Last month, the Department of Homeland Security (DHS) raised the compliance stakes for U.S. importers, adding 37 new entities in Asia to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List. The Jan. 14 move, which bans those entities’ products from entering the U.S., was the largest single expansion of the list since UFLPA came into effect in 2022.
Altana’s analysis of the world’s largest repository of global supply chain data reveals that as many as 18,210 companies across the world, including 2,223 in the U.S., are exposed to the new entities in their supply chains. Two-thirds of U.S. companies affected by recent entity listings are in the retail and apparel sectors, and DHS has identified cotton as a priority sector for UFLPA enforcement. Cotton from Xinjiang amounts to more than 90% of Chinese production and roughly 20% of global production. Meanwhile, the Trump administration is likely to add more entities to the list.
With a few keystrokes, Altana customers immediately identify goods likely to include content from one of the new entities and are thereby potentially liable under the UFLPA.
Of the 37 new entities on the list, 26 are in the cotton sector. One of those 26 is Huafu Fashion Co., Ltd., a cotton textile manufacturer that supplies major name-brand western retail and apparel brands. The other 25 cotton entities are Huafu subsidiaries. The presence of any Huafu subsidiary anywhere in a business’s supply chain now risks product shipments being detained and delayed at the U.S. border.
The new additions newly implicate at least 500 companies across the world that had no previous exposure to forced labor, according to Altana’s analysis. Those companies span industries from solar to fashion and geographies from Germany to Taiwan, but the products they sell are made from minerals and textiles sourced from Xinjiang.
Altana’s platform also identifies these entities’ subsidiaries, shareholders, and other information, potentially revealing more at-risk links in a company’s supply chain.
The consequences of shipping affected products into the U.S. are severe: In two years, U.S. Customs and Border Protection has denied close to $1 billion in imports for alleged violation of UFLPA, out of a total of $3.68 billion in shipments reviewed.
To remain in compliance with the forced labor law, businesses’ trade and compliance leaders should immediately ascertain:
- Are these newly added entities present in our products’ value chains?
- Are we thereby risking fines, detentions, and reputational harm?
- Will we need to spend hundreds of hours mapping our supply chain to verify that we aren’t sourcing from these 37 entities specifically or from suppliers linked to Xinjiang broadly?
- Is it even possible to keep sourcing from China without risking millions of dollars of detention costs?
Altana is the shared source of truth for the global supply chain
Businesses need visibility into their products’ full value chains to prove they aren’t sourcing materials or components from Xinjiang and document their compliance with UFLPA. But manual mapping, scraped data, surveys, and other existing methods are expensive, time-consuming, and frequently ineffective.
Nor do they provide a platform for companies to collaborate directly with customs authorities or partners up and down their supply chains.
Altana alleviates these pain points by enabling businesses to:
- Build their system of record in Altana by illuminating their product value chains within the largest set of supply chain data and curating their trusted network through on-platform collaboration with suppliers.
- Dynamically manage exposure to UFLPA and other risks within their network.
- Collaborate directly with regulators on the platform to submit products for pre-clearance to avoid delays at the border.
Book a meeting with our team of experts to see whether your business’s Product Network stands up to UFLPA’s new entity additions.
