NU Borders’ BITE AI platform includes millions of worldwide trade transactions that are ingested, transformed and enriched with indicators, including entities from the Xinjiang Uyghur Autonomous Region (XUAR). Open-source research conducted by NGOs analyzing forced labor in the global supply chain indicated Chenguang Biotech Group Co., Ltd., was linked to forced labor in the XUAR. Upon analysis in BITE, our team focused on Chenguang Biotech Group Co., Ltd. trade with India, and showed 131 transactions to 15 Indian consignees. The total declared value of these shipments was over $55m.
Upon further investigation using BITE, 8 Indian companies were shown importing a product from Chenguang Biotech Group Co., Ltd., and subsequently shipping a variation of the product to the U.S., e.g., importing oleoresin paprika crude and exporting oleoresin paprika refined. This suggests a direct supply line for products shipped from Xinjiang, processed in India, and imported into the U.S., sometimes to well-known companies. Our analysis includes a downloadable list of all customs / trade transactions associated with this investigative report a link to which is located at the bottom of the article.
Customs and Border Protection continues to proactively screen and detain U.S. imports for commodities manufactured or associated with forced labor. In fact, between June 2022 and April 2023, CBP detained nearly $1 billion worth of goods with suspected ties to forced labor.
Although CBP and Homeland Security Investigations (HSI) have enforced forced labor statutes and regulations for decades, there has been a significant increase in enforcement actions since The Uyghur Forced Labor Prevention Act (UFLPA) was enacted on December 23, 2021.
In addition to CBP and HSI, there are several other U.S. agencies with equities and interests in forced labor enforcement. The Department of Homeland Security (DHS) chairs the Forced Labor Enforcement Task Force (FLETF), which has developed a U.S. government-wide strategy for supporting the enforcement of the prohibition on the importation of goods associated with forced labor in the People's Republic of China, especially from the Xinjiang Uyghur Autonomous Region (XUAR). The FLETF includes seven member agencies and six observer agencies: clearly, forced labor, particularly from the XUAR, has become an important enforcement priority for the U.S. government.
The Department of Homeland Security maintains the UFLPA Entity List for entities that have produced goods in XUAR using forced labor; have worked with Xinjiang government entities to use forced labor; have exported into the U.S. products made with forced labor; or have sourced materials from Xinjiang or entities working with Xinjiang.
The U.S. Department of Labor, through the Bureau of International Labor Affairs (ILAB) maintains a “public a list of goods from countries that ILAB has reason to believe are produced by forced labor or child labor in violation of international standards, including, to the extent practicable, goods that are produced with inputs that are produced with forced labor or child labor.” [See Trafficking Victims Protection Reauthorization Act (TVPRA of 2005)]. As of September 2022, the ILAB’s TVPRA List contains 159 goods from 78 countries and areas.
Detailed BITE analysis has shown that many of the commodities detained and/or seized by CBP under the UFLPA are not directly shipped from China to the U.S. but likely contain raw commodities from the XUAR, which are then processed or transshipped through an intermediary country like Malaysia. Best practices for forced labor compliance should include mapping and screening the importers’ supply chain from raw materials to the production of the imported goods.
Open-source research conducted by NGOs analyzing forced labor in the global supply chain indicated Chenguang Biotech Group Co., Ltd., was linked to forced labor in the XUAR. Chenguang Biotech Group Co., Ltd., was added to the UFLPA Entity List on August 1, 2023. The BITE team of customs SMEs and data scientists analyzed their trade activities across 750 million trade transactions ingested into the BITE AI Platform with the following results:
Within five countries’ trade data, Chenguang Biotech Group Co., Ltd., was seen in 211 transactions between October 2021 - November 2022 (see end of article to access transactions).
For the purposes of this study, the BITE Team examined just the Indian imports/exports of Chenguang Biotech Group Co., Ltd.,-related entities which indicate that Indian spice and supplement companies import bulk commodities from Chenguang Biotech Group Co., Ltd., process the foodstuff and then ship finished products to the U.S. (See schematic below)
In Indian import data, Chenguang Biotech Group Co., Ltd., was listed as the Shipper on 131 transactions to 15 Indian consignees. The total declared value of these shipments was upward of USD$55 million.
Additionally, of the 15 Indian importing companies, 13 have shipments to the U.S. Between June 1, 2022, and October 31, 2022, the 13 Indian consignees shipped products with a total value above $100m . The shipments included ten HS Codes.
Upon further investigation, 8 Indian companies were seen importing a product from Chenguang Biotech Group Co., Ltd., and subsequently shipping a variation of the product to the U.S., e.g., importing oleoresin paprika crude and exporting oleoresin paprika refined.
This suggests a direct supply line for products shipped from Xinjiang, processed in India, and imported into the U.S. Some well-known US companies can be found in the analysis, reflected in the diagram below.
*BITE (dba NU Borders LLC) does not assert that all of the bulk shipments by Chenguan Biotech Group Co., Ltd. are incorporated into the Indian products shipped to the U.S. but is providing this information to demonstrate the higher risk associated with U.S. companies trading with foreign suppliers who transact with UFLPA Entities. It is important to note that the transactions captured above may predate the UFLPA Entity listing but that does not absolve U.S. importers from conducting effective due diligence to identify commodities whose supply chain originates in the XUAR.
*Note: to access unredacted image, including names of US companies, please see the end of this article for instructions on how to access the data.
Importers’ risk management obligations for commodities associated with forced labor have significantly increased since the UFLPA came into effect. CBP now uses data analysis approaches to identify high-risk shipments similar to the approach the BITE team employed in this report. The BITE platform is unique in that we have ingested tens of thousands of XUAR entities and specialized commodity filters which are cross-referenced against hundreds of millions of trade transactions to rapidly reveal forced labor entities and commodities within global supply chains.
Importers are well advised to begin using screening and vetting technologies such as the BITE AI Platform to perform simplified screening procedures at very low costs to avoid costly detentions, seizures, and penalties, as well as reputational damage for forced labor violations.
For a more detailed investigative report on our analysis, and in order to receive a record of the transactions that support our findings, please click here: https://buy.stripe.com/28o8z6eBlbev6PedQQ
Or Scan the following QR Code:
The BITE team will provide the full, detailed investigative report as well as a download of all relevant trade transactions upon payment.
For more information, please contact us at bite@nuborders.com.
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