China Select Committee Calls for Expansion of UFLPA Entity List To Include Companies Outside China; Other Enforcement Enhancements

On January 19, 2024, the Select Committee on the Chinese Communist Party (“China Select Committee”) published a letter to Department of Homeland Security Secretary Alejandro Mayorkas calling for strengthened enforcement of the Uyghur Forced Labor Prevention Act (“UFLPA”). The letter was signed by chairman Mike Gallagher (R - WI) and ranking member Raja Krishnamoorthi (D - IL) of the committee.

Among many specific requests for expanded enforcement, the letter makes an unprecedented call expanding the UFLPA Entity List to include companies outside of China (without proposing any revision to the statutory language).

As of January 26, 2024, the UFLPA Entity List is populated by 37 entities,[1] 25 of which are located within the Xinjiang Uyghur Autonomous Region (“XUAR”), and 12 of which are located elsewhere in China. The letter cites an urgent need to expand the UFLPA Entity List to include numerous companies and entities located outside the XUAR,” which could be justified for Chinese companies that have participated in social programs that the U.S. regards as constituting forced labor.

But the letter also calls for adding companies outside the PRC that profit from the use of Uyghur forced labor to the UFLPA Entity List.” (Letter at 4, emphasis added.) Later, the letter asks: Despite nearly two billion dollars’ worth of shipments from third countries being detained for UFLPA violations, why has DHS not listed a single company outside the PRC on the UFLPA Entity List?” (Letter at 7, emphasis added.)

This request is made in the context of a call for U.S. Customs and Border Protection (CBP) to aggressively step up enforcement of potential UFLPA violations by goods shipped from the PRC and indirectly through third countries.” As the letter notes, a significant volume of UFLPA detentions to date have been directed at goods of Vietnam and Malaysia. Accordingly, the continued aggressive enforcement by CBP of the UFLPA against third country goods would not be new; adding non-Chinese companies to the UFLPA Entity List, on the other hand, would represent a dramatic escalation of UFLPA enforcement.

The text of the UFLPA provides specific criteria for inclusion of an entity on the UFLPA Entity Lists. These include:

  • entities within the XUAR that mine, produce, or manufacture” goods, wholly or in part with forced labor;
  • entities that work with the government of the XUAR to recruit, transport, transfer, harbor or receive” forced labor, Uyghurs, Kazakhs, Kyrgyz or members of other persecuted groups out of the XUAR”;
  • entities that export products from the foregoing entities from the People’s Republic of China into the United States”; and
  • a list of facilities and entities, including the Xinjiang Production and Construction Corps, that source material from the Xinjiang Uyghur Autonomous Region or from persons working with the government of the Xinjiang Uyghur Autonomous Region or the Xinjiang Production and Construction Corps for purposes of the ‘‘poverty alleviation’ program or the pairing-assistance’ program or any other government labor scheme that uses forced labor.”

While potentially amenable to different interpretations, these categories do not obviously encompass companies outside the PRC that profit from the use of Uyghur forced labor,” as proposed in the China Select Committee letter. The letter does not cite statutory text to justify this request.

In addition to the foregoing demand, the letter makes numerous additional requests including:

  • identifying 29 companies for proposed inclusion on the UFLPA Entity List, all located within China;
  • Expanding UFLPA enforcement against de minimis shipments (valued under $800 per person per day);
  • expanding product & sectoral focus for UFLPA enforcement to include gold, seafood and critical minerals; and
  • increasing site inspections for compliance with the UFLPA and other trade laws in Dominican Republic-Central America Free Trade Agreement (“CAFTA-DR”) and United States-Mexico-Canada Agreement (“USMCA”) countries, echoing a request from the Senate Committee on Finance in November 2023.

This letter is the latest in a long line of congressional correspondence to the Executive Branch calling for different manner of increased enforcement for the UFLPA. Kelley Drye is tracking all congressional correspondence related to the UFLPA and is happy to provide this information to clients upon request.

Should you have any further questions about the trends and developments in UFLPA enforcement, please do not hesitate to contact us.

[1] The letter mistakenly states that there are 41 entities listed. Four entities are listed twice under different categories of the UFLPA Entity List.