The U.S. photovoltaic (PV) industry, solar module suppliers, manufacturers, and renewable energy developers are facing new regulatory challenges with the implementation of new legislation which has a significant impact on such imports. Among the most significant is the Uyghur Forced Labor Prevention Act, Pub. L. No. 117-78, 135 Stat. 1525 (2021) (“UFLPA”), whose provisions became fully effective on June 21, 2022.
In recent years, a wide array of trade actions pursued by the United States, foreign and domestic policies of the United States and China, reputational risks, and supply chain breakdowns are driving a trend of more and more manufacturing moving from Asia to Mexico. The Biden Administration has made no secret of its desire to encourage U.S. manufacturers and their component suppliers to move production from China to Mexico.[i]
Continue Reading The Trend of Production Moving from China to Mexico – Regulatory and Practical Considerations: Zai Jian Zhongguo, Bienvenidos a México
If your company is like many, your board of directors may be demanding that you put more effort into environmental, social, and governance issues, which have become known by the now-ubiquitous acronym “ESG.” Those demands don’t come from nowhere: consumers are demanding transparency and social responsibility. In particular, if your company does business internationally, regulators are focused on international social justice issues (such as the use of forced labor) more than ever.
Continue Reading Does Your Trade Policy Support Your Company’s Values?
Companies are putting forth more effort, thought, commitment, and resources into environmental, social, and corporate governance (ESG) considerations across their business lines. The focus of ESG has primarily centered around climate change and sustainability, but the “S” in ESG is becoming increasingly important to consumers and other stakeholders. As global corporate citizens become more vocal about asserting their identity and values, it is critical to think about how their global trade and compliance policies and supply chains reflect those values. Issues like forced labor in the supply chain, third party diligence, and how to build an ethical culture are part and parcel of a strong compliance program. But these issues also present opportunities for companies to reflect their values in a fundamental way and speak to what consumers are demanding with their dollars.
Continue Reading ESG, Global Trade, and Forced Labor: Aligning Compliance with Company Values
This is the second of three articles on the Solar Industry and Forced Labor. Here we focus on interactions with solar module suppliers. Our first article in the series focused on regulations in this area, and our next will focus on investors and their requirements.
Continue Reading Clean Energy’s Messy Problem II: The Solar Industry, I͟t͟s͟ S͟u͟p͟p͟l͟i͟e͟r͟s, and the Complex Task of Combatting Forced Labor
This is the first of three articles on the Solar Industry and Forced Labor. Here we focus on regulation. Articles in the coming weeks will focus on issues facing importers and their suppliers, and on investors and their requirements.
Continue Reading Clean Energy’s Messy Problem: The Solar Industry, the U.S. Government, and the Complex Task of Combatting Forced Labor
- U.S. Customs halts the import of silica-based products from made by Hoshine Silicon Industry Co. because the products are suspected of being produced using forced labor.
- For future imports of solar energy equipment sourced from Xinjiang, China, the United States may use Withhold Release Orders (WROs) to block entry into the United States if there is reasonable suspicion of forced labor in the supply chain.
- The renewables industry is working together and with regulators to find ways to certify its supply chains are free of forced labor.
On January 13, 2021, U.S. Customs and Border Protection (CBP) issued a Withhold Release Order (WRO) on cotton and tomato products produced by entities operating in Xinjiang, China. The order is based on information that indicates the use of forced labor in the production of the goods. If you are sourcing these products from the Xinjiang region, you may want to consider proactive compliance steps to mitigate your risk and prevent disruption in your supply chain. …
Continue Reading CBP Stops More Imports Under Forced Labor Rules (Cotton a Jam, Part II)
On December 2, 2020, U.S. Customs and Border Protection issued an order preventing certain imported cotton products from China from being released to the importer. The products were made by Xinjian Production and Construction Corp. (XPCC). The order is based on information that indicates the use of forced labor in the production of the goods. …
Continue Reading Cotton a Jam: CBP Withholds Cotton Product Shipments Under Forced Labor Rules
One point all can likely agree on in these divisive times is that the Trump Administration’s international trade policy has been aggressive. Over the past four years, we have been clinging to our seats on the rollercoaster ride with some pretty challenging peaks and valleys:
- Section 301 tariffs on over $370 billion worth of imports from China, under which over $68 billion in total duties have been assessed;
- Replacement of NAFTA with the United States-Mexico-Canada Agreement (USMCA);
- Withdrawal from the Trans Pacific Partnership (TPP); and
- Imposition of Section 232 steel and aluminum tariffs, under which over $9 billion in total duties have been assessed.
Is your company in a high-risk zone? Does it have the following risk characteristics?
✓ Your company imports more than $10 million of goods.
✓ You are mid-market: between $50 million and $2 billion in annual turnover.
✓ Your company has experienced higher than average growth in revenues, personnel, or imports over the past 2 – 10 years.
If your company fits this profile, you may be at an elevated risk of customs violations. Many companies in this high-risk zone have outgrown their customs compliance function. Without knowing it, they may be creating violations and, since the statute of limitations is five years, they may not know about the violations until the government comes knocking on their door years after the fact.
Continue Reading Sick without Symptoms: How Multi-Million Dollar Customs Issues are Ailing U.S. Companies Without Warning