By Edmund Xu and Robert Kim
January 25, 2023
A vermiculite mining and processing company based in the Xinjiang Uyghur Autonomous Region (XUAR) of China continued to export goods into the U.S. market months after the June 2022 enforcement of the Uyghur Forced Labor Prevention Act (UFLPA).
Reports of Xinjiang-origin products entering the U.S. — ranging from jujubes and cotton, to automobile parts — have led U.S. Customs and Border Protection (CBP) to assess UFLPA evasion techniques used by Chinese entities, and ways to better detect them at ports of entry.
Another Xinjiang product found to have been imported into the U.S. since the enforcement date of the UFLPA is vermiculite, a mineral with heat resistance and insulating properties that has a wide variety of commercial applications.
As recently as October 2022, Xinjiang Yuli Xinlong Vermiculite Co., Ltd. exported vermiculite to an American company in California. From 2017 to October 2022, the company purchased 8.9 million kilograms (8,900 metric tons) of vermiculite from Xinjiang Yuli, according to trade records reviewed by Kharon.
The U.S. produces approximately 100 million metric tons of vermiculite annually and imported 38-40,000 metric tons each year from 2019 to 2021, according to U.S. Geological Survey statistics. China supplied 24% of U.S. imports of vermiculite in 2014-2017, the most recent years for which data is available from USGS.
Indicators of Forced Labor
Xinjiang Yuli’s location and activities match several red flags listed by the U.S. government in its 2021 Xinjiang Supply Chain Business Advisory as indicators of forced labor risk.
According to Chinese media reports, in 2020 Xinjiang Yuli accepted workers through Chinese government sponsored labor transfers, a practice identified by the U.S. government as an involuntary and coercive relocation program targeting Muslim minority groups.
The Yuli Industrial Park where Xinjiang Yuli is located hosts a Vocational Education and Training Center (VETC), which are used by the Xinjiang regional government for “deradicalization” and “re-education” activities, according to a U.N. report. These training and re-education programs are indicators of forced labor, according to the 2021 U.S. business advisory, which also warns about companies located in industrial parks that host such facilities.
Omission of Xinjiang From Documentation
Import documentation for vermiculite shipments in 2022 appear to have omitted Xinjiang from the address field in bills of lading reviewed by Kharon, whereas in previous years Xinjiang was included in the address. This change is a practice of Chinese exporters that was recently noted by the U.S. Customs and Border Protection (CBP), where an official noted that “it has become normal operating procedure [for Chinese producers] to obfuscate the origin of goods from the XUAR.” According to the CBP official, these kinds of omissions make the work of CBP personnel at the port of entry “more difficult.”