COAC Recommendations for Customs

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Sep. 19, 2023
By: Pietro N. Bianchi

The Commercial Customs Operations Advisory Committee (COAC) announced its September 2023 recommendations concerning the Uyghur Forced Labor Prevention Act (UFLPA). The COAC is a group of industry professionals that advises the Department of the Treasury and the Department of Homeland Security on the commercial operations of Customs and Border Protection (CBP), such as trade policies, programs, and enforcement.

The COAC recommended that CBP:

1. Continue to educate stakeholders about implementation and enforcement of UFLPA;

2.      Provide additional information to an importer when a shipment is stopped for a suspected UFLPA violation; and

3.      Engage in a solution for the use of FTZ's within or external to the initial port of import/entry to hold detained merchandise under UFLPA pending a decision.

COAC’s recommendations are aimed at alleviating the substantial burden importers face when a shipment is suspected of violating UFPLA. While UFLPA has been a hot topic in the trade community for some time now, many remain unaware of how difficult it is to overcome a detention (you can read more about it here, here, here, & here).

Currently, CBP will not identify the component and/or supplier suspected of violating UFLPA. Importers who receive a detention notice have 30 days to produce documents showing all business transactions related to the payment and transport of inputs, such as invoices, contracts, purchase orders, and proof of payments; demonstrating physically transfer, such as packing lists, bills of lading, and manifests; and verifying all parties involved in the sourcing, manufacture, manipulation, transportation, and/or export of the detained goods, down to the supplier of raw materials. The COAC states that identifying what is under suspicion of forced labor is a win-win. It will “allow the importer to focus efforts on supply chain mapping and information gathering and enable an efficient and focused submission of data needed to determine admissibility” while also allowing CBP to improve enforcement response time.

The COAC’s third recommendation addresses a recent announcement from Customs stating that while goods detained under UFLPA may still be moved and stored in a bonded warehouse pending resolution of the detention, they could no longer be moved and stored in an FTZ. COAC went so far as to state that “[i]f CBP is unable to adjust its position on the use of FTZ’s, CBP should provide legal justification for the decision.”

How Customs receives these recommendations and whether they have any impact on Customs’ decision-making remains to be seen.

If you have questions about UFLPA or best practices do not hesitate to contact an attorney at Barnes Richardson, & Colburn LLP.