Since the Uyghur Forced Labor Prevention Act came into effect in June 2022, the conversation around trade compliance, particularly in relation to China’s Xinjiang region, has shifted in ways that, frankly, not all businesses anticipated. The law establishes a rebuttable presumption — in plain terms, it assumes that goods made wholly or in part in Xinjiang involve forced labor. And this is no small presumption. For importers, the burden of proof has flipped. It’s no longer sufficient to assert compliance or to rely on prior assurances from suppliers. What’s required now is, as the statute puts it, clear and convincing evidence that no forced labor was involved at any stage of production.
That phrase — clear and convincing — carries weight. It sets a high bar, and firms have been grappling with what, in practice, it means to meet it. Customs and Border Protection (CBP) officers expect documentation that is robust, detailed, and, crucially, verifiable. That much is understood. But the paths companies are taking to assemble that documentation vary considerably. Some firms moved quickly, investing in third-party audits, mapping supply chains well beyond Tier 1 suppliers, sometimes down to raw material inputs. Others, perhaps slower to react, are still building out systems, still figuring out where the weak points are. There’s been, if we’re honest, a degree of uncertainty in many quarters about how best to demonstrate compliance without incurring prohibitive costs or, worse, disrupting critical supply chains altogether.
The role of trade data has grown in importance. Open-source trade databases, shipment records, customs filings — these tools are increasingly part of the compliance toolkit. But relying on these sources isn’t without its challenges. Data completeness is inconsistent. Records can lag behind actual movements of goods. And interpreting trade flows in a way that provides the level of assurance regulators demand is not, despite what some technology vendors might claim, as straightforward as feeding data into a dashboard and waiting for a green light. Human judgment still plays a role, and that judgment is often made under conditions of imperfect information.
There’s also the question of audits. Independent verification has become, for many companies, the go-to response. But even here, complexities abound. Access to facilities in Xinjiang is, at best, heavily restricted. Auditors face limits on what they can see, who they can interview, how freely they can operate. This inevitably affects the confidence level that can be assigned to their findings. And yet — businesses are expected to provide evidence that can withstand scrutiny. It’s a tension that many firms, and their compliance officers in particular, are still struggling to resolve. Some have opted to shift sourcing entirely to regions seen as lower-risk, though this, too, brings its own costs and complications. Others continue to engage with suppliers linked to Xinjiang, albeit with enhanced oversight, more paperwork, more caution.
Procurement and logistics teams — they’re adapting, but not always at the same pace. Distributors, freight forwarders, and other intermediaries are being drawn deeper into the compliance net. Customs-compliance officers are finding that due-diligence processes need to be formalised, and that casual or informal supplier declarations no longer suffice. Conversations that might once have been left to procurement specialists are now involving legal teams, external counsel, and, increasingly, senior management. There’s a recognition, or at least there should be, that the reputational risks associated with non-compliance can be as damaging as any regulatory penalties.
And while companies work to fortify their compliance processes, there’s a growing awareness — sometimes voiced quietly, sometimes not — of the broader trade and political implications. The UFLPA doesn’t operate in a vacuum. It reflects, and contributes to, shifting dynamics in US-China economic relations. Some firms worry about being caught between conflicting regulatory regimes, or about inadvertent entanglement in geopolitical tensions. These are not abstract concerns. They are playing out in boardrooms, in risk committee meetings, in the day-to-day decisions of those tasked with keeping goods moving across borders.
The notion of a due-diligence questionnaire, which on the surface might seem a minor administrative tool, has taken on new significance. Questions are becoming more probing. They delve into sub-tier sourcing, labor conditions, facility audits, material origins — far more than a perfunctory supplier declaration. But designing these tools effectively, ensuring that they elicit meaningful responses rather than boilerplate assurances, is itself an evolving task. It requires not just legal input, but an understanding of how suppliers operate, what information they can reasonably provide, and where the real risks lie. And even then, the responses must be evaluated critically. Simply collecting information is no longer enough. It must be assessed, tested where possible, and incorporated into a broader risk management framework.
There’s no universal template for navigating these challenges. What’s emerging is a patchwork of practices — some better developed, some still maturing — as companies adapt to the new regulatory environment. Some have found that their existing systems, with modifications, are adequate. Others have been forced into wholesale redesigns of their compliance architectures. Much depends on the complexity of the supply chain, the nature of the goods, the regions involved. And, too, on the risk appetite of the firm. Some will take a more cautious route, preferring over-compliance to any risk of disruption. Others will balance compliance obligations with commercial imperatives, accepting a degree of uncertainty where they judge the risks to be manageable.