What's Happening?
As the Uyghur Forced Labor Prevention Act (UFLPA) entered its third year, enforcement by Customs and Border Protection (CBP) and the Department of Homeland Security (DHS) increased significantly. In 2024,
CBP detained 428 shipments per month on average, marking a 25 percent increase from 2023. The UFLPA requires CBP to apply a rebuttable presumption that imports from the Xinjiang Uyghur Autonomous Region (XUAR) or by entities on the UFLPA Entity List are made with forced labor. The Entity List expanded rapidly in 2024, now containing 107 companies, more than double where it began the year. The enforcement efforts have focused on industries such as electronics, automotive/aerospace, and apparel, with significant growth in detentions.
Why It's Important?
The intensified enforcement of the UFLPA by CBP has significant implications for U.S. importers and industries. The increase in detentions reflects a shift in focus towards lower value goods or component parts, impacting industries such as automotive and aerospace. The enforcement aims to address human rights abuses and promote accountability for forced labor practices. The expansion of the Entity List and increased detentions signal a robust enforcement approach, with potential consequences for companies with supply chains connected to the XUAR. The enforcement efforts are supported by congressional backing, with calls for improved cooperation to prevent circumvention of the UFLPA.
What's Next?
CBP is expected to continue its robust enforcement of the UFLPA in 2025, with potential further increases in detentions. The focus on high-priority sectors, such as aluminum and critical minerals, suggests a likely increase in automotive detentions. The expansion of the Entity List is anticipated to continue, with further additions expected. Companies are advised to assess their compliance with the UFLPA and consider diversifying their supply chains to mitigate risks. The enforcement efforts may influence broader U.S. government policy goals regarding China, with potential implications for trade relations.
