House Select Committee on the Chinese Communist Party Adopts First Policy Proposals, Including Several on Forced Labor in the Xinjiang Uyghur Autonomous Region
On May 24, the House Select Committee on the Chinese Communist Party (“the Select Committee”) unanimously adopted its first set of policy proposals, which include a proposal on countering what it views as forced labor among Uyghur populations in the Xinjiang Uyghur Autonomous Region (XUAR).1 The proposal identifies the Select Committee’s findings related to treatment of Uyghurs in the XUAR, and proposes policy changes to remedy issues identified in these findings. Though the Select Committee’s findings are not binding, its recommendations are well publicized and may influence coming US Congress activity, as the Select Committee’s work has generally been seen as a serious, bipartisan endeavor.2
The Select Committee’s formal proposal provides six findings, with policy recommendations to accompany each. In connection with the first finding, the Select Committee calls on Congress to pass the Uyghur Human Rights Sanctions Review Act (H.R. 1324). That act would require the US Treasury Department to make sanctions determinations on ten Chinese companies involved in the supply of technology to the Chinese government used to monitor Uyghurs. The Select Committee also recommends considering further sanctions to isolate entities already sanctioned for their conduct in the XUAR.3
The second finding and the sixth and final finding focus on what the Select Committee views as a lack of coordination between the US and its allies in responding to actions in the XUAR. It generally proposes options to increase diplomatic engagement with other countries on these issues.4
The third finding alleges that goods made with Uyghur forced labor persist in US supply chains. The finding identifies “agricultural products, cotton apparel, auto parts, and solar panels” as goods that present an increased risk of having forced labor in their supply chains.5 In response, the Select Committee proposes increased funding dedicated to forced labor investigations and enforcement at the US Department of Homeland Security and reducing the de minimis exemption for duty free shipment to the US to increase scrutiny on low-value packages for forced labor issues. The Select Committee also encourages Congress to consider passing pending legislation that would collect intelligence on forced labor in the XUAR and require the Director of National Intelligence to report on the issue.6
The fourth finding alleges that foreign investment in China helped develop the surveillance technology allegedly in use on Uyghurs in the XUAR today. In response, the Select Committee calls on Congress to 1) pass legislation prohibiting the federal retirement Thrift Savings Plan from investing in Chinese companies subject to human rights sanctions; 2) consider legislation doing the same for private pension funds; and 3) explore outbound investment restrictions and disincentives, such as a revocation of tax exempt status for otherwise eligible entities investing in “problematic PRC entities.”7
The fifth finding alleges that existing enforcement statutes to hold perpetrators of abuses against Uyghurs accountable for their actions have not been fully implemented. In response, the Select Committee suggests expanding the Uyghur Forced Labor Prevention Act Entity List and imposing Magnitsky Act sanctions on Chinese officials responsible for “atrocities against Uyghurs,” consistent with the Uyghur Human Rights Policy Act.8
As discussed above, these findings and policy recommendations are not binding. However, as they mention specific pieces of pending legislation and propose enhanced enforcement of existing statutes as well as legislative solutions not in current bills, the business community should continue to closely monitor US legal and policy developments on this subject and take appropriate measures protect its supply chain against disruptions.
1 https://selectcommitteeontheccp.house.gov/media/press-releases/select-committee-ccp-overwhelmingly-adopts-proposals-uyghur-genocide-taiwan. The second policy proposal adopted on that date focuses on military strategies to “enhance Taiwan’s deterrence.”
2 https://www.mayerbrown.com/en/perspectives-events/publications/2023/02/us-house-of-representatives-forms-select-committee-on-uschina-economic-competition-indicating-increased-legislative-focus-on-the-issue
