Combatting illicit trade in the textile industry: Homeland Security’s new strategy

In recent months, it’s been reported that at least 14 textile plants have closed in the US, partly due to predatory trade practices. To crack down on such issues, on April 5, the US Department of Homeland Security (DHS) announced an updated strategy for the enforcement of illicit trade targeting the textile industry.

The new, comprehensive strategy aims to tighten enforcement efforts, increase compliance audits, and expand the Uyghur Forced Labor Prevention Act (UFLPA) Entity List. Critical elements of this new approach include:

• Improved screening of low-value shipments. Since textile products account for a significant portion of low-value imports, DHS and US Customs and Border Protection (CBP) will enhance screening procedures for Section 321 shipments, commonly known as “de minimis.” This includes laboratory and isotopic testing to identify textiles and UFLPA violations as well as operational enforcement measures.
• Country-of-origin physical inspections. CBP, in collaboration with Homeland Security Investigations (HSI), will conduct physical inspections of cargo to ensure compliance. These inspections will involve isotopic testing to identify the origin of materials, in-depth reviews of documentation, and potential criminal investigations or civil penalties for suspected violations.
• Expansion of custom audits. DHS personnel will conduct audits and textile verification team visits at high-risk facilities in foreign countries, particularly those covered by trade agreements like the US-Mexico-Canada Agreement and the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR).
• Stakeholder education. DHS plans to partner with industry stakeholders, such as trade associations, to provide compliance education and enforcement requirements.
• Expansion of the UFLPA Entity List. Fulfilling requests from industry leaders and legislators, the DHS added 26 China-based textile companies to the UFLPA Entity List, effectively prohibiting imports connected to those suppliers beginning May 17, 2024. Most of the added entities—cotton traders and warehouse facilities—operate outside of the Xinjiang region. According to the Forced Labor Enforcement Task Force (FLETF), 21 of the entities source and sell cotton from Xinjiang on the wholesale market, and the other five source cotton from Xinjiang.

This enhanced strategy aims to address concerns about predatory trade practices, forced labor, and potential customs “loopholes” that may undermine the US domestic textile industry. With the textile industry accounting for over 500,000 jobs in the US and millions more across the western hemisphere, DHS is determined to close any gaps that could facilitate illicit trade activities.

DHS asserts that this strategy “will serve as the blueprint for future strengthened enforcement efforts,” suggesting that similar measures may be extended to other industries vulnerable to forced labor and customs violations.

For further insights and background, read US considers closing potential UFLPA ‘Loophole’ by increasing reporting requirements for low-value shipments and Understanding the Uyghur Forced Labor Prevention Act (UFLPA) by Jim Yarbrough.

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