Uyghur Forced Labor Prevention Act Will Affect Imported Solar Modules

The Act affects compliance obligations for any importer whose supply chain touches the Xinjiang Uyghur Autonomous Region in China.

The Uyghur Forced Labor Prevention Act (the “Act”) was adopted on December 23, 2021 and its import restrictions took effect on June 21, 2022. The Act’s purpose is to ban imports of solar modules produced through forced-labor practices in the Xinjiang Uyghur Autonomous Region (“XUAR”) of China. Under the Act, anything mined, produced, or manufactured in XUAR, or by certain entities affiliated with XUAR, is presumed the result of forced labor. Accordingly, companies with supply chains that touch XUAR should anticipate impacts on imported solar modules. This, in turn, may increase the cost of certain solar projects.

The Act specifically impacts the domestic solar energy industry by designating “polysilicon” a high-priority sector. Polysilicon is a key material for the manufacture of solar panels, and nearly half of the world’s polysilicon is produced in XUAR. The Act directs U.S. Customs and Border Patrol (“CBP”) to prioritize its enforcement of the import ban on polysilicon from XUAR.

Despite the Act’s intent to ban the importation of any products from XUAR, the Act includes a narrow exception. Importers may still import products, like polysilicon, from XUAR if:

• CBP determine the importer has engaged in due diligence (described below); and
• the importer shows by clear and convincing evidence the goods are not the product of forced labor.

The Act does not specify what evidence will meet the “clear and convincing” standard. However, the CBP has issued guidance (available here) on the subject. Required evidence includes:

• transportation documents;
• an affidavit from the provider of the product;
• daily manufacturing process reports;
• evidence regarding the importer’s anti-forced labor compliance programs; and
• any other relevant information that the importer believes may show that the imports are not subject to the ban.

Supply-chain issues continue to threaten domestic growth of the solar industry. We recently analyzed related tariffs, for instance in an article available here. Baird Holm attorneys have significant experience navigating all stages of renewable-energy development, including advising importers of record for solar modules and navigating negotiation of construction agreement terms regarding CBP compliance and tariffs under U.S. law.

We will continue to monitor these changing policies and provide updates as appropriate. Please do not hesitate to contact us if you have questions.