American companies could bifurcate supply chains or route goods though other nations, they say.
By Jilil Kashgary for RFA Uyghur
Activists set up a mock Uyghur forced labor camp and call on US tech giant Apple Inc. to stop using Uyghur forced labor to manufacture its products, outside the Apple flagship store in Washington, DC, March 4, 2022.
A U.S. law that bans the importation of products from Xinjiang in China in response to allegations that Uyghurs in the region are being used as forced labor took effect this week, but the tough new prohibitions could prove difficult to enforce, experts said Wednesday.
The Uyghur Forced Labor Prevention Act (UFLPA) created what is referred to as a “rebuttable presumption” that assumes goods made in the Xinjiang Uyghur Autonomous Region (XUAR) are produced with forced labor and thus banned under the U.S. 1930 Tariff Act.
The law requires U.S. companies that import goods from the region to prove that they have not been manufactured at any stage with Uyghur forced labor.
In previous U.S. investigations of imports from China, cotton used in major clothing brands, tomatoes and polysilicon for solar panels have been linked to forced labor in the XUAR.
The U.S. and several Western parliaments have said that China’s action in Xinjiang constitute a genocide and crimes against humanity. China denies that it has persecuted Uyghurs or other ethnic minority groups in the region.
The new forced labor law passed with overwhelming bipartisan support in Congress and was signed into law by President Biden on Dec. 23, 2021.
But Douglas Barry, vice president of communications and publications for the U.S.-China Business Council, said the law is unclear about how companies can definitively prove that no forced labor was involved in the goods they import from China.
Several Chinese companies are already on the U.S. government’s Entity List, which forbids American firms from doing business with them unless they obtain special licenses, Barry said. Beyond that, the UFLPA places the onus on the U.S. firms to provide evidence that no forced labor was involved in the production of imported goods.
“That’s a challenge because of the lack of independent third party auditors on the ground in China,” he said.
“At the end of the day our member companies are fanatical about working in their supply chains to make sure there is no forced labor involved,” he said. “We hope that when enforcement issues arise in the coming days, the government agencies will work with the business community to resolve the issue as quickly as possible adjusting enforcement of tactics as the facts on the ground require.”
‘Challenging but doable’
Jessica Rifkin, an attorney who leads the customs, trade and litigation team at Benjamin L. England & Associates, said that exporters could get around the law by shipping their products to another country before they arrive in the U.S.
“[Y]ou have a good that’s subject to certain legal requirements based on its manufacture in one country, but then is shipped to another country, and then shipped through there to the U.S. in order to potentially evade those requirements,” she said.
These types of transactions could still happen under the new law, although Rifkin said that U.S. customs officials have ways to identify those goods.
U.S. companies could also divide their supply chains to get around the new requirement, presenting a major challenge to enforcement, said Peter Irwin, senior program officer for advocacy and communications at the Washington, D.C.-based Uyghur Human Rights Project.
“You have one supply chain that is for the U.S. market to comply with the law, and then maybe they’ll bifurcate their supply chain and have another supply chain that doesn’t necessarily need to follow this law,” he told RFA.
Since 2017, Chinese authorities have allegedly ramped up their repression of predominantly Muslim Uyghurs and other Turkic minorities in the XUAR, detaining up to 1.8 million members of these groups in internment camps. The maltreatment also includes severe human rights abuses, torture and forced labor.
Sophie Richardson, China director at New York-based Human Rights Watch, said the law’s implementation will be difficult but not impossible.
“Some of the most complex challenges may be for companies that have, for example, taken a semi-finished product and sent it to the Uyghur region for finishing, and then sent it someplace else, and then sent it on into the United States,” she said.
“Tracking the actual trajectory of the full supply chain is going to be challenging, but it is doable,” Richardson added. “Over time, hopefully what will happen is that companies will be do a better job of keeping records and sharing information about how things were produced and how they reached the U.S.”
Holding China to account
Rushan Abbas, executive director of the Washington, D.C.-based Campaign for Uyghurs, said called U.S. Customs and Border Protection should release data about any violations to the new law it finds.
“Data should be released on the Customs and Border Protection’s website on a regular basis about the goods it holds, re-exports, excludes, and seizes, including information on the company importing the banned goods, their nature, value, and why the action was taken,” Abbas said in a statement issued on Wednesday.
At a regular news conference in Beijing on Wednesday, Chinese Foreign Ministry spokesman Wang Wenbin called the allegations of forced labor in the XUAR “a huge lie made up by anti-China forces to denigrate China.”
“It is the complete opposite of the reality Xinjiang, where cotton and other industries rely on large-scale mechanized production and the rights of workers of all ethnic groups in Xinjiang are duly protected,” he said.
“The U.S.’s Uyghur Forced Labor Prevention Act is built on a lie and designed to impose sanctions on relevant entities and individuals in Xinjiang,” said Wang. “This move is the furtherance of that lie and an escalation of U.S. suppression on China under the pretext of human rights. Moreover, the act is solid evidence of U.S.’s arbitrariness in undermining international economic and trade rules and global industrial and supply chains.” The U.S. government has taken measures to promote accountability in the XUAR, including visa restrictions, financial sanctions, export controls and import restrictions, U.S. Secretary of State Antony Blinken said in a statement on Wednesday.
In July 2021, multiple U.S. agencies released an updated business advisory on Xinjiang warning of the legal risks associated with state-sponsored forced labor in supply chains connected to Xinjiang and providing guidance to help U.S. companies avoid trade that facilitates or benefits from human rights abuses.
“We are rallying our allies and partners to make global supply chains free from the use of forced labor, to speak out against atrocities in Xinjiang, and to join us in calling on the government of the PRC [People’s Republic of China] to immediately end atrocities and human rights abuses, including forced labor,” Blinken said.
Written in English by Roseanne Gerin.