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Forced Labor Prevention Outlook 2024

by | Dec 27, 2023 | Blog Post

Looking ahead to 2024, challenges related to Forced Labor Prevention cannot be ignored. Today, no trade compliance issue gets more legal, regulatory and enforcement focus globally than forced labor prevention.

Here in the US, the Uyghur Forced Labor Prevention Act (UFLPA) was enacted to address human rights abuses in the Xinjiang Uyghur Autonomous Region in China. The UFLPA is unique because it contains a “rebuttable presumption” that goods coming from the Xinjiang region or having any association with the region or parties on the entities list, may not be imported into the U.S. unless the importer can prove the products have no connection to forced labor, a nearly impossible task given the complexity of supply chains today.

Labor rights violations in other areas of the world also have resulted in additional actions by U.S. Customs and Border Protection (US CBP). Regardless of the product category or country of origin of your goods, forced labor prevention requires your attention in 2024 to avoid costly delays, loss of sales and damage to your brand’s reputation. Today, we’ll share an update on global forced labor regulations and offer a few best practices that you can employ in your business in the new year.

Forced labor prevention update

It’s not easy for busy supply chain professionals to stay informed on issues that impact this important topic. Here’s a quick rundown to help you assess current trends and US CBP updates in the context of your own company’s situation.

  • Supply chain leaders must ensure their supply chains are free of forced labor. In the past, importers were not expected to understand the origins of their products and where and how raw materials and finished goods were made. In a recent update, US CBP reaffirmed its expectation that importers map their products back to component materials. The agency advised that enforcement will ultimately expand to all products imported into the U.S. See the latest statistics on US CBP’s forced labor holds.
  • Additional parties have been added to the UFLPA Entity List. See the latest list.
  • Nearshoring, friend-shoring and China Plus One trends favor movement of a portion of production to U.S. tariff-friendly locations, like Vietnam, India or Mexico. Plan carefully, however, and have a keen understanding of your supply map. Many cargo owners have shifted sourcing only to learn that the new suppliers are buying components from the same locations in China, or even transshipping finished goods from China.
  • If you are selling to global markets like Mexico, Canada, the UK, the EU, Australia, and Germany, understand the forced labor prevention regulations that have been implemented in these countries to assure your overseas sales are protected. Some of the steps you take to comply with U.S. regulations may be leveraged for your export sales, too.
  • Traders not currently CTPAT members could consider the program, as US CBP may add more benefits in the coming year in the area of forced labor prevention. Anti-trade sentiment in the U.S. continues and the recent report issued by the Select Committee on the Chinese Communist Party highlights the intense scrutiny on imports from China. Companies purchasing goods with any Chinese components should anticipate the possibility of additional trade actions and stay current with proposed legislation and regulation.Many importers are integrating budget-friendly supply chain tracing technology into their 2024 compliance strategy. As US CBP uses these tools more actively, it’s difficult for importers to meet compliance expectations without some automation to help mitigate risk.

Stepping up forced labor prevention in 2024

Here are 3 strategies to help keep your supply chain free of forced labor in 2024 and protect your brand:

1.) Identify Key Areas of Risk for Your Company. Map your company’s supply chain to focus resources where they will deliver a competitive edge. You can’t boil the ocean! Identify the likely areas of risk for your business and develop strategies around these focus areas. The increased complexity in global supply chains makes it tough to compete without technology on your side. Spend time testing and learning about affordable solutions. Be sure to consider options that give you supply chain transparency, while ensuring your data is protected and kept confidential

2.) Don’t Let Perfect Be the Enemy of Good – Start Today. Mapping your supply chain to ensure forced labor prevention can seem like an overwhelming task, so start small. Take a few steps each day and focus energy where you find obvious risk. Take a team approach, engaging with representatives across your business. This is a big, important initiative. No one person can do it alone.

3.) Get Help from Trusted Advisors. Forced labor prevention definitely requires “black belt” compliance skills. Getting help from trusted advisors like international Customs brokers, compliance consultants and Customs attorneys can help get you started in outlining a project plan and creating a road map toward measurable progress.

Making forced labor prevention a priority

Forced labor prevention is a complex issue that is not going away. In fact, CBP is turning up the heat on enforcement efforts. Leveraging the strategies outlined is a smart first step toward ensuring your supply chain is free of forced labor. We hope our overview makes your journey into 2024 a little easier. If you’d like to discuss this in more detail, reach out to Dimerco Express Group to start a conversation.