DHS Undersecretary Says More UFLPA Entity List Adds Coming Soon

Silvers was testifying at a July 11 hearing called "Corporate Complicity: Subsidizing the People's Republic of China's Human Rights Violations." He called the administration's implementation of UFLPA "speedy, strong and surgical," though he said DHS does face challenges, such as the need for more money for both FLETF and CBP, and the risk from de minimis shipments.

CECC Chair Rep. Chris Smith, R-N.J., told Silvers that the committee recently "heard some very disturbing testimony about the de minimis loophole," and asked him what Congress should do to close that loophole.

Silvers said he shared Smith's concerns about the effect the de minimis exception has on CBP's ability to detect the entry of goods made with forced labor. But he quickly added, "[t]o be clear, the UFLPA does apply to de minimis shipments," and said CBP does apply risk analysis for forced labor to those packages, even though the fact that those shipments offer less data does make it harder.

Silvers said the challenge that 700 million de minimis packages presents to CBP is not just about forced labor; it's also difficult to stop narcotics shipments and counterfeit goods.

Silvers told the members of Congress that the government has short, medium and long-term strategies to improve enforcement in the de minimis environment. In the short term, he said, CBP is procuring software that will improve targeting. In the medium term, it's going to promulgate regulations that will make changes to the data required from shippers. And, in the long term, the 21st Century Customs Framework legislation "will have a lot of positive impact on our ability to enforce UFLPA, including in de minimis."

In a hallway interview outside the hearing room, Silvers said about that legislation: "It's really important that we have as much enhanced data availability across the system, given the complexity of supply chains, and the increasing complexity of Customs and Border Protection's important enforcement work. That's a forced labor enforcement issue, it's also an issue for the general facilitation of trade in an era of supply chain disruptions. It's an important issue to counter the importation of fentanyl, to counter the importation of counterfeit products, as well as forced labor products."

When asked directly if DHS thinks fuller data is enough to improve enforcement in de minimis, or if changes to eligibility are also needed, Silvers said, "We want to have discussions with Congress about what we and they see as effective solutions to address all the various kinds of considerations in this complex area, and those are considerations around the importance of our enforcement efforts, the importance of facilitating trade, and of finding the right way to approach those issues."

Smith also asked Silvers his view on the importation of cobalt mined with child labor in the Democratic Republic of the Congo, which he said is sent to China, refined, and put into electric vehicles. Smith told Silvers he is seeing Teslas on the road in greater numbers, particularly around Washington, D.C. "Every time I see one," he said, he thinks: "'That was built on the back of some African child or some African adult that may be dead now.'"

Silvers said, "We are going to enforce our forced labor laws wherever they lead, no industry or supply chain is off the table."

Rep. Jennifer Wexton, D-Va., asked Silvers how CBP is able to detect forced labor in small packages, and asked if there are spot checks at express carriers.

He said CBP uses supply chain mapping and referrals from non-governmental organizations, which he said "so often are our ears and eyes on things. Their activities have led to numerous enforcement actions."

Wexton encouraged FLETF to look for companies outside Xinjiang that employ transferred Uyghurs through state-run "poverty alleviation" programs.

"We are only accelerating in our efforts, and I think that message has been received loud and clear by importers," he said. In his opening remarks, Silvers said he believes importers are taking UFLPA seriously, both from anecdotal reports and from trade data companies such as Altana AI and Sayari. Both found that imports that include inputs from companies that are suspected of having Xinjiang links are down about 40% to 50% in the first nine months since the law entered into force.

After Silvers, a panel of activists and analysts spoke about the self-censorship U.S. firms engage in to keep the Chinese government happy. Isaac Stone Fish -- whose firm Strategy Risks analyzes open source data for firms to determine links to sanctioned entities, or Xinjiang -- said: "American corporations have different interests and incentives than a lot of people in this building." Fish said Congress should pass legislation to require publicly traded companies to disclose their exposure to China. He also said that he knows of companies that have reduced their investment in China due to geopolitical tension, but they don't want to talk about it in the media. He wishes they would. "People in the business community need to know there is a way to reduce your reliance on China and still make money," he said.

Panelist Shi Minglei said that political prisoners in Hunan province are forced to work 11 or 12 hours a day making gloves, including those sold at Home Depot and on Amazon under the Milwaukee Tool brand, and are paid next to nothing. Her husband is a prisoner there, but she has not been able to talk directly with him during his sentence. She testified that she has talked to other human rights activists whose sentences ended at the same prison.

A nonprofit newsroom in Wisconsin wrote about the allegations earlier this year; Smith and CECC Co-Chair Sen. Jeff Merkley, D-Ore., cited the story in a letter to Milwaukee Tool that Smith disclosed during the hearing.

"We understand that Milwaukee Tool may have strongly worded policies against the use of forced labor, as do most every company with global supply chains, but the evidence in this case is very compelling,” they wrote. They also asked if the company ended its relationship with Shanghai Select Safety Products, the contract manufacturer that activists say operates in the prison.

Milwaukee Tool responded to the allegations last December (see 2301120053), when they were first public, and said: "A thorough investigation of these claims was conducted, and we have found no evidence to support the claims being made."

Smith said he would invite Milwaukee Tool to testify at a future hearing, along with Nike and the NBA. Enes Kanter Freedom, a former NBA player who wore shoes on the court with human rights messages targeted at Tibet and Uyghurs, says no team wanted to hire him after his activism. During his appearance at the hearing, he said, "Everybody knows about the slave labor in Nike products."

Nike did not respond to a request for comment.