As part of a continued effort to enforce the Uyghur Forced Labor Prevention Act (UFLPA) and to provide early warning to importers and their representatives that goods may have been produced in the Xinjian Uyghur Autonomous Region (XUAR), US Customs and Border Protection (CBP) ) will require businesses to provide a valid postal code for Chinese manufacturers from which they are importing goods when reporting via the Automated Commercial Environment (ACE) system beginning on March 8, 2023. The following Q&A will help your business understand the steps it needs to take to comply with the requirements:
Q. When does this requirement go into effect?
A CBP first announced this requirement in its Notional Development & Deployment Schedule for Automated Commercial Environment with a target deployment date of November 2022. (CBP Publication No. 2027-1022). However, on November 1, 2022, CBP announced that deployment was postponed until further notice to address concerns raised by impacted users. (CBP Bulletin No. 53838846). On January 26, 2023, CBP announced that the requirement would go into effect on March 18, 2023.
Q. What is the purpose of the requirement?
A As stated by CBP in its January 26, 2023 Uyghur Forced Labor Prevention Act Region Alert, the postal code requirement “will provide an early notification to importers and their representatives of goods that may have been produced in the [XUAR] and may be excluded from importation into the United States.”
Q. What applications in ACE are subject to the postal code requirements?
A A postal code is not required for all applications in ACE. Rather, ACE will require postal codes of manufacturers in (1) “Cargo Release” applications if the country of origin is reported as China, and (2) “Manufacturer Identification Code” applications if creating or updating a Manufacturer Identification Code with a city located in China.
Q. What happens if the provided postal code is invalid?
A A user that provides a postal code that is not a valid Chinese postal code will receive an error message.
Q. What happens if the provided postal code is from the XUAR?
A A user that provides a postal code that is from the XUAR will receive a warning message. This will alert importers that the rebuttable presumption of forced labor established under the UFLPA is likely to apply to the goods, and that shipments from that manufacturer could be withheld. (For more information regarding the rebuttal presumption under the UFLPA, see our blog post here.) CBP states that “importers may request an exception to the rebuttable presumption from CBP during a detention, after an exclusion, or during the seizure process” as on page 9 of the UFLPA Operational Guidance for Importers, which is available here.
Q. What should your business do to prepare?
A CBP will not be providing a list of valid Chinese postal codes or a list of postal codes in the XUAR because “importers have an obligation to conduct due diligence on their supply chain.” (UFLPA Region Alert and Postal Code Requirements, Frequently Asked Questions, CBP Publication No. 3064-0323). It is therefore incumbent upon businesses to understand their entire supply chains–including the names and addresses of each of their manufacturers. Our team is here to assist you with that due diligence.