The latest UFLPA Entity List 2024 update is out, and 5 new companies were added on August 9, 2024. The US Department of Homeland Security is continuing its crackdown on the use of Forced Labor in China by adding to the UFLPA Entity List in 2024. As of August 9^th, 2024, goods produced by these companies will be restricted from entering the United States under the Uyghur Forced Labor Prevention Act (UFLPA).

The US has added the most companies to the UFLPA Entity List in 2024 since the law went into effect in 2022, bringing the total list of restricted entities to 73. The UFLPA was enacted to prevent products and raw materials produced using forced labor in the Xinjiang Uyghur region from entering and being sold in the US.

UFLPA Increasingly Impacting Electronics Supply Chain

The latest August update added to the UFLPA Entity List, including producers of raw materials such as copper, zinc, silver, and magnesium. As the list continues to rapidly expand, it is important that procurement and supply chain personnel are fully informed on where their components and raw materials are sourced. If the product has any input from the Xinjiang Uyghur Autonomous Region (XUAR), even from a Tier 3 or 4 supplier, it is still subject to UFLPA.

This is especially important for businesses that import polysilicon, a key component in producing solar panels and one of the main materials targeted in the creation of the UFLPA. While dependence on China for polysilicon is starting to decline, the Xinjiang region still accounts for 35% of the world’s polysilicon according to a 2023 report.

UFLPA Entity List 2024 Enforcement Statistics and Consequences

Companies can face serious consequences for importing products made using forced labor under the UFLPA, including:

• Goods being seized or detained by US Customs and Border Protection
• Monetary penalties
• Goods being held until the importer can prove they were not made using forced labor

As of August 26^th, 2024, according to the US Customs and Border Protection, enforcement of the UFLPA has impacted over 9,000 shipments valued at $3.5 billion.

UFLPA enforcement by key industries since 2022:

• Electronics: $500 million worth of Electronics shipments have been denied and $291 million are still being assessed.
• Aerospace and Automotive: $3.5 million worth of Aerospace and Automotive shipments have been denied, and $15.7 million are still being assessed.
• Industrial and Manufacturing Materials: $67 million worth of Manufacturing Materials shipments have been denied, and $2.5 million are still being assessed.
• Base Metals: $29 million worth of Base Metals shipments have been denied, and $23 million are still being assessed.

How to Avoid Importing Issues under the UFLPA

Businesses can avoid potential importing issues under the UFLPA by mapping their supply chains to ensure the components and raw materials used in their products do not go through XUAR.

The US Customs and Border Protection released the UFLPA Operational Guidance for Importers to help importers comply with UFLPA. This includes what documentation companies should prepare in the event their imports are questioned at US ports.  This documentation includes:

• Transaction and Supply Chain Records:
  • Full records of transactions and supply chain documentation that demonstrate the country of origin and its components (e.g., packing list, bill of lading, manifest);
• Documents Demonstrating the Parties Participating in the Transaction:
  • All parties involved in the manufacture, manipulation, or export of a particular good (e.g., summarize the roles of parties involved as substantiated by other supporting documents, flow chart of supply chain);
• Documentation Relating to the Payment and Transportation of Raw Materials:
  • The origin of the raw materials, and documentation showing that these business transactions (e.g., invoices, contracts, purchase orders) have occurred financially (e.g., proof of payments) and physically (e.g., documents to support goods were transferred from one entity to another.)