What Is The Uyghur Forced Labor Prevention Act And Why Is It Causing Chaos?

Importers in America are fearing the worst as a law to tackle forced labour in China takes effect this Tuesday (tomorrow).

The Uyghur Forced Labor Prevention Act was signed by US President Joe Biden in December. A clock has been ticking since that day.

According to a report by Politico, "the U.S. government’s Forced Labor Enforcement Task Force, in consultation with the director of National Intelligence and the Department of Commerce, had 180 days to publish a plan for the law’s enforcement."

Trade groups claim that key government agencies, including Customs and Border Protection and the Department of Homeland Security, have failed to provide timely and adequate guidance to ensure that importers are able to follow the law.

According to them, the law worsens the risk of supply chain disruptions as it requires importers to prove that no element of their product was produced through forced labour.

"Our members are uncertain of what's acceptable proof to overcome that assumption of forced labor. We're not really getting answers [to] a lot of those questions and what we're hearing is ‘you just have to wait,’...our fear is that you're going to start seeing goods held at the border…only because we haven't been provided with informed guidance,’’ said Eugene Laney, president of the American Association of Exporters and Importers, a Washington, DC-based lobby group, as per the report.

The Uyghur Forced Labor Prevention Act aims to insulate US companies and consumers from complicity in forced labour practices in Xinjiang.

It is the result of US government's conclusion that forced labour is systemic in Xinjiang — one of many state policies targeting Uyghurs that constitute genocide.

A report released last week by Sheffield Hallam University in England documented the use of forced labour in Xinjiang’s polyvinyl chloride production chain.

China has denied these allegations.

Last week, Customs and Border Protection published an operations guide specifying how businesses can prove that their products are untainted by forced labour in Xinjiang.

“We are expecting implementation to be messy. They have released little information beforehand, and companies won’t know many of the details of what they must comply with until the date they must comply," said Craig Allen of the US-China Business Council, as per the report.

The Department of Homeland Security has denied allegations that DHS and CBP had failed to provide importers necessary information to prepare for the law’s implementation.

They have pointed to a Xinjiang Supply China Business Advisory issued in July 2020 and an updated version of that notification published in July 2021.

“I think that DHS is reading the law as an enforcement action more like the Foreign Corrupt Practices Act … where it's your job not to violate the law and if you violate the law and you're found out, then you'll be held accountable,” says John Richmond, former US ambassador-at-large for anti-trafficking, and partner at Dentons US LLP, as per the report.

“I think that DHS is reading the law as an enforcement action more like the Foreign Corrupt Practices Act … where it's your job not to violate the law and if you violate the law and you're found out, then you'll be held accountable," he adds.

There is no relief at sight from Washington either. Companies are not receiving any sympathy from the Capitol Hill.

“Businesses knew this day would come eventually, no matter how much they lobbied to delay and weaken the new law, there is no excuse for being complicit in the Chinese Communist Party’s genocide,” said Senator Marco Rubio. Rubio sponsored the bill in the US Senate.

The importers complain that the outreach by Customs and Border Protection has been counterproductive as it has led to more confusion instead of clarity.

There are also concerns that CBP lacks the capacity to adequately enforce the law.

Last month, McGovern and Sen Jeff Merkley sent a letter to the Homeland Security subcommittees of the House and Senate Appropriations Committee. The letter urged the committee to approve $70 million for CBP “to add enforcement personnel, technological capability, training, and other activities necessary to faithfully implement the law.”

According to the report, the subcommittees have not yet responded to the request.

Importers are seeking a delay in the law’s launch and a rethink of its rollout. As of now, it is unclear if that will happen.