Kharon Names Chinese and Vietnamese Shoe Factories as UFLPA Risks

Kharon, a compliance risk adviser, said over a million kilograms of shoes and related footwear products have been sent to the U.S. by a company whose factory in Quanzhou, China, has accepted dozens of workers from the Xinjiang region. Those workers were placed by government labor transfer programs under the guise of poverty alleviation.

The Uyghur Forced Labor Prevention Act says that companies outside Xinjiang that accept minority workers through labor transfers are presumed to be using forced labor.

Kharon, in its blog post, "Understanding How Forced Labor Can Impact Footwear Manufacturing," said Fujian Sunshine Footwear accepted labor transfers in 2021 and in 2018, of Krgyz and Uyghur workers. It said that Fujian Sunshine Footwear supplies shoe pads, woven fabric, rubber soles, ziper sets and shoe buttons to Fulgent Sun Footwear in Vietnam. Both companies are subsidiaries of Fulgent Sun International. Kharon said Fulgent is a manufacturer for European, South Korean and U.S. footwear brands, which it didn't name.

"China plays a critical role in the manufacturing of footwear and sourcing of key components used by the footwear industry, to include natural fibers like cottons, leather, synthetics, recycled polyester, rubber, and wool," analyst Jake Galant wrote Aug. 1. "Other top global shoemakers, such as Vietnam, are heavily dependent on China’s raw materials for their products."

Kharon said it didn't know if any of the shipments it identified through trade data were detained by CBP under suspicion of forced labor. However, the blog post noted that "nearly half of detained shipments in the apparel, footwear, and textiles industry" were exported from countries other than China.