The first quarter of 2024 saw an uptick in Uyghur Forced Labor Prevention Act (UFLPA) enforcement from U.S. Department of Homeland Security (DHS) and U.S. Customs and Border Protection (CBP). CBP's recently updated detention statistics reflect an increase in enforcement across sectors this quarter compared to the same time last year, with electronic products comprising a significant portion of those detentions. In parallel with rising enforcement activity, Q1 was also characterized by continued pressure from congressional and non-governmental stakeholders to expand UFLPA enforcement.

This high pace of Q1 enforcement shows no signs of slowing for rest of 2024. Recent activity suggests that DHS will soon add more companies to the UFLPA Entity List and CBP will expand the scope of UFLPA detentions to new priority products. CBP has already started to dig deeper into the solar and apparel supply chains and expand its scope of enforcement to cover new electronics products. In addition, CBP is beginning to target new industries that are linked to forced labor but historically have not experienced significant enforcement, including the automotive industry. 

Refresher on the UFLPA

• Section 307 of the Tariff Act of 1930, as amended (19 U.S.C. § 1307), prohibits the importation of products made from forced labor — specifically all ". . . goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in any foreign country by convict labor or/and forced labor or/and indentured labor under penal sanctions."
• The UFLPA supports the enforcement of 19 U.S.C. § 1307 by requiring CBP to apply a rebuttable presumption that imports of goods manufactured, wholly or partially, in the Xinjiang Uyghur Autonomous Region (XUAR) of the People's Republic of China (PRC), or by entities listed on the UFLPA Entity List, are made with forced labor and therefore not eligible for entry into the U.S. The presumption also applies to goods made in, or shipped through, the PRC and other countries that include inputs made in the XUAR.
• To comply with the UFLPA, CBP expects importers to conduct due diligence, implement effective supply chain tracing, and execute appropriate supply chain controls to ensure that goods entering into the U.S. are not prohibited under the UFLPA. 

Q1 Activity Foreshadows an Increase in UFLPA Enforcement

Enforcement on the Rise. The first quarter of 2024 was marked by an increase in enforcement relative to the same time last year. Per CBP's data, the number of detentions across all sectors is up 30 percent in 2024, while the value of detained shipments is up 300 percent.

The exponentially large increase in the value of detained shipments is likely explained by the corresponding uptick in electronics shipments detained in 2024. Electronics detentions — which now include more than just solar panels — comprise 64 percent of 2024 detentions, surpassing the next highest detained industry four-fold. In comparison, electronics accounted for only 29 percent of all detentions and represented the second most detained industry for the same time period in 2023. 

UFLPA Detentions by Sector - January and February 2024

UFLPA Detentions by Sector - January and February 2023

Increased Funding for Forced Labor Enforcement. The appropriations bill passed in March 2024 allocates increased funding to both DHS and CBP specifically for forced labor enforcement. The legislation provides DHS with an additional $20 million in funds relative to last year's budget, designated towards detecting and detaining goods made with forced labor. CBP's Office of Trade received a $10.5 million higher allocation than the agency requested in order to rejuvenate its activities combatting forced labor and to hire 150 more CBP officers to support the screening of goods entering the U.S. 

Imminent Expansion of UFLPA Entity List. Products made by entities on the UFLPA Entity List are presumed to be made with forced labor and therefore cannot be imported into the U.S. Currently, the list includes 30 companies, 10 of which were added in 2023. At a January hearing of the U.S. House of Representatives' Committee on Homeland Security, senior DHS official Christa Brozowoski explained that "DHS has established a team . . . solely devoted to the development and the administration of the Entity List" and "has shifted considerable resources towards this very important mission." Ms. Brozowoski remarked that she "agree[d] 100 percent that we need to scale [the Entity List]," adding that the DHS's work since the enactment of the UFLPA "has really been focused on setting up a robust, methodologically sound process, but . . . we are now at the point where we can really start to grind those wheels and move forward much quicker." At a recent CBP conference, DHS policy advisor Laura Murphy reiterated the same message and noted that DHS "expect[s] many more entities to be coming in the next few months." With expansion of the UFLPA Entity List, newly named companies may raise legal challenges in U.S. courts to dispute their designation. For instance, Ninestar, a Chinese laser printer manufacturer, has claimed in an ongoing lawsuit that DHS violated the Administrative Procedure Act (APA) when it added Ninestar to the UFLPA Entity List.

Enforcement Focus on New Products. UFLPA Detention Notices include a non-exhaustive list of documents that an importer should submit to CBP to substantiate a claim that detained merchandise is not subject to the UFLPA and is therefore admissible. Last year, CBP added supplemental commodity-specific document guidance for new products beyond the three initial high-priority sectors for enforcement (polysilicon, cotton, and tomatoes). The most recent version of the UFLPA Detention Notice lists document guidance for: aluminum products, batteries, cotton products, polysilicon products, polyvinyl chloride (PVC) products, steel products, tires for automobiles and trucks, and tomato products. Although not referenced in the UFLPA Detention Notice, DHS has also identified copper and downstream products, electronics and other automobile components, red dates, and other agricultural products as enforcement priorities. Although CBP is now detaining electronics products outside of its historical focus on solar panels, the agency has yet to ramp up enforcement for the other identified products. Nevertheless, this document guidance and new Detention Notices have laid the groundwork for future CBP detentions.

