This past December 23rd, the U.S. passed the Uyghur Forced Labor Prevention Act (UFLPA) in Congress. A ban was placed on importing goods from Xinjiang Uyghur (XUAR) Autonomous Region in China to take effect June 21st 2022. President Biden signed it into law. The objective behind the Act is to prevent continual forced labor in the region and prevents companies from importing goods made in that region.
Why is this a monumental shift in the supply chain? For U.S. importers, the UFLPA may not seem significant, but it will affect your business. To begin with Xinjiang Uyghur is a vast region in China—it is roughly double the size of Texas in the U.S.
Of the world’s resources, roughly one-fifth of the global cotton supply comes from this region. Furthermore, almost half of the world’s silicone production occurs here. Countless other goods such as hair products, fruit, and sugar also ship from this region. If you’re even remotely connected to providing these goods, your supply chain is at risk and your business will be affected.
The Uyghur Forced Labor Prevention Act bans all goods from entering the U.S. that meet the following criteria:
Essentially, anyone importing goods into the U.S. whose shipments may contain items that fit any of the above criteria is affected. You may be wondering “How do I keep track of all of the goods and their whole or partial origin?”
As this is new legislation nobody has it exactly figured out yet, and there is little transition to adjust to these trade restrictions.
The only way for a U.S.-based importer to receive a shipment from China is by producing proof that the import doesn’t meet the criteria for inadmissibility into the U.S.
If it is deemed as unacceptable or if the importer has failed to produce proof that it doesn’t violate terms of the Act, the import will be destroyed or shipped to another country’s port that will allow the entry.
As a result of this Act, companies must be aware of who their suppliers are, from raw materials to finished goods. They need to document the chain of custody of their goods coming from China, where the goods are shipped from, where they are made, and where they are stored.
CBX Software has been closely monitoring the evolution of this Act and can work with companies in attaining visibility into their importing practices. Our responsible sourcing and Supply Chain Management platform affords the business to report on several importing components, including audits, assessments, tests, inspections, risk assessments, and several other checkpoints to ensure greater compliance to the new Act.
Contact us today to discuss how your company can prepare for this, and learn more about how CBX can help protect your business.
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