US Department of State Updates Its 2021 Xinjiang Supply Chain Business Advisory
On September 26, 2023, the US Department of State, together with the Department of the Treasury (Treasury), Department of Commerce (DOC), Department of Homeland Security (DHS), the Office of the US Trade Representative (USTR), and the Department of Labor (DOL), issued an Addendum to the July 2021 “Advisory on the Risks and Considerations for Businesses and Individuals with Exposure to Entities Engaged in Forced Labor and other Human Rights Abuses linked to Xinjiang Uyghur Autonomous Region, People’s Republic of China.”1
The addendum informs the business community of several obligations and updates under the Uyghur Forced Labor Prevention Act2 and Section 307 of the Tariff Act of 1930.3 These new enforcement measures are based upon “additional reports on” allegations of “continuing human rights abuses in Xinjiang,” with reports coming from both government and non-government sources. In light of these reports, the September 2023 addendum states that it focuses on “potential supply chain exposure from entities engaged in human rights abuses through the sourcing of goods from Xinjiang, or from entities elsewhere in the People’s Republic of China (PRC) connected to the use of forced labor of individuals from Xinjiang[.]”4
The September 2023 addendum highlights several actions that U.S. departments and agencies have taken to address human rights abuses allegedly present in supply chains, including actions taken by DOL’s Office of Child Labor, Forced Labor and Human Trafficking; DHS’s Forced Labor Enforcement Task Force (FLETF); DOC’s Bureau for Industry and Security (BIS); and the Treasury. These actions include:
- DOL’s Office of Child Labor, Forced Labor, and Human Trafficking identification in September 2022 of 10 downstream products containing goods that the Bureau of International Labor Affairs had reason to believe were produced with forced or child labor;5
- FLETF’s “Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China” (the “Strategy”), which it first published in June 2022 and updated in July 2023.6 By its own terms, the Strategy includes:
1) a comprehensive assessment of the risks of importing goods mined, produced, or manufactured, wholly or in part, with forced labor in the PRC;
2) an evaluation and description of forced-labor schemes, UFLPA-required lists (including the UFLPA Entity List), UFLPA-required plans, and high-priority sectors for enforcement;
3) recommendations for efforts, initiatives, tools, and technologies to accurately identify and trace affected goods;
4) a description of how US Customs and Border Protection (CBP) plans to enhance its use of legal authorities and tools to prevent entry of goods at U.S. ports in violation of 19 U.S.C. § 1307 [customs regulations on forced labor];
5) a description of additional resources necessary to ensure no goods made with forced labor enter U.S. ports;
6) guidance to importers; and
7) a plan to coordinate and collaborate with appropriate NGOs and private-sector entities.7
The addendum also emphasizes 1) the UFLPA applies to goods that use inputs from Xinjiang, even if that those goods are exported to the United States from a third country, as well as to “finished goods with Xinjiang content that are transshipped through another country to the United States,” and 2) goods imported on or after June 21, 2022, which would otherwise have been subject to the Xinjiang-related Withhold Release Orders (WROs), are now being enforced under UFLPA’s rebuttable presumption.8
- Since 2019, BIS has added 72 entities to the Entity List for “Xinjiang-related human rights reasons.” During this time period, BIS has also added several entities allegedly engaged in the collection and analysis of genetic data.9
- On December 10, 2021, Treasury’s Office of Foreign Assets Control (OFAC), pursuant to Executive Order 13959,listed PRC firm SenseTime Group Limited (SenseTime) on the Non-SDN Chinese Military-Industrial Complex Company (NS-CMIC).
This addendum can provide insight to businesses interested in the United States’ current approach toward what it views as human rights abuses and related foreign policy, including companies with potential supply chain exposure due to its sourcing pattern and/or the industry sector in which it operates. The importing community and other interested parties should carefully review this addendum to see if the new obligations and updates apply to their direct and indirect sourcing of goods and input, and they should also continue to monitor US updates related to the issue.
1 https://www.state.gov/wp-content/uploads/2023/09/Xinjiang-2 Business-Advisory-Addendum-July-2023-FINAL-Accessible-09.26.2023.pdf.
4 https://www.state.gov/wp-content/uploads/2023/09/Xinjiang-Business-Advisory-Addendum-July-2023-FINAL-Accessible-09.26.2023.pdf.
5 https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods/supply-chains.
6 https://www.dhs.gov/sites/default/files/2022-06/22_0617_fletf_uflpa-strategy.pdf;
https://www.dhs.gov/sites/default/files/2023-08/23_0728_plcy_uflpa-strategy-2023-update-508.pdf.
7 https://www.state.gov/wp-content/uploads/2023/09/Xinjiang-Business-Advisory-Addendum-July-2023-FINAL-Accessible-09.26.2023.pdf at 9–10.
8 https://www.state.gov/wp-content/uploads/2023/09/Xinjiang-Business-Advisory-Addendum-July-2023-FINAL-Accessible-09.26.2023.pdf at 17–18.
