Why third‑party risk management must prove material origin in 2025–2026

Trade compliance now requires verifiable, end‑to‑end material traceability. In the United States, the Uyghur Forced Labor Prevention Act (UFLPA) established a rebuttable presumption, effective June 21, 2022, that goods mined, produced, or manufactured wholly or in part in Xinjiang—or by entities on the UFLPA Entity List—are prohibited from import unless the importer rebuts the presumption with clear and convincing evidence. citeturn0search0turn0search1turn1search2

In the European Union, the EU Deforestation Regulation (EUDR, Regulation (EU) 2023/1115) requires operators to submit a due diligence statement and provide geolocation for all plots of land tied to relevant commodities and products. Following legislative updates, application dates are December 30, 2025 for large operators/traders and June 30, 2026 for SMEs. citeturn0search5turn0search2

What regulators expect to see

• UFLPA evidence standard: importers must map the entire supply chain, respond to CBP inquiries, and establish by clear and convincing evidence that goods were not made with forced labor. CBP outlines non‑exhaustive documentation: transaction and supply‑chain records (e.g., bills of lading), parties to the transaction, and origin/payment/transport records for raw materials. citeturn1search2turn1search0

• UFLPA detention addendum: CBP provides an attachment to detention notices describing example documents for an applicability review package. citeturn1search6

• EUDR due diligence: operators must provide country of production and geolocation of all plots for relevant commodities/products, plus a due diligence statement asserting no or only negligible risk of non‑compliance. citeturn0search2

Chain‑of‑custody models that withstand audit

To meet UFLPA/EUDR expectations, use formal chain‑of‑custody (CoC) models aligned to ISO 22095:2020. Common models include Identity Preserved, Segregated, and Controlled Blending (mass‑balance‑like) approaches. Choose the strictest model feasible for high‑risk inputs. citeturn2search0turn2search1

Recommended practices

• Prefer identity‑preserved lots for highest‑risk materials (e.g., cotton, polysilicon, tomato derivatives, cocoa).

• Maintain immutable, time‑sequenced event logs (receipt, transform, ship) using interoperable standards (e.g., GS1 EPCIS 2.0) to preserve provenance across trading partners. citeturn3search0

• Record geolocation for origin plots and facilities; attach purchase orders, production records, transport documents, and payment proofs at each step. citeturn1search2

BOM and chain‑of‑custody field mapping

The table below shows how to turn a bill of materials (BOM) into auditable evidence.

Notes: “ordinary‑course” documentation and supply‑chain mapping align with CBP’s Operational Guidance and UFLPA FAQs; geolocation and due‑diligence data align with EUDR Art. 9. citeturn1search0turn1search2turn0search2

How Parakeet Risk operationalizes material traceability

Parakeet Risk is an AI‑native GRC platform for industrial supply chains that integrates TPRM, material traceability, and audit automation:

• Material traceability and supplier visibility across sourcing ecosystems with certification tracking and robust audit trails.

• Event‑level provenance ingestion: capture and index evidence (POs, invoices, transport docs), link to BOMs, and enrich with standardized identifiers. Parakeet works alongside spreadsheets and existing systems to retain institutional knowledge while adding audit‑grade controls.

• AI research and dossier drafting: the Rosella AI Agent automates regulatory change capture and assembles audit‑ready narratives and citations from your evidence store.

• Workflow and collaboration: investigation and remediation tasks sync to Trello, documentation exports to Google Docs, and real‑time alerts to Slack and Microsoft Teams.

• Continuous compliance and readiness: maintain audit‑ready packages and regulatory calendars.

“UFLPA dossier” checklist (importer package)

Use this as an internal preparation list; tailor per commodity and risk level.

• Narrative statement: scope of import, product description, HTS codes, and whether requesting applicability review or presumption exception.

• Supply‑chain map from raw input to finished goods: entities, roles, relationships, and transport legs (include flow chart).

• Transaction stack: purchase orders, contracts, invoices, packing lists, bills of lading, manifests, delivery notes, proof of payment, Incoterms.

• Production provenance: batch/lot records, yields, transformation logs, facility registrations, and time‑stamped photos where available.

• Labor and compliance evidence (when applicable): worker rosters, hiring records, wage proofs, residence status, audit reports; show absence of government labor transfers at flagged entities.

• Origin verification: certificates of origin, third‑party certifications, and—if PRC exposure exists—evidence addressing each forced‑labor indicator.

• Traceability event data: time/location of key events (receive, transform, ship), container IDs, seal numbers, and aggregation links.

• Attestations and controls: supplier code of conduct, training logs, monitoring results, and remediation actions.

• Index and cross‑reference: consistent lot/PO identifiers across all documents. These elements reflect CBP’s Operational Guidance, UFLPA FAQs, and detention addendum examples. citeturn1search0turn1search2turn1search6

EUDR data capture essentials (for in‑scope commodities/products)

• Due diligence statement referencing Article 4 with required fields.

• Geolocation for all origin plots (or all establishments where cattle were kept), time range of production, and country/region metadata.

• Risk assessment/mitigation records and evidence of “negligible risk” prior to placing products on the EU market. Regulatory requirements summarized here derive from the consolidated EUDR text. citeturn0search2

Standards and tooling to accelerate traceability

• GS1 EPCIS/CBV 2.0 for interoperable, event‑level provenance across partners and systems. citeturn3search0

• ISO 22095 for consistent CoC terminology and model selection. citeturn2search0

• NIST IR 8536 meta‑framework for linking pedigree, provenance, and traceability chains across manufacturing ecosystems. citeturn2search8turn2search7

One‑click “Download CBP packet (sample)”

Parakeet assembles a CBP‑ready binder from your mapped BOM, EPCIS events, and ordinary‑course documents, with a cover memo and indexed exhibits. Use the generator to produce:

• Cover letter stating applicability/exception posture

• Supply‑chain flow diagram and entity matrix

• Document index cross‑referenced by lot/PO

• Transaction stack (PO→invoice→payment) and transport stack (BOL→manifest)

• Production and quality records

• Attestations, audits, and controls

• Appendix: data lineage of event logs (hashes, timestamps)

Implementation blueprint for TPRM leaders

1) Scope commodities, inputs, and suppliers; classify risk by jurisdiction/entity exposure. 2) Select CoC model per risk; enforce identity‑preserved lots where feasible. 3) Instrument capture: adopt EPCIS 2.0 for receive/transform/ship events; bind to BOM and GLN/GTIN identifiers. 4) Collect ordinary‑course documentation automatically from ERPs, WMS/TMS, and supplier portals; preserve originals. 5) Record geolocation of origin plots and facilities; verify coordinates against satellite or cadastral sources for EUDR. 6) Automate dossier generation (UFLPA/EUDR) and exception/applicability workflows; route tasks to suppliers via Trello/Slack; export binders to Google Docs.

Product links and resources

• Parakeet industry solutions for Consumer Goods/Packaging and Manufacturing

• Platform capabilities include Features, Continuous Compliance, Rosella AI Agent, and Integrations

• Contact for a tailored walkthrough or a sample CBP packet

Legal notice

This page is provided for informational purposes only and does not constitute legal advice. Always consult qualified counsel on UFLPA/EUDR matters.

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