On July 13, 2021, the U.S. government released an updated version of the Xinjiang Supply Chain Business Advisory. The notice, which was originally released last summer, states that the PRC government is perpetrating genocide and crimes against humanity in Xinjiang, highlights the legal risks posed to companies and supply chains, updates the list of U.S. governments authorities and enforcement actions, and provides a list of other countries’ relevant regulatory provisions and information on forced labor in supply chains. Notably, the new advisory adds the Department of Labor (DOL) and the Office of the U.S. Trade Representative (USTR) as co-signatories.

The risks and types of exposure companies and supply chains face, as outlined by the Xinjiang Supply Chain Business Advisory and State Department Press Release, are provided below.

Risks related to investment in PRC companies linked to surveillance and forced labor in Xinjiang:

  • Violation of statutes criminalizing forced labor including knowingly benefitting from participation in a venture, while knowing or in reckless disregard of the fact that the venture has engaged in forced labor
  • Sanctions violations if dealing with designated persons
  • Export control violations
  • Violation of the prohibition of importations of goods produced in whole or in part with forced labor or convict labor.

Primary types of potential supply chain exposure to entities engaged in human rights abuses:

  • Assisting or investing in the development of surveillance tools for the PRC government in Xinjiang, including tools related to genetic collection and analysis
  • Sourcing labor or goods from Xinjiang, or from entities elsewhere in China connected to the use of forced labor of individuals from Xinjiang, or from entities outside of China that source inputs from Xinjiang
  • Supplying U.S.-origin commodities, software, and technology to entities engaged in such surveillance and forced labor practices
  • Aiding in the construction and operation of internment facilities used to detain Uyghurs and members of other Muslim minority groups, and/or in the construction and operation of manufacturing facilities that are in close proximity to camps and reportedly operated by businesses accepting subsidies from the PRC government to subject minority groups to forced labor.

The full version of the Advisory is available here.

For more information on actions addressing human rights and forced labor abuses contact our team and see previous posts below.

Forced Labor/U.K. Modern Slavery Act Archives | International Trade Law (cmtradelaw.com)

Xinjiang Archives | International Trade Law (cmtradelaw.com)

 

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Photo of Frances P. Hadfield Frances P. Hadfield

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving…

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving customs compliance, audits, customs enforcement, as well as import penalties.

Frances represents clients before the U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit, as well as in proceedings at the administrative level. She advises corporations on both substantive federal and state regulatory issues that involve U.S. Customs and Border Protection, the Federal Trade Commission, Food and Drug Administration, and U.S. Fish & Wildlife in matters pertaining to product admissibility, audits, classification, import restrictions, investigations, marking, licenses, origin, penalties, and tariff preference programs.

Photo of John Brew John Brew

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations…

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations on matters involving customs administration, enforcement, compliance, litigation, legislation and policy.

John represents clients in proceedings at the administrative and judicial levels, as well as before Congress and the international bureaucracies that handle customs and trade matters. He advises clients on all substantive import regulatory issues handled by U.S. Customs and Border Protection and Immigration and Customs Enforcement, such as classification, valuation, origin, marking, tariff preference programs, other agency regulations, admissibility, import restrictions, quotas, drawback, audits, prior disclosures, penalties, investigations, Importer Self Assessment and Customs-Trade Partnership Against Terrorism programs, importations under bond, the Jones Act, vessel repairs, and foreign trade zone matters.