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The U.S. government is intensifying its efforts to persuade businesses to exit supply chains connected to China’s Xinjiang Uyghur Autonomous Region in light of increasing concerns about the use of forced labor in that area. Broader and stronger warnings about doing business in the XUAR, particularly in specified industries, are included in an updated business advisory issued July 13.
The advisory warns businesses, individuals, and others (including investors, consultants, labor brokers, academic institutions, and research service providers) that do not exit supply chains, ventures, and/or investments connected to Xinjiang that they could run a high risk of violating U.S. law and triggering criminal or civil enforcement actions. Potential legal risks include violation of statutes criminalizing forced labor (e.g., knowingly benefitting from participation in a venture while knowing it has engaged in forced labor), sanctions violations if dealing with designated persons, export control violations, and violations of the prohibition on imports of goods produced in whole or in part with forced or convict labor.
As a result, the advisory urges businesses and individuals to undertake heightened human rights due diligence to identify potential supply chain links to entities operating in Xinjiang, linked to
Xinjiang (e.g., through supply chain inputs), or utilizing Uyghur or other ethnic and Muslim minority laborers from Xinjiang. Supply chain exposure could come from sourcing labor or goods from Xinjiang or from entities (1) elsewhere in China connected to the use of forced labor of individuals from Xinjiang or (2) outside of China that source inputs from Xinjiang. The advisory newly adds that exposure could also come from supplying U.S.-origin commodities, software, and technology to entities engaged in surveillance and forced labor practices.
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