Uyghur Forced Labor Prevention Act

I write to update you on the Uyghur Forced Labor Prevention Act (the UFLPA), signed into law by President Biden in December, and its impact on the collegiate apparel market. As you know, this law was enacted by the US Congress, with broad bipartisan support, to address the forced labor crisis in the Xinjiang Uyghur Autonomous Region of China (XUAR) resulting from the Chinese government’s campaign of repression against the region’s Uyghur ethnic minority, including the widespread use of forced labor.
 
The UFLPA is an extraordinarily far-reaching trade law. It is intended to exclude from importation into the United States all goods, of any kind, that may be tainted by use of Uyghur forced labor in their production. The law specifically bars all products with any content from the XUAR—e.g., clothing made with cotton grown in the region and solar panels manufactured using polysilicon from the region—and all products made by companies that have participated in any Chinese government programs known to use Uyghur forced labor.
 
All such products are now, by law, presumed to have been made with forced labor and, therefore, cannot enter the US. Exceptions will only be granted if the importer can prove “by clear and convincing evidence” that no forced labor was used in the relevant product’s manufacture. This is a very high evidentiary standard that is likely to be met only in rare cases.
 
The law affects a vast number of brands across all product categories, including virtually all apparel brands. This of course includes every collegiate licensee that sells cotton clothing. Licensees will have to be able to demonstrate to government regulators that the cotton they are using is not from the XUAR.
 
There are several aspects of the law and its implementation that I want to note:

1. The actions the new federal law requires of university licensees and other brands that import cotton garments are, in essence, the same steps the WRC has advised licensees to take since July of 2020. The purpose of the WRC’s guidance to licensees was to keep forced-labor-made goods out of the university apparel market, as already required by university codes of conduct. Now, any licensee that has not already removed XUAR content from its supply chain must do so as a matter of US law, as well as university standards. This means, in effect, that the forced labor provisions of university labor codes, as they pertain to Uyghur forced labor, will now be actively enforced by the US government.


2. The law will affect not only products with content from the XUAR; it will also affect many products that have no such content but, instead, have been made elsewhere in China, in part or in whole, by corporations that are involved in Chinese government programs using Uyghur forced labor. The law requires the US government to make a list of all such companies and to bar from importation products that the listed companies helped to manufacture. It remains to be seen how wide a net will be cast in the creation of this list, but there are major Chinese corporations, including producers of cotton fabric and yarn, that may be listed, and the impact could be quite broad. Depending on how the legislation is interpreted, this provision, as it affects university licensees, may place a broader list of companies off limits than those identified in the WRC’s guidance. We expect that these lists will be made public, and we will share them with universities and licensees as they become available.


3. While imports of apparel made with XUAR cotton have been restricted since the end of 2020, under a prior administrative action by US Customs and Border Protection (CBP), the UFLPA is far broader in scope, and we anticipate a much more energetic enforcement effort. This will likely include proactive work by CBP to map apparel supply chains and to identify, as comprehensively as possible, all shipments of garments containing cotton from the XUAR.

The WRC is closely monitoring the implementation of the UFLPA, which will take full effect in June of 2022. We will update you on developments in implementation and enforcement of the law that may affect the university market.

As always, please let us know if you have questions about this information.