Specialty Fabrics Review March 2022 - 42

[ MARKETS ] ADVANCED TEXTILES
O
New Year, new
reasons to know
your supply chain
New law will impact
how textile companies
do business.
by Nate Bolin
N DECEMBER 23, 2021, PRESIDENT BIDEN SIGNED
into law the Uyghur Forced Labor Prevention Act (UFLPA)
which will significantly raise the stakes for any company
importing from or doing business with China. Most significantly,
once the statute fully comes into effect in 2022, importers of a
wide range of products into the United States-including many
textile-related products-will need to prove that their products
do not originate from the Xinjiang region of China, or otherwise
contain content from that region, or that is the product of forced
labor in China.
Importers who cannot meet this standard of proof may see
their imports detained and may be subject to additional U.S.
government scrutiny, including potential criminal prosecution.
In addition, publicly traded companies subject to Securities
and Exchange Commission (SEC) regulations will now need to
report on the presence of forced labor inputs from China in their
products and supply chains.
Complicating the picture, the prospect of Chinese retaliation
for the new law means that many companies will soon be forced
to make a choice about when and how to remain engaged with the
Chinese market. Knowing all aspects of your supply chain is thus a
critical task awaiting all companies in the advanced textile industry.
Understanding import bans
Under the new law, U.S. Customs and Border Protection (CBP) must
implement, by April 22, 2022, a region-wide withhold release order
(WRO) on all merchandise imports into the U.S. that are believed
to originate from the Xinjiang region of China or otherwise contain
content from that region or that is the product of forced labor related
to repression of the Uyghur minority or other minority groups in
China. The presumption will be applied under Section 307 of the
Trade Act of 1930, as amended (19 U.S.C. § 1307) and is expected
to be enforced in a similar fashion to the ban on products of North
Korean forced labor that were implemented in 2017-2018.
Among other things, importers suspected of importing subject
Photo: © Phper, www.dreamstime.com.
merchandise will need to prove by " clear and convincing evidence "
that the merchandise is not the product of Xinjiang or forced
labor in China. Otherwise, such merchandise will be detained and
possibly destroyed. To meet the " clear and convincing evidence "
standard, importers will likely need to be able to produce records
covering their entire supply chain for the imported product
and details such as lists of employees, the wages paid to those
employees, details on labor conditions at each production location,
and independent third-party reports.
In the coming months, CBP is expected to issue further
guidance to assist companies with proper supply chain due
diligence and compliance with the new restrictions. Based on
recent U.S. government guidance, including last summer's Xinjiang
42 SPECIALTY FABRICS REVIEW / March 2022
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Specialty Fabrics Review March 2022

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