December 11, 2019

December 11, 2019

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Federal Focus on Forced Labor in Xinjiang: Supply Chain Risks

There have been longstanding tensions in the Xinjiang province of China between the Chinese government and the Uyghurs, a predominately Muslim ethnic group.  The UN estimates that there are more than 1 million Uyghurs in detention camps, and there are reports of pervasive surveillance, wide-spread forced-labor, and “re-education” programs. 

These human rights abuses present significant risks for companies whose supply chains include products from Xinjiang.  Xinjiang produces the majority of China’s cotton, and cotton from Xinjiang may be mixed with cotton from other regions (or not be labeled as being from Xinjiang).  Because of this, some companies, such as Target Australia, have reported that they will no longer source cotton from China.  Several other products that may be integrated into global supply chains are produced in Xinjiang, including tomato paste and sugar. 

Recent actions at the U.S. federal level reflect serious concerns about the treatment of Uyghurs in Xinjiang, and concerns about the effects of forced labor, in Xinjiang and elsewhere, on global supply chains. 

On October 1, 2019, U.S. Customs and Border Protection (CBP) issued a Withhold Release Order (WRO) for garments produced in Xinjiang by Hetian Taida Apparel Co., which were produced with prison or forced labor.  The CBP issued four other WROs for products mined or produced with forced labor in Malaysia, Democratic Republic of the Congo, Zimbabwe, and Brazil.  The CBP Press Release announcing these WROs may be read here.

On October 17, 2019, the Congressional Executive Commission on China (CECC) held a hearing titled “Forced Labor, Mass Interment, and Social Control in Xinjiang.”  Members of the CECC recognized the human rights abuses occurring in Xinjiang and expressed concerns that U.S. imports are tainted by forced labor.  Representative Thomas Suozzi (D-New York) specifically identified several companies whose products include materials from the region which may be produced by forced labor: Adidas; Campbell Soup; Kraft Heinz; Coca-Cola; Gap, Inc.; H&M; Espirit; Calvin Klein; Tommy Hilfiger; Nike; and Patagonia.  Members of the CECC also expressed their support for the Uyghur Human Rights Policy Act of 2019 (H.R. 649), which would direct U.S. government bodies to report on China’s treatment of the Uyghurs. 

On October 31, 2019, the Co-Chairs of the CECC, Representatives James McGovern (D-Massachusetts) and Marco Rubio (R-Florida), wrote to the Acting Commissioner of the U.S. Customs and Border Protection (CBP), asking CBP “to use its authority under 19 U.S.C. § 1307 to investigate and block imports made with forced labor in the [Xinjiang Uyghur Autonomous Region] from entering the U.S. market and, where appropriate, pursue criminal investigations related to the use of forced labor to produce goods being imported into the United States.”  A copy of that letter may be read here.

On November 4, 2019, Senators Sherrod Brown (D-Ohio), Ron Wyden (D-Oregon), and Richard Blumenthal (D-Connecticut) wrote to Attorney General, Secretary of State, Secretary of the Department of Labor, and the Acting Secretary of the Department of Homeland Security to request information about U.S. government actions “to ensure the federal procurement process is not complicit in human trafficking or forced labor.”  A copy of that letter may be read here.  While the Senators did not specifically name concerns about products from the Xinjiang region in this letter, it further demonstrates that concerns about forced labor in supply chains are receiving consistent attention at the federal level.

U.S. trade law prohibits the importation of goods made, in whole or in part, with forced labor.  Businesses in affected industries should closely scrutinize their supply chains and compliance programs to avoid any supply chain disruptions and establish programs to identify and mitigate forced labor that may exist.  Squire Patton Boggs can assist clients in reviewing their supply chains, and navigating the enforcement of current and potential future WROs.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Sarah K. Rathke, Squire Patton Boggs, Manufacturing Litigation
Partner

Sarah Rathke is a trial lawyer specializing in manufacturing litigation, particularly complex supply chain disputes. She has argued and tried cases on behalf of manufacturers in forums throughout the US. Her clients include foreign, domestic, and multinational manufacturing entities. Her skills include a deep understanding of the process of bringing highly engineered products to market and conveying that understanding to judges and juries.

Sarah has litigated supply chain disputes involving automotive, aerospace, medical, construction and office...

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Ludmilla Kasulke International Trade Attorney
Associate

Ludmilla (Milla) Kasulke draws on her experience in both domestic and international policy to assist clients on trade matters. Milla provides multinational corporations, sovereign governments and entities, and quasi-government entities with advice on a wide range of trade policy, legal, and regulatory issues. She has been actively engaged in all aspects of the Section 232 process, including the exclusion petition process, and regularly advises clients on the impacts of current and potential new actions. Milla also regularly counsels clients on the impacts of current and potential new trade negotiations, including the US-Mexico Canada Agreement (USMCA) and US-Japan and -EU talks.

Prior to law school, Milla was the special assistant to the chairman of the White House Council on Environmental Quality, where she gained first-hand experience in the daily operations of the executive branch. While at the council, she worked closely with the chairman and his team of policy advisors in the development and management of significant administration policies and programs, such as the Major Economies Meetings on Energy Security and Climate Change.

While in law school, Milla served as the assistant to former White House Counsel and former US Ambassador to the European Union C. Boyden Gray. She was elected as a vice president on the executive board of the Student Bar Association, where she represented part-time student interests. Additionally, she was an active member of the Georgetown Journal of Law & Public Policy staff, where she served as a symposium director.

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Jordan O'Connell Litigation lawyer Squire PB
Associate

Jordan O’Connell is an associate in the Litigation Practice Group. Jordan focuses her practice on complex commercial litigation.

While in law school, Jordan served as a judicial extern in the Chambers of Judge Karen Nelson Moore of the Sixth Circuit Court of Appeals and Judge Donald C. Nugent of the US District Court, Northern District of Ohio. She also earned numerous CALI Excellence for the Future Awards.

Prior to law school, Jordan worked as a grant manager for the Alaska Conservation Foundation and as an intern for US Senator Mark Begich.

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