Challenge
In 2023, the Uyghur Forced Labor Prevention Act (UFLPA) created significant compliance challenges for a major global automotive manufacturer. With only seven days of safety stock in inventory, the company would have to halt some production if imported parts were detained at the border under suspicion of violating the law.
The manufacturer’s product value chains comprise thousands of components, and the company needed to screen hundreds of Tier 1 suppliers across their complex value chains and trace the origins of the highest-risk materials, aluminum (identified by CBP as a priority sector for enforcement), and steel, plus critical electronic components. Its existing manual supplier verification processes were inadequate to meet the new regulatory demands. The company struggled to identify the origins of sub-components, particularly those from the Xinjiang Uyghur Autonomous Region. The risk of customs detentions and compliance failures posed a significant threat to the manufacturer’s continuity.
Solution
Seeking a strategic and scalable approach, the manufacturer partnered with Altana to transform its compliance operations. First, Altana screened an initial set of 80 Tier 1 suppliers and established a robust verification process. Altana's solution helped the company to gather compliance intelligence from its suppliers, enhanced visibility deep into multi-tier value chains, and enabled the company to source alternative suppliers.
A crucial element of the solution was the integration with the manufacturer's existing supplier documentation system. Altana's platform enabled the company to screen new suppliers against restricted party lists, including by searching name variations across multiple languages. The platform's custom intelligence gathering capability allowed the company to triage high-risk suppliers, and enabled it to trace the detailed origins of components.
Throughout the partnership, Altana has helped the manufacturer address specific compliance concerns and demonstrate due diligence. In one notable investigation, Altana worked directly with the manufacturer's team to disassemble components on-site to verify their origins. This approach entailed documenting company names, serial numbers, and part numbers, even for sub-components with limited identifying marks. By cross-referencing English and Chinese character variations, the team traced production origins of critical components.
Impact and Future
The partnership with Altana has transformed the manufacturer's compliance and risk management operations. That program has grown from a single worker to a dedicated team, and the company will soon expand its initial 80-supplier implementation to cover 900 Tier 1 suppliers. The manufacturer also plans to screen deeper into product value chains and enhance monitoring of its supplier base. These steps will ensure the company maintains robust compliance while supporting business continuity in an increasingly complex regulatory environment.
The manufacturer has developed essential capabilities to maintain compliance with the UFLPA and minimize risks of disruption to its supply chain. The manufacturer can now immediately screen its supplier network for potential connections when new companies are added to restricted party lists such as the Department of Homeland Security UFLPA Entity List,and take action to maintain compliance. The improved visibility into international supplier networks has enabled the company to trace the origins of components and identify suppliers connected to Xinjiang.
