U.S. Apparel Importers to Face Challenges Under Xinjiang Bill

Updated: Feb 1

By Just Style

This article was published in Just Style January 13, 2022. Read more about the Xinjiang Ban here.

Apparel companies that are not engaging in comprehensive supplier mapping and due diligence will face significant challenges importing goods into the US under the newly introduced Xinjiang Uyghur Forced Labor Prevention Act (UFLPA).

The Uyghur Forced Labor Prevention Act (UFLPA), signed into law on 23 December, which specifically targets the Xinjiang Uyghur Autonomous Region of China, requires companies, including apparel brands and retailers, to ensure goods mined, produced, or manufactured wholly or in part with forced labour… are not imported into the United States.

According to Verisk Maplecroft, a research firm specialising in global risk analytics, the new law’s expansive scope and high evidentiary standard creates arguably the most challenging legal and operational hurdles they face thus far with respect to Xinjiang.

“The Act is, to date, the most condemnatory and uncompromising US law against China’s Xinjiang policy, as it establishes a “rebuttable presumption” that all goods produced in Xinjiang are made with forced labour,” explains Verisk Maplecroft human rights analyst, Sofia Nazalya.

“While previous actions targeted specific products, such as the US Customs and Border Protection (CBP) ban on imports of cotton and tomato products in January 2021, the presumption of forced labour region-wide effectively prohibits the importation of all goods arising out of Xinjiang. This will therefore have significant disruptive impact across multiple sectors.

“Companies seeking to continue the import of Xinjiang goods must provide “clear and convincing evidence” that the goods were not manufactured with forced labour, shifting the burden of proof away from customs officials.

The Challenge for the Apparel Sector

The ULFPA will cause sizable disruptions requiring companies to relocate, or at the very least, strengthen their due diligence processes of their Xinjiang-linked operations.

But it also requires companies to prevent the occurrence of Uyghur forced labour in supply chains

Verisk Maplecroft, citing reports, says more than half of China’s exports of cotton semi-finished products are exported to Asian garment manufacturing hubs, where international intermediary factories produce finished garments.

“For apparel and textile companies to adequately meet their legal obligations under the UFLPA, they will have to ascertain that none of the cotton that goes into the garment production of their extensive, and very often highly complex, factory supply chain is sourced from Xinjiang…This will be no easy feat,” asserts Nazalya.

“The UFLPA is certainly the most sweeping measure to date taken against Xinjiang. The complex nature of global supply chains will make it immensely difficult for affected companies to confidently guarantee that they are in no way, shape or form sourcing from the region.

“Their compliance pathway must extend beyond ensuring their Tier 1 suppliers are not located in Xinjiang. The ability to fully map out supply chains to include the suppliers of intermediaries is key to having a more accurate picture of a company’s exposure to forced labour in Xinjiang. Without this, Xinjiang products – namely cotton, agricultural commodities and polysilicon – will continue to find their way into international supply chains, meaning companies may continue to inadvertently profit from Uyghur forced labour.”

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