At Edward J. Zarach & Associates, we always keep a keen eye on developments that affect international trade, supply chains, and our valued clients. As of June 12, 2023, the U.S. Department of Homeland Security (DHS) has made a significant move by adding two Chinese companies to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List. Xinjiang Zhongtai Chemical Co., Ltd. and Ninestar Corporation, alongside eight of its Zhuhai-based subsidiaries, have been implicated in practices exploiting persecuted groups, particularly the Uyghur minorities in the People’s Republic of China (PRC).

Impact of UFLPA:

For those unfamiliar with the UFLPA, this legislation – signed into law by President Biden in December 2021 – firmly prohibits the importation of goods produced in Xinjiang or by any entities identified on the UFLPA Entity List. Importers must provide clear and convincing evidence that the goods were not produced using forced labor. With this new development, twenty-two Chinese companies have found their names on this list.

Enforcement by the CBP:

Since U.S. Customs and Border Protection (CBP) began enforcing the UFLPA in June 2022, they have scrutinized over 4,000 shipments (valued at over $1.3 billion) under this new law. Consequently, 137 shipments were hit with Withhold Release Orders (WROs), effectively preventing importation into the U.S. until the importer can provide irrefutable proof that the goods weren’t produced using forced labor.

Significance for the Logistics Sector:

As international freight forwarders, we sit at the heart of the global supply chain, and our role in arranging the transportation of goods from one country to another is more crucial than ever. Including Xinjiang Zhongtai Chemical Co., Ltd., Ninestar Corporation, and its subsidiaries on the UFLPA Entity List calls for even more vigilance. The repercussions of shipping goods from an entity on the UFLPA Entity List could be severe – seizure of goods, hefty fines, or even the loss of operating licenses.

Moving Forward:

To guard against these risks, international freight forwarders must double down on due diligence, use risk assessment tools, partner with suppliers with robust anti-forced labor policies, and maintain records of these precautionary efforts. This will ensure we uphold our commitment to ethical business practices and keep the global supply chain running smoothly.

For further details on the UFLPA and the Entity List, we recommend visiting the DHS UFLPA and the CBP UFLPA websites or checking out the Federal Register Notice.

At Edward J. Zarach & Associates, we are committed to maintaining transparency and integrity in our operations. Please reach out if you have any questions or need assistance regarding these changes.