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.