US announces largest expansion of UFLPA entity list to date

On January 14, the US Department of Homeland Security added 37 more Chinese companies to the import blacklist under the Uyghur Forced Labor Prevention Act (UFLPA Entity List).

• All firms are accused of employing forced labor directly or sourcing products made through forced labor.

The latest expansion, the largest to date, brings the total number of companies on the list to 144.

• Those on the list and their downstream customers are effectively barred from exporting to the US.

The move targets firms in the mining, solar, and textiles industries. Newly added firms include:

• Mining giant Zijing Mining Group
• A Jiangsu-based subsidiary of JA Solar, the world’s third-largest solar module manufacturer 
• Shuangliang Group, Hongyuan Green Energy, and Jiangsu Meike Solar Technology – three of the world’s largest solar wafer manufacturers
• 26 firms in the cotton textile industry, most notably Huafu Fashion, among the world’s largest 
• Xinjiang Energy, a major state-owned energy company

Some context: Though its dominance has waned in recent years, Xinjiang remains the world's largest production hub for polysilicon – the key raw material for solar modules – accounting for around 30% of global supply.

• Driven partly by the UFLPA, Chinese polysilicon manufacturers have significantly expanded production outside Xinjiang in recent years, with major projects underway in Inner Mongolia, Sichuan, and Qinghai.
• However, avoiding Xinjiang-made polysilicon remains a significant challenge for downstream producers.

Get smart: The UFLPA has had far less economic impact compared to other US government restrictions, like tariffs and export controls.

• Apart from the textile firms, the updated list is unlikely to significantly affect most of the recently added companies.
• Still, its ongoing expansion heightens the risk of multinationals getting caught up in Xinjiang-related compliance issues and scandals going forward.