Heightened Scrutiny of Solar and Renewable Energy. It is well-documented that solar panels are the single most detained product under the UFLPA. However, most detentions concern only a handful of companies. As reported in Bloomberg, in an apparent effort to expand the scope of enforcement to include more solar importers, CBP's Office of Regulatory Audit sent a 19-page questionnaire to several solar panel importers in February to evaluate their compliance with the UFLPA. These industry-wide audit questionnaires request more detailed information from companies than CBP Detention Notices and could lead to further inquiries in other high-risk industries.

Enhanced Focus on Auto Sector. In February, several newspapers reported that CBP impounded thousands of Volkswagen Group vehicles at U.S. ports – including Bentley, Porsche, and Audi automobiles – after Volkswagen voluntarily disclosed to CBP that the vehicles contained a small component from "Western China." Later, the Wall Street Journal reported that the component at issue is a Local Area Network (LAN) transformer made by a sub-supplier that was recently placed on the UFLPA Entity List. Previous reports from non-governmental organizations (NGOs) and academia on the connections between the XUAR and the automobile supply chain, as well as Senator Ron Wyden's (D-OR) congressional probe into large automotive manufacturers sourcing practices, prompted speculation among the trade community that more auto enforcement is on the horizon. It remains to be seen whether these impoundments are the precursor to anticipated auto enforcement by CBP and whether CBP will begin focus on the entire automobile rather than only on specific components.

Anticipated Spotlight on Apparel. In its January letter to DHS, the Select Committee on China noted that, despite "DHS identifying cotton as a UFLPA priority enforcement sector" and a massive volume of $184 billion in imports, "CBP detained an anemic $43 million in shipments of textiles, apparel, and footwear" between June 2022 and September 2023. In fact, "CBP's average UFLPA reviews per month for textile and apparel goods . . . dropped in 2023 compared to 2022." Additionally, the Select Committee voiced its concern that apparel and footwear manufacturers in Vietnam and Latin America are using XUAR-origin cotton in U.S.-bound goods. 

Soon after, DHS issued a press release stating that "CBP has already begun to increase enforcement in [the textile and apparel] arena." DHS also noted that Secretary Alejandro Mayorkas requested "a comprehensive enforcement action plan in 30 days" to this end. In addition to DHS's stated intention to use "traditional methods such as physical inspection by CBP officers, testing and analysis by CBP laboratories, textile production verification visits, and audits," CBP will surely leverage its new isotopic testing labs. A CBP senior official told the Committee on Homeland Security that CBP opened its first isotopic testing lab in January and plans to open two more this year. Although the details of DHS's enforcement plan have not yet been released, it is reasonable to assume there will be a resulting uptick in apparel detentions in light of these developments.

Pressure from Other Stakeholders. Various stakeholders interested in forced labor issues have provided CBP ammunition to target certain industries. Academia and NGOs have been active in linking new industries to forced labor, including pharmaceuticals, seafood, aluminum, automobiles, and critical minerals. Similarly, congressional engagement on forced labor issues through investigations and reports — including in the automotive, seafood, and critical minerals industries — will likely continue to shape DHS and CBP enforcement priorities. Finally, private entities may also be directing enforcement targets through their prolific use of the CBP's e-allegations system. CBP recently released statistics that show a significant annual increase of alleged forced labor violations since 2021. Over 2,000 e-allegations were filed in 2023, of which approximately 10 percent concerned forced labor, as illustrated by the graph below. 

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Together, these Q1 activities inform what the trade community can expect throughout the remainder of 2024. Higher levels of detention this quarter, CBP's increased budget, the soon-anticipated expansion of the UFLPA's Entity List, and the growing scope of CBP's priority industries and products signal an upward trajectory in UFLPA enforcement. 

Miller & Chevalier has deep experience in both proactive UFLPA compliance strategies to mitigate the risk of detentions and interfacing with CBP to secure the release of detained goods. Our team is led by a former CBP attorney and includes attorneys with extensive knowledge of U.S. anti-forced labor laws and priority sectors, and Mandarin language skills. Contact us for further details on how Miller & Chevalier's Business & Human Rights and Customs & Import Trade practices are helping companies develop strategic approaches to anti-forced labor compliance.

Richard A. Mojica, rmojica@milchev.com, 202-626-1571

Brittany Huamani, bhuamani@milchev.com, 202-626-5911

Aditi Patil, apatil@milchev.com, 202-626-1485

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