Since the enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) began in 2022, U.S. Customs and Border Protection (CBP) has significantly increased its scrutiny of imports. So far, more than 15,000 shipments have been detained under the UFLPA, with a cumulative value nearing $4 billion. Importantly, enforcement isn’t limited to textiles; rather, it spans categories including electronics, automotive parts, solar panels and aluminum.
For retailers and brands, this heightened enforcement underscores the urgent need to identify and eliminate forced labor risks across every tier of the supply chain. What makes compliance particularly difficult is the fragmented and opaque nature of global sourcing. Retailers often have visibility into direct suppliers, but the greatest risk under the UFLPA usually lies further downstream among subcontractors, raw material sources and affiliated entities that don’t appear in standard purchase records or customs documentation.
Beyond the First Tier: The Real Risk Zone
Many of today’s supply chains involve hundreds (or even thousands) of suppliers distributed across continents. In this environment, connections to sanctioned regions or entities can be indirect and difficult to trace. Risk is often embedded in subcontracted processes, shared factory ownership, labor transfer programs or regional partnerships that are invisible without deep investigation.
To address this, U.S. regulators are increasingly demanding comprehensive documentation that proves a clean chain of custody, not just at the port of import but across the entire sourcing journey. Retailers relying solely on questionnaires or static audits are falling short of the new standards. CBP uses sophisticated open-source intelligence and trade data to trace links to prohibited regions, and importers are expected to match or exceed that diligence.
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Building a Traceable, Auditable Supply Chain
The key to compliance is building a dynamic, evidence-based due diligence process. This starts with mapping the entire supply chain — not just Tier 1 vendors, but every facility and sub-supplier involved in production, down to raw material sources.
Modern traceability platforms now enable retailers to:
- Map supplier relationships to the Nth tier using centralized systems that connect factories, vendors, and materials.
- Digitize the chain-of-custody process by collecting, validating and storing compliance documents, including bill of material and origin certificates.
- Automate red flag detection with AI that can identify blacklisted suppliers, flagged regions or incomplete documentation in real time.
- Monitor compliance exceptions proactively through smart alerts and real-time dashboards, giving sourcing and compliance teams immediate visibility into issues before orders are placed.
Embedding Intelligence Across the Workflow
One of the most important shifts in UFLPA compliance is the need to move intelligence out of legal silos and embed it directly into sourcing workflows. If a red flag only reaches the compliance team after a purchase order is issued, it’s too late. Instead, systems must be designed so that potential issues are flagged automatically early in the decision making process, when suppliers are vetted, selected and onboarded.
Some platforms integrate third-party risk data with sourcing and procurement systems to deliver real-time insights. For example, a facility shares ownership with a company in Xinjiang or has participated in government labor transfer programs; these platforms can detect these indirect ties with forced labor before any transaction occurs.
Enhancing Oversight
Traditional audits alone are no longer enough, but they still play a role in a multi-layered due diligence strategy. Leading compliance frameworks now support:
- Mobile-enabled, digitized audits that let inspectors capture data, including photos and videos, on-site in real time.
- Configurable audit templates to tailor checks to specific risks or regulatory requirements.
- Integration with third-party databases, such as amfori BSCI or WRAP, to streamline access to verified audit reports.
- Automated alerts for audit exceptions, helping compliance teams react quickly to recurring issues or new violations.
Critically, these tools must be easy to use, configurable and connected across the enterprise, not limited to a few stakeholders or manual reporting processes.
Accountability Through Data
Enforcement expectations continue to evolve. Regulators are not just looking for companies to say they’ve done their due diligence; they expect clear, verifiable documentation that can be produced quickly under audit or in the event of a shipment detention. This includes:
- Verified chain-of-custody documentation
- Sub-tier supplier declarations
- Audit records
- Proof of risk assessments and corrective action plans
Retailers must also think beyond labor. Increasingly, ethical sourcing is tied to environmental compliance as well. Carbon tracking and sustainability metrics are becoming essential parts of responsible supply chains. Solutions now exist to help companies:
- Collect energy usage and emissions data from suppliers automatically
- Calculate Scope 3 emissions using established industry frameworks
- Track corrective actions with suppliers working to reduce environmental impact
- Monitor progress on sustainability initiatives via integrated dashboards
Ethical Sourcing is the New Standard
Forced labor is not a distant policy debate, it is a human rights crisis with real victims. As consumer expectations, regulatory demands and brand risk all converge, ethical sourcing is longer optional. It’s the foundation of modern retail.
For companies to lead responsibly, they must invest in systems that provide complete transparency across geographies, tiers and materials. They must use real-time intelligence to guide decisions, not just react after problems emerge. And they must ensure compliance is baked into every step of the sourcing process, from vendor onboarding to final delivery.
The future of ethical sourcing starts with knowing more earlier and more deeply, and with the ability to prove it.
Eric Linxwiler is SVP of TradeBeyond. He has over 30 years of experience in enterprise software and cloud-based platform companies, with a specialty in supply chain optimization and workflow management. Contact him at eric.linxwiler@tradebeyond.com.
