBP empathizes with the fact that many importers only know their first two tiers. Several commodities that are getting particular scrutiny under UFLPA -- PVC, polysilicon, cotton -- are the raw materials in finished goods, far down the supply chain.

Pereira said, "It's a misconception that there is inherent visibility existing into tier N of the supply chain." Rather, companies have good knowledge about tiers one, two and three, "and then we fall into a black hole." When you're talking about a product lineup with more than 1,000 suppliers, it's impossible to map them all, she said, so compliance officers tackle part of the supply chain based on a risk assessment. She said they are asking if they should base that on a region, a product, or the commodities that are contained in the finished good.

Panelist Erin Williamson, senior director of customs brokerage product, Geodis, said communication with CBP -- or lack thereof-- is one of the most pressing issues from her perspective when it comes to UFLPA implementation.

Williamson also said the prospect of redelivery notices for 30 days after entry is terrifying. She gave an example of an importer she served as broker to, who brought two entries through Minneapolis. Two weeks later, CBP asked for them back, and they were only partially able to be retrieved.

A bit after the redelivery, CBP said the goods --which were not apparel -- were being detained under suspicion of violating UFLPA. Williamson said CBP tried to argue that the 30-day clock to rebut the presumption started at the request for redelivery, but Geodis showed them that notice of exclusion starts the clock, according to CBP's own regulations, and the agency acquiesced.

CBP reviewed the documents the importer provided, and after about six weeks, excluded the products from the country. The reason given: "failed to request exception."

Since they had asked for an exception, Williamson asked for a revised exclusion notice. She was denied. She asked for a conversation with the Center of Excellence and Expertise, and they declined.

She said she expects the importer will have to pay a fine on the goods that couldn't be redelivered of three times the value of those goods.

Williamson also shared a more positive UFLPA story with the audience. She said goods coming into the Port of Los Angeles were detained, and the client tried to prove the goods didn't include Xinjiang inputs. They didn't succeed. However, one of their suppliers told them that another importer of the same product was able to get goods released. Williamson asked to talk to the Center, and a specialist reviewed the two submissions, and showed how the paperwork from that same vendor was different in the packet that was rejected vs. the one that was successful.

"That was a breath of fresh air," she said.

Pullam told Williamson headquarters appreciates having concrete examples of businesses' complaints and praise of how implementation is going, though she said importers should always start with the Center, as there is sensitivity if businesses go around them to headquarters.

Williamson also asked Pullam why a client's goods with the same supply chain were detained 20 times, when each time, the importer was able to prove to CBP's satisfaction that the goods had no Uyghur inputs. She asked: "What is the procedure to get them to stop being detained?"

Pullam said she would like to know more.

Someone in the audience said they've had upward of 20 shipments detained, each from the same manufacturer, same country of origin, and the same product, and some were released and some weren't.

Pullam said she's always getting asked: "What’s the next commodity that we should be concerned about?" She said she only knows what the trade does, reading allegations in the newspapers.