California Attorney General Asks Retailers And Manufacturers To Report On Supply Chains Act Compliance
Friday, April 17, 2015

The California Attorney General’s office recently sent letters to retailers and manufacturers asking them to demonstrate compliance with the California Transparency in Supply Chains Act or why they are not subject to the act.  It requires retail sellers and manufactures doing business in California to disclose their efforts to eradicate slavery and human trafficking from their supply chains for tangible goods offered for sale. Cal. Civ. Code § 1714.43(a).  To be subject to this new requirement, a retail seller or manufacturer must have annual worldwide “gross receipts” that exceed $100 million.  The Act includes definitions of “doing business in this state”, “gross receipts”, “manufacturer” and “retail seller”.

The Attorney General’s office isn’t saying how it identified the recipients (some may say targets) of its correspondence.  However, a good guess might be the California Franchise Tax Board which is required under the act to provide the Attorney General with a list of retailers and manufacturers.  Cal. Rev. & Tax. Code § 19547.5.  The FTB is able to provide this information because determination of whether a business is a retailer or manufacturer is based on the company’s principal business activity code disclosed on its California tax return.  Cal. Civ. Code § 1714.43(a)(2)(C) & (D).

The Attorney General’s office has recently issued this glossy resource guide and a consumer alert concerning the act.  The alert advises:

The Act provides consumers with a mechanism to use the power of information in the fight against slavery and trafficking. For California consumers, evaluating company disclosures required by the California Transparency in Supply Chains Act is among the best ways to use their voices and wallets to influence supply practices that contribute to the slavery and trafficking problem around the globe.

At the moment, the Attorney General is merely “requesting” information regarding compliance:

If your company has posted the required disclosures on its Internet website or, alternatively, takes the position that it is not required to comply with the Act, we request that – within 30 days of this letter’s date – you complete the form accessible at http://oag.ca.gov/sb657 and provide this office with (1) the web links (URLs) to both your company’s Transparency in Supply Chains Act disclosures and its homepage containing a link to the disclosures; and/or (2) information demonstrating your company is not covered by the Act. In order to access the response form, please follow the “Compliance Information Submission” link in the Corporate Compliance Portal at http://oag.ca.gov/sb657. After completing the form, you can submit the information to this office at the webpage, which will require entering Registration Code [REGISTRATION CODE] at the bottom of the form.

 

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