Labor Department Hunting Forced-Labor Risks With Sayari
The U.S. Department of Labor (DOL) Bureau of International Labor Affairs (ILAB) tapped a supply chain intelligence platform to find forced labor risks in supply chains.
Washington, D.C.’s Sayari is now providing commercial risk intelligence and enhancing the agency’s import regulation work. The software provider’s signature product, Sayari Graph, maps global supply chains and screens suppliers in real time using global trade and corporate data. The labor affairs bureau will use the platform to help enforce the Uyghur Forced Labor Prevention Act (UFLPA) and monitor candidates for the growing blacklist of risky companies.
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Already in use by U.S. Customs and Border Protection (CBP), ILAB is the second agency of the U.S. Department of Labor’s Forced Labor Enforcement Task Force (FLETF) to adopt the analytics platform. The seven-agency FLETF is tasked with keeping forced-labor goods out of the U.S.
“We are proud to partner with DOL to investigate suspected ties to forced labor,” Sayari CEO and co-founder Farley Mesko said in a statement. “The level of visibility Sayari enables into complex supply chains at a time of increasing regulatory concern is unparalleled and will empower DOL to deny entities that engage in forced labor access to the U.S. economy.”
Sayari, one of Inc.’s 5,000 fastest-growing private U.S. companies, was awarded CBP’s $7.8 million enterprise contract in September 2022, giving trade enforcement and investigation teams access to commercial and risk data, including trade metrics from over 65 reporting countries. This helps investigators to better identify “deep sub-tier counterparty risk” and compel companies to comply with import regulations like the UFLPA. According to Sayari, investigators using the analytics platform discover an average of 544 percent net new entities. The data-rich platform surfaces results on 90 percent of the subjects searched.
A Sayari executive explained how the system supports the bureau work.
The DOL division is using the company’s analytics platform to understand ownership structures and look at actual trade flows, Sayari global head of analytical solutions Dave Lynch told Sourcing Journal. Sayari pulls data from corporations and their owners, as well as bill of lading (BoL) documents on the goods being transported. “We’re identifying actual shipment contents, along with the consignor and consignee,” Lynch said.
“ILAB is first using our ownership data to better understand parent company and subsidiary relationships in China,” he said. This is essential because there’s no public information on trade in China. “If you’ve got a company in Xinjiang and a company in Shanghai, there unfortunately is no public trade data that would tell you that there’s a shipment going between those two companies,” Lynch added.
Ownership data offers “a proxy measure of trade” happening in China, however. Data in Sayari Graph, when paired with available international trade data, “is helping to figure out if there are any Xinjiang or Xinjiang-linked companies that are shipping products internationally that might find their way into U.S. markets, either directly or through commingled shipments,” Lynch said.
Today, Sayari’s clients are split 50-50 between companies tracing their supply chains and mitigating risk and government agencies tasked with combatting forced labor. Lynch said UFLPA has forced companies to look “beyond their immediate suppliers to proactively screen risk.” And as agencies like DOL and CBP amass supplier insights using the Sayari platform, they’ll get better at identifying risks and producing audits that could help companies understand where things went wrong if their shipment gets detained or they’re issued a Withhold Release Order (WRO).
Understanding China’s supply chains is also a matter of national security, according to Sayari.
“To successfully implement de-risking strategies and, and ultimately execute the National Security Strategy, it is imperative for government officials and departments to better understand complicated business ownership in order to avoid inadvertently reinvesting in businesses ultimately controlled by Beijing,” Sayari director of defense and intelligence James Dempsey said in a statement last fall. Sayari contributed to the Atlantic Council’s research into China-based companies and their role in supporting the Chinese government’s coercive regime. Dempsey said the Chinese Communist Party, or CCP, “uses all levers of national power to achieve foreign policy objectives.”
In a statement, Dr. William Piekos, nonresident fellow with the Atlantic Council’s Global China Hub, said global public data is “critical” to investigations into China’s influence, “allowing insight into direct ownership links between entities, and when deployed alongside trade, shipping, and geospatial data, offering further insight into connections between and across jurisdictions.”
In September, Sayari appointed Kevin Higgins, senior executive of the Central Intelligence Agency’s Directorate of Operations, to its board. “His specialized knowledge will inform innovative tactics for Sayari’s government customers working to keep essential technologies away from illicit actors and corporate customers grappling with the influx of regulations resulting from today’s complex geopolitical landscape,” the company said.
