On August 31, 2020, the Uighur Human Rights Project filed a petition with U.S. Customs and Border Protection (“CBP”) seeking the issuance of a withhold release order (“WRO”) on all cotton-made goods linked to the Xinjiang region of China based on purported evidence of widespread forced labor associated with such goods. (https://drive.google.com/file/d/1jphCR6KMvzh-4Iw58eTkk57ZhZbVkU1M/view). The issuance of a WRO creates a process by which affected goods may be detained, excluded or even seized.
The issue of alleged forced labor practices, particularly directed at Uighur and other minorities in the Xinjiang region of China, has been the subject of much attention on several fronts including the media, public interest groups, industry, Congress and the administration. While various commodities have come under scrutiny, extra attention has been drawn to textiles and clothing. Press reports maintain that China is the world’s biggest supplier of cotton products and that 84% of the country’s cotton output is sourced from Xinjiang.
This issue has been the subject of two bills in Congress, one of which (passed into law on June 17, 2020), authorizes the sanctioning of foreign persons identified as having engaged in specified abusive activities while the other (still pending) would generally prohibit the importation of “any significant goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part” in the Xinjiang Uyghur Autonomous Region (XUAR) of the People’s Republic of China; or by entities working with the government of the XUAR under “poverty alleviation” or “mutual pairing assistance” programs.
On the administrative front, the Trump administration has subjected various Chinese government officials and entities to sanctions. In addition, CBP has in the past year issued WRO’s with respect to four suppliers from China alone.
Given the increased attention that the issue of forced labor is receiving, importers are encouraged to take stock of their supply chain and document steps being taken to avoid the importation of affected items.
We are available to assist your company in connection with its due diligence in this area and to answer any questions you may have. Please do not hesitate to contact our office.