How the Uyghur Forced Labor Prevention Act Will Reshape Supply Chains
Updated: Oct 17
In late 2021, the United States Congress passed nearly unanimously the Uyghur Forced Labor Prevention Act (UFLPA). The bill indicates that the administration must take drastic steps to prevent goods from the Uyghur region in China from entering the United States, because the region is well known for being a hot spot for state-sponsored forced labor. While this is a step in the right direction in terms of economically punishing human rights violations, many American businesses are beginning to worry about the fallout from enforcing the UFLPA.
While only 0.01 percent of total goods imported by the United States come directly from the region, the challenges facing US supply chains are more nuanced. One of the most important clarifications within the UFLPA is that no product may be imported directly from the Uyghur region, nor can any product be imported into the United States whose raw materials may have been sourced from the region. This means a product made in Australia, for example, that contains raw materials from the Uyghur region, is barred from entry into the United States.
Enforcement of the UFLPA by US Customs and Border Protection (CBP) will require intense research into multiple different sectors to discover exactly how deep the roots of Uyghur products run in American supply chains. One area of particular interest are the supply chains associated with solar panels. One of the main products produced in the Uyghur region is polysilicon, one of the most important components to solar panel production. China exports 90% of the world’s polysilicon, half of which is produced in the Uyghur region. While it is currently unknown exactly how much of the US solar panel market will be affected by this policy change, early research indicates that four of the largest solar panel suppliers in the US were sourcing materials from the Uyghur region in 2020.
In a time of preexisting supply chain disruptions and inflated prices there is a high likelihood that the UFLPA could further exaggerate existing shortages. The Department of Homeland Security indicated that the high priority sectors of enforcement include:
Roughly 20% of the world’s cotton supply and 30% of the world’s tomato paste comes from the Uyghur region.
While this is not a good omen economically, the UFLPA does in theory help fight against the rampant human rights violations occurring in China. The Department of Labor believes that nearly 100,000 people who have been detained in China’s notorious “reeducation camps” may being forced to work against their will. If the United States, as the world's largest importer, can play a part in reducing such rights violations, then perhaps the UFPLA is worth its cost.
Ready to Learn More About CBP, OFAC,
BIS, and FDA? - for free! Details below.
We have dozens (literally!) of videos in our educational library on our You Tube channel related to importing, exporting, US Customs, BIS, OFAC, FDA, NFTs, and so much more. Subscribe to our channel now to stay up to date on the latest on these topics!
Our law firm helps growing companies who import and export comply with government regulations. We love what we do and we take our oath of confidentiality over your matters very seriously. How much? Watch this video to learn about it. CLICK HERE
Wondering "why should you have an attorney on your side?" Click here to watch one of our attorneys, Susan Steinman, break down the critical benefits as to why you want to have one on your side - whether you hire us to help you or another law firm.
Have questions? We are determined to help you.
We listen carefully to clients to ensure our understanding of the legal issues at hand, their factual context, and any limitations that might impact a chosen strategy. Feel free to connect with us using the contact form at the bottom of the Home page or send us an email at firstname.lastname@example.org.