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June 24, 2022

UFLPA Overview: How to comply with the new legislation

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With the latest forced labor regulation (UFLPA) in effect as of June 21st, 2022, organizations unable to prove product origins face risks of costly border seizures and reputational damage. To support brands in boosting efficiency and revenue–while also ridding their supply chains of forced labor–check out our FAQs below and recommended next steps.

What is the Uyghur Forced Labor Prevention Act (UFLPA)?

The Uyghur Forced Labor Prevention Act (UFLPA) builds on existing U.S. forced labor import bans by getting more regionally specific—banning imports of any products that were fully or partially produced, mined, or manufactured in Xinjiang, a region of China where Uyghur Muslims are being subjected to forced labor. The act, signed into law on December 23rd and effective as of June 22nd, 2022, enables Customs and Border Patrol to seize goods and impose financial penalties.

Why is the UFLPA important?

This act is a huge step in governmental sustainability regulations and sets a precedent for how organizations will be required to source goods. Experts are keeping a close eye on industries that have long benefited from cheap, foreign labor, such as the fast fashion industry (the Uyghur region is a huge cotton exporter) and large corporations that have made sweeping sustainability claims without robust, data-driven proof.

Which suppliers were banned by the UFLPA?

The Department of Homeland Security published a list of suppliers whose ingredients and products are now completely banned from entering the United States. Suppliers not currently on the list but later found in violation of the act may be added in the future. To avoid supply chain disruptions, knowing who your suppliers are and who they’re sourcing from — all the way down to the first contributor will be key to avoiding border seizures.

What products will likely be affected?

Customs guidance included  products commonly sourced within the Xinjiang region of China by forced Uyghur labor, including:

What can I do to ensure my organization is protected?

Since forced labor can exist deeply within any supply chain, and as worldwide sourcing disruptions and recessions continue, it’s important to take actions that ensure your organization is protected while operating in the most efficient, ethical way possible. As experienced supply chain experts with a passion for helping brands boost revenue efficiently and ethically, we suggest that you:

  1. MAP: Map your supply chain ASAP, with a particular focus on lower-tier visibility. Most tiers upstream from importers go unnoticed in global supply chains, particularly first contributors and the raw materials they supply. Many brands rely on third-party verification or suppliers and aggregators to tell them that their materials are ethically sourced, sustainable, and that individuals are making a fair wage in fair conditions. This type of aggregated, second-source data is not enough to protect you from costly border seizures. So be sure you have complete knowledge of your entire supply chain.
  2. DIGITIZE: Research and implement a digital, data-driven system to help you track and prove origins. After taking time to familiarize yourself with your supply chain, it’s important to streamline and digitize your knowledge and tracking so you get data in real-time. This way, you can more easily uncover inefficiencies, ensure compliance, and take action as needed. Connecting digitally to every individual and supplier will be a gamechanger in maintaining visibility and addressing any risks that arise.
  3. STRATEGIZE: As you gather data and information throughout your supply chain, use this information to drive strategic business decisions. Data collected throughout your entire supply chain will give you the insights you need to boost efficiency, increase revenue, and make a positive impact. The lucrative future of for-profit, for-good business will favor brands who are connected to their entire supply chain and use that data to scale.

Need help getting a handle on your supply chain — from mapping to tracking to scaling? We’ve got your back. Contact the BanQu team here.

BanQu creates blockchain solutions for some of the modern world's biggest challenges, such as supply chain transparency and identity platforms for impoverished populations. We believe that with blockchain's bright future, world poverty can become a thing of the past.

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