DHS Announces 26 New Additions to the UFLPA Entity List

On May 16, 2024, the Department of Homeland Security (DHS) announced the addition of 26 new companies to the UFLPA “Entity List” of companies known to engage in producing materials and goods with forced labor. DHS announced these additions in its role as the Chair of the Forced Labor Enforcement Task Force (FLETF) and as required under section 2(d)(2)(B) of the UFLPA.

Under this statute, DHS must maintain and update four separate lists in a consolidated register of facilities and entities that source material from the Xinjiang Uyghur Autonomous Region (XUAR) or from persons working with the Xinjiang government 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. 

Any importer sourcing goods or goods that contain raw materials from these facilities or entities will have merchandise detained at the time of entry into the U.S. under UFLPA because it will be presumed to be made with forced labor. Importers will then have 30 days to rebut this legal presumption showing that the subject merchandise is not sourced from or does not contain inputs from these facilities/entities. If the importer fails to rebut the presumption and is not able to export the goods out of the U.S., CBP seizes the goods and typically destroys them.

While previous additions to the UFLPA Entity List have been limited to a few companies at a time, this recent addition of 26 entities in one fell swoop dwarfs all other additions to date. The new entities are almost entirely in the textile industry, many are intermediate sellers of cotton or operate warehouses where cotton is stored and are located in China but not in XUAR. Because most Chinese-origin cotton is grown and harvested in XUAR, it is clear that the “whole of government” focus is—for the first time—focused on facilities and entities that are not located in XUAR but are farther down the production stream, e.g., middlemen or agents that do not directly manufacture items made with forced labor in XUAR but that purchase such items and store them in warehouses for further sale.

This comprehensive update to the Entity List follows DHS’ April announcement focusing on increased enforcement efforts to counter illicit trade in textiles that threatens over 500,000 U.S. jobs in this industry. 

The new update to the Entity List further underscores the importance of importers knowing their entire supply chain and having robust internal controls in place to facilitate compliance with UFLPA and all other trade-related regulatory requirements. 

How BDO Can Help

BDO’s global trade and supply chain professionals can proactively assist clients in tracing the supply chain of all materials used in finished goods and address all other aspects of supply chain and global trade compliance and planning (including country of origin determinations). We also can help importers with implementing and enhancing internal controls, including preparing documentation to respond to CBP reviews, supplier surveys, etc.