On August 19, the U.S. Department of Homeland Security (DHS) published its annual report to Congress outlining its Uyghur Forced Labor Prevention Act (UFLPA) enforcement strategy.
Annual Report to Congress Expands High-Priority Sectors, Cites Exiger Advisory Member's Research
In the report, DHS expanded the list of high-priority sectors subject to UFLPA enforcement to include steel, copper, lithium, caustic soda, and jujubes/red dates. These additions will guide U.S. Customs and Border Protection’s (CBP) enforcement activities and inform future updates to the UFLPA Entity List.
The report extensively cites Exiger Advisory Council member Dr. Laura Murphy’s critical research into forced labor risks across these sectors.
Dr. Murphy warns: "Companies across industries must urgently map and monitor these high-risk segments to ensure compliance, protect Uyghur rights–and global supply chains."
Forced Labor Risks in the Newly Prioritized Sectors
- Caustic soda from the Xinjiang Uyghur Autonomous Region (XUAR) accounts for 16% of China’s total production, with major producers Xinjiang Zhongtai Group and Xinjiang Tianye Group both included on the UFLPA Entity List.
- Copper is included in the XUAR’s 14th Five-Year Plan for economic development, with major producers such as Xinjiang Nonferrous Metals Industry Group and Zijin Mining Group also appearing on the Entity List.
- Jujubes (or red dates) from the XUAR account for 20% of the world’s production, with significant amounts of production traced to the OFAC-sanctioned Xinjiang Production and Construction Corps (XPCC).
- Lithium production in the XUAR has recently expanded and is highlighted in the XUAR Mineral Resources Master Plan (2021–2025). Major lithium producers include Xinjiang Nonferrous and Zhicun Lithium.
- Steel development is outlined as a priority under multiple state planning documents and the XUAR is one of only three regions in China producing ultra-low carbon steel, with major producers including the Entity Listed Baowu Group.
Key Takeaways
- The newly prioritized sectors pose significant forced labor risks for global supply chains.
- The five new priority enforcement sectors are in addition to the previously announced enforcement sectors: cotton, tomatoes, polysilicon, aluminum, polyvinyl chloride (PVC), and seafood. Combined, these restrictions will increase the compliance risks for global supply chains.
- The report demonstrates a continued focus on enforcing the UFLPA across an array of commodities and sectors.
- Additional commodities with substantial ties to forced labor risk may be subject to future enforcement, including Titanium (12% of global titanium sponge is produced in the XUAR), Beryllium (the XUAR produces 50% of China’s total output), and Magnesium (several XUAR-based magnesium companies are already on the Entity List). Adding these commodities would eliminate several channels through which goods tainted with forced labor may enter U.S. markets.
