The long awaited Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China Report to Congress dated June 17, 2022 was issued late Friday by the Department of Homeland Security Office of Strategy, Policy and Plans. The 60-page document is a sobering guide to what can be expected on imports from the Xinjiang Uyghur Autonomous Region of the People’s Republic of China and from entities on the Entities lists, all imports from China, and imports from any other country using China origin materials effective June 21. The clear statement about downstream products incorporating China origin material expands this process to any global production. As we previously noted in our Update dated June 3. CBP will immediately implement the law. The legal standards are not crystal clear. There are no de minimis exceptions, WRO’s will not be issued, and detention will occur.
Based upon our initial review, clients should focus on the following:
- ENTITIES LISTS. There are 52 entities identified with aliases as directly related to imported materials. Clients should immediately search purchasing/logistics records for these names for direct/indirect imports.
- HIGH-PRIORITY ENFORCEMENT SECTORS. The named sectors are apparel, cotton and cotton products, silica-based products (including polysilicon), and tomato and downstream products. However, in the named entities lists are identified textiles, clothing, garments, computer parts, electronics, hair products, rail transportation equipment, touchscreens for handheld devices and cars and other similar products, and solar- grade polysilicon.
- GUIDANCE TO IMPORTERS. The text is not explicit. While the “rebuttable presumption” standard is set out there is an alternate mechanism to “request an exception” that requires a “clear and convincing evidence” submission. Further, if an exception is secured it is granted by the Commissioner, submitted to Congress, and made available to the public in a report outlining the evidence supporting the exception. The Due Diligence identified sets out eight specific requirements. The Effective Supply Chain Tracing provision requires first mapping of the entire supply chain and concludes with the requirement to demonstrate chain of custody from origin to the buyer of the finished product.
- EVIDENCE. The text describes highly detailed requirements. If materials are from different supplier’s lot number identification or DNA or Isotopic testing may be required.
- EVIDENCE TO OBTAIN AN EXCEPTION. In addition to the mapping of the supply chain and transport, a complete worker list at each entity with highly detailed information on worker identity, wages, recruitment, etc.
We encourage our clients to review the details of the document published late yesterday. We will be further analyzing the details in the sixty-page document. Contact Marshall Miller, Sean Murray, Brian Murphy, or Bryan Brown for guidance.