Schedule ‘Unworkable’ for Imposing Forced Labor Import Restrictions: CTA

Though the consumer tech industry “condemns the use of forced labor” and “unequivocally supports” the Biden administration’s efforts “to end this scourge around the world,” there are concerns about the timing of import restrictions under the Uyghur Forced Labor Prevention Act (UFLPA), commented CTA in docket DHS-2022-0001. Comments were due Thursday in response to a Department of Homeland Security notice in January on how best to comply with the UFLPA by preventing goods produced with forced labor in China from being imported into the U.S.

President Joe Biden signed the UFLPA into law Dec. 23, using his Tariff Act Section 307 authority to ban imports originating in Xinjiang unless the importer of record shows Customs and Border Protection “clear and convincing evidence” that the goods were not produced with forced labor (see 2112250001). U.S. allegations of forced labor and genocide in Xinjiang “are nothing but vicious lies concocted by anti-China forces,” said Beijing of the UFLPA's signing.

The statute’s “rebuttable presumption” requirement is “a novel and powerful tool,” but implementing it “will be challenging for both government and the private sector,” said CTA. Only through “public-private cooperation” will DHS and the Forced Labor Enforcement Task Force (FLETF) be able to “strike the best possible balance of implementing U.S. laws and regulations regarding forced labor while maintaining U.S. industry competitiveness and strengthening U.S. technology leadership,” it said.

Consumer tech companies “will know their first-tier suppliers and often have a vast array of suppliers in the first tier alone, indicating the challenges of the law’s implementation beyond the first tier,” said CTA. “But it can be difficult to know the suppliers of the raw materials that go into the inputs for their final products.”

It’s therefore “critical” that the FLETF, in its strategy and guidance to importers, “specify in the most practical and plain terms possible what constitutes ‘clear and convincing evidence’ that imports do not contain goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part with forced labor” in China, said CTA. “Any evidence that would be required should be as equally accessible and available” to small and medium enterprises “as it is to larger companies,” it said.

“Timing is everything,” and the FLETF “must give importers more time to comply with the rebuttable presumption,” said CTA. The association worries about how the FLETF will comply with the “overlapping deadlines set out in the UFLPA,” it said.

The rebuttable presumption takes effect June 21, but under the statute, the FLETF must also submit its enforcement strategy to Congress and publish implementation guidance to importers on the same date, said CTA. It’s the association’s “strong view” that the schedule is “unworkable,” it said. CTA worries it would “disproportionately impact” U.S. companies if the administration begins enforcement of the UFLPA “without first allowing companies time to review and understand the expectations and guidelines,” it said.

Though CTA member companies have processes in place to comply with customs laws enacted before UFLPA, “altering internal procedures in response to the FLETF’s new guidance will take time,” said the association. OEMs will have procured parts “well in advance of the compliance date,” said CTA. “Retroactive application of the guidance to these already-designed and, in some cases, already-manufactured, products could result in significant disruptions.”

Many companies will have shipped items months before the guidance becomes available, calling into question whether products on the water will be “at higher risk of detention” by CBP, said CTA. Many companies “may simply lack the particular kinds of evidence, records, or due diligence processes that will be expected pursuant to the guidance,” it said. “Companies will need time to establish such internal policies and processes and gather necessary documentation.”

CTA urges DHS and the FLETF to direct CBP “to conduct restrained enforcement for no less than the first six months following the roll out of the guidance and the enforcement strategy,” it said. Amid the complexity of consumer tech supply chains, DHS and the FLETF should consider extending restrained enforcement for a year or more, it said. That would give manufacturers and importers “sufficient time to investigate and correct any existing issues and to update internal policies and procedures consistent with the expectations of the FLETF,” it said.

The FLETF should “dialogue directly” with industry during the leadup to the implementation of the rebuttable presumption, said CTA. “Ongoing dialogue will be necessary to ensure successful enforcement and high rates of compliance.” CTA strongly urges the FLETF “to subject the enforcement strategy and guidance to importers to notice and comment processes” consistent with Administrative Procedure Act protections against sloppy, non-transparent rulemakings, it said.