Summary of CBP’s March 2023 Forced Labor Technical Expo
CBP held a Forced Labor Technical Expo from March 14-15, comprised of experts and service providers highlighting tools to utilize for supply chain transparency to comply with The Uyghur Forced Labor Prevention Act (UFLPA) and the general “reasonable care” obligations of U.S. importers. UFLPA was signed into law December 31, 2021, and seeks to prohibit imports of certain goods from China’s Xinjiang Uyghur Autonomous Region, where it has been reported that the Chinese government is using forced labor of Uyghur Muslims and other ethnic and religious minorities in detention camps and factories. For more information about the UFLPA, please see our previous blog articles here and here.
CBP Data Dashboard
CBP launched a UFLPA data dashboard where the trade community can now monitor forced labor enforcement by origin, commodity, CBP Center of Excellence and Expertise, and more. See the screenshot of the new dashboard below and note that the countries of export most targeted are NOT China, contrary to popular belief. This is partly due to the fact that most UFLPA enforcement to date has been on solar panels, which may include Chinese-origin raw materials but are generally further manufactured outside of China. Notably, CBP is actively tracking many different types of products across many different industries with raw materials that originate in China and that are further manufactured in other countries for forced labor enforcement.
Summary of Technologies Announced at the Expo
Below is a summary of the vast array of technologies discussed at the Expo, such as artificial intelligence (AI), machine learning (ML), and big data analytics to identify goods produced using forced labor. Along with other capabilities, this technology can analyze all available public and private data to identify patterns that indicate the possible use of forced labor which will facilitate compliance with the UFLPA and general “reasonable care” obligations.
AI – Supply Chain Mapping
- Altana Atlas platform is a dynamic, multi-tier map of the global supply chain that continuously updates and grows by learning from public and proprietary data. It reveals product origins and supplier networks and allows companies to fuse their data with the Atlas for unprecedented visibility of their entire supply chain without sharing proprietary data.
- Mesur.io’s Earthstream uses imaging, mapping, and science-based modeling, to help companies track the origin and movement of cotton, which is a particularly challenging product to trace because it is often further manufactured in multiple locations in multiple countries.
- Kharon focuses on risk management solutions, backed by proprietary research and data analytics.
- TrusTrace offers AI-based solutions for UFLPA trade compliance. They provide a digital supply chain custody system for enterprise-level companies with thousands of suppliers using an ecosystem approach to map and provide supply chain evidence.
- Sayari Analytics, LLC offers an SAS platform that allows for instant worldwide corporate transparency and identification of supply chain risks through parsing and matching data to watchlists.
- Exiger Government Solutions focuses on AI-powered research to provide enhanced supply chain visibility and identify and mitigate forced labor risk.
- Everstream Analytics matches supply chains to watchlists using open source and import/export records. The platform has a live interface with client ERP data, and continuous monitoring output is delivered through the platform.
- Assent Inc. is a data supply chain management company that provides a SaaS platform, managed services, including direct supplier engagement, enhanced screening using public domain data, and an Enhanced Supplier Screening service to fill in data gaps, using AI and human expertise.
- Deloitte Financial Advisory Services, LLP utilizes a Magnify feature to map the supply chain.
- FRDM maps and monitors supply chains with a focus on procurement.
- Senergy Technical Services (USA) LLC (STS) offers a supply chain mapping in a 3-step process involving defining the product to be traced, compiling a list of suppliers, and verifying the commercial link between suppliers and traceability of input and output at each stage of the supply chain.
Marking and Tagging
- Oritain developed a unique method of identifying the origin of products based on the naturally occurring chemical and physical properties in raw materials, such as minerals, fibers, and water. This method allows Oritain to determine the authenticity of products and ensure that they have been ethically sourced and produced without forced labor.
- TailorLux GmbH provides industrial marking solutions to ensure material authenticity for recycling, product protection, and digitization of bulk materials.
- Covisus offers a revolutionary tag-less track and trace solution called Vtag, which uses the intrinsic surface features of an item to uniquely identify it without any modifications. This provides covert and true item-level traceability and authentication without requiring any alterations to the item.
- Sourcemap Inc. provides a digital platform to trace products using GPS points and transaction tracking.
- Haelixa provides solutions to physically mark, trace, and authenticate textiles along the supply chain for transparency. Haelixa’s unique DNA marker is spread on the fiber at each stage, and a forensic test is conducted using yarn or fabric to verify the final garment. Well-known fashion brands and suppliers have implemented their solutions and sell “marked and traced by Haelixa” garments in retail stores.
- Applied DNA Sciences, Inc. (ADNAS) provides innovative supply chain traceability solutions for forced labor compliance, using DNA tagging, DNA genotyping, and isotope testing. They focus on nucleic acids and have developed a complete tracking system through their three pillars, with a particular emphasis on cotton supply chains.
- Flora Trade Inc. provides risk management solutions using forensic chemistry and data science. Flora Trace analyzes isotopes from soil and fertilizer to create an “origin fingerprint” of materials.
Risk Assessment and Training
- Verité is a nonprofit that has a risk assessment tool based on the International Labour Organization’s indicators of forced labor and includes a range of questions that are designed to identify potential risks at various stages of the worker recruitment process, from the initial recruitment to the placement of workers. In addition to its risk assessment tool, Verité provides training and capacity-building programs and supply chain mapping to help organizations identify and mitigate forced labor risks in their supply chains.
It is clear that all companies that import goods into the U.S. will have to be more pragmatic about their supply chains, but, what is not clear, is at what cost? Will solutions be available to companies of all sizes and budgets?
Forced labor compliance is NOT just about UFLPA compliance. The U.S. Department of Labor’s sweat and toil app makes clear that forced labor is a concern in MANY countries, not just China, and CBP similarly has made it clear that forced labor enforcement is going to be a priority trade initiative.
We will see increased scrutiny and enforcement of the UFLPA and forced labor prohibitions generally both for products imported into the United States and globally. Advanced technology like AI and machine learning are helpful to identify potential instances of forced labor in supply chains, but alone are not enough. Proactive supply chain vetting, due diligence, DNA tracking/tracing, and insistence upon a supply chain free of forced labor are our future – will your SME make it to this future? Diaz Trade Law can help you identify which, if any, technical products would be helpful to use to meet your “reasonable care” forced labor compliance obligations. Of course, no technical product, in and of itself, is sufficient to meet all an importer’s due diligence obligations – human resources will also be necessary to implement and interpret any technical tools.
Diaz Trade Law has significant experience in a broad range of import compliance matters including forced labor issues. For assistance with importer due diligence in relation to forced labor requirements; or for assistance in submitting documents to dispute the use of forced labor, contact our Customs and International trade law attorneys at [email protected] or call us at 305-456-3830.