UFLPA Entity List to Grow by More Than 10 Firms; DHS Will Name New Priority Sectors

When asked by International Trade Today whether the new priority sectors will be those already exposed in news or nongovernmental organization reports, such as fish processed in China or aluminum, or PVC used in flooring, or if there will be surprises, Laura Murphy, a special adviser to the Forced Labor Enforcement Task Force, hesitated, then said, "Sounds like you would start with the ones you came up with."

She said whether all the products that have been identified in reports are named as official high priority sectors or not, importers should treat them as high priority sectors.

Murphy, who used to lead the highest-profile research operation that identified cotton and polysilicon as tainted by Uyghur forced labor, told an audience March 26 at CBP's Trade Facilitation and Cargo Security Summit: "You can expect many more entities to be coming in the next few months." In response to a follow-up question on whether "many more" meant 10 new additions, 100, or 1,000, Murphy responded, "You can expect greater than 10. We're going to put companies on the Entity List. But you shouldn't be waiting for that. You don't want to be caught in a situation where you're making a computer, and you know one of those parts has been named on one of the reports, or you're importing fish from a place where you know is likely to be reported, and you're just waiting for the Entity List to drop because you don't know what day it's going to happen."

Murphy said that in addition to her own list of 55,000 companies with operations in Xinjiang (see 2304200041), there also is a Chinese government publication about what their top priorities for investment in Xinjiang are. "So you can look that up, and make those your priorities, because I can tell you that those are our priorities, too," she said.

"And so don't worry about how many companies are going to end up on the Entity List -- check your supply chain."

Deputy Executive Assistant Commissioner John Leonard, who moderated the panel that Murphy spoke on, said that CBP frequently hears from importers who say, "We want more specificity." The Entity List provides that, he said.

Murphy said one of the primary ways that the Entity List is built out is by looking at the same reports that the public sees.

Eric Choy, executive director for Trade Remedy and Law Enforcement in the Office of Trade, leads the CBP team that enforces the ban on the import of goods made with forced labor. He said, "When those reports come out, we get a significant amount of incoming, whether it's the Hill, other agencies ...."

He later said that the compliance professionals who read reports from non-governmental organizations on forced labor, and read investigative journalism on forced labor, "are the ones getting ahead" of detentions.

Choy said keeping goods made with forced labor out of U.S. commerce is "not something you can detain your way out of." He said CBP needs industry to work with law enforcement, and the agency has seen significant shifts in supply chains as companies try to proactively de-risk.

The evidentiary standards to name a company in a newspaper story or an academic report are not the same as the standard for putting a company on the Entity List, Murphy acknowledged. She said making the transition from academia to government has been interesting to see the process from the inside.

"But what I'll say as somebody who came from academia and is now in government, is that I find the process is really appropriately rigorous. There are many lawyers that view every recommendation across the FLETF, across the seven member agencies," she said. That review "provides the necessary insight and rigor to ensure that the entities that are named to the list are appropriate, and will withstand legal scrutiny."

She said DHS has hired "many more analysts," more people who read Chinese, a new director of research and new lawyers as it ramps up efforts to identify entities.

CBP has added staffing at ports, in Centers of Excellence and Expertise, at headquarters to implement UFLPA, and will continue to expand staff to address forced labor enforcement. Choy said they're delving into the tariff schedule to examine where Xinjiang is part of any product's supply chain.

"We've hit our stride in the agency," he said.

Choy said as "maybe new industries ... may be touched" by UFLPA detentions, his office will continue to engage with industry to educate them on how to conduct adequate due diligence to make sure their supply chains are not marred by Uyghur forced labor.