May 24, 2022

Volume XII, Number 144

Advertisement
Advertisement

May 24, 2022

Subscribe to Latest Legal News and Analysis

May 23, 2022

Subscribe to Latest Legal News and Analysis

Forced Labor Update — Possible Complete XUAR Import Ban

On December 8, the U.S. House of Representatives passed the Uyghur Forced Labor Prevention Act nearly unanimously. The House bill would create a “rebuttable presumption” that all goods from the Xinjiang Uyghur Autonomous Region (XUAR) were made with forced labor. The House version of the Uyghur Forced Labor Prevention Act also would require importers to affirmatively demonstrate that any goods imported from the XUAR were not made with forced labor. As a practical matter, this means that U.S. Customs and Border Protection (CBP) would be required to block shipments from XUAR, absent documentary proof from the importer of record that the shipped goods are free from forced labor. The House bill also requires CBP to report every shipment that it does allow into the U.S., to Congress and to the public. The House bill does not contain any provision to allow shipments that are currently en route from XUAR into the United States, and it does not provide any window for companies to update their supply chain tracing protocols.

The House bill also contains a provision requiring the president to identify and sanction individuals and entities that facilitate forced labor. The House bill further requires securities issuers that file with the U.S. Securities Exchange Commission to disclose whether they knowingly (1) engaged in activities with an entity helping to create mass surveillance systems in Xinjiang, (2) engaged in activities with an entity running or building detention facilities for Muslim minority groups in Xinjiang, or (3) conducted a transaction with any person sanctioned for the detention or abuse of Uyghurs or other Muslim minority groups in Xinjiang. Under the House bill, the president is required to determine whether to investigate and pursue sanctions or criminal charges.

The Senate passed a similar measure last year. Given the overwhelming bipartisan political support for the measure and the Biden administration’s increasing diplomatic pressure on China, including the recent announcement of a diplomatic boycott of the 2022 Olympics, there is a high likelihood that Congress will pass and the president will sign some version of this bill. The current and previous administrations have placed sanctions on companies operating in XUAR (discussed in this post in Foley’s Renewable Energy Outlook blog), and the Biden administration has already taken executive action to prevent imports of silica and silica-based products manufactured by Hoshine Silicon Industry Co. Ltd. into the United States (discussed in this post in Foley’s Renewable Energy OutlookDashboard Insights, and Manufacturing Industry Advisor blogs).

U.S. companies that source products from XUAR should review their supply contracts for change in law, force majeure, and other compliance provisions. Companies should also review their commercial project contracts to determine the impact of supply chain delays and determine compliance with relevant notice provisions. Companies importing products of any kind from XUAR should evaluate whether they have sufficient tracing information to ensure compliance with a complete import ban. Companies must also review their China-based contracts for compliance with Chinese law and familiarize themselves with any Chinese countermeasures. If this bill becomes law, CBP will monitor for potential transshipment attempts by Chinese companies. If your company acts as an importer of record, it will be held responsible for any such attempt, underscoring the importance of full-spectrum supply chain due diligence.

© 2022 Foley & Lardner LLPNational Law Review, Volume XI, Number 344
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Michael J. Walsh Government Litigation Lawyer Foley Lardner Law Firm
Partner

Michael J. Walsh, Jr. is a partner and litigation attorney with Foley & Lardner LLP. Based in the firm’s D.C. office, he is a member of the Government Enforcement Defense & Investigations Practice.

Prior to joining Foley, Mike served as Chief of Staff at the U.S. Commerce Department, and he also performed the duties of the General Counsel since August 2019. In this role as Chief Legal Officer, Mike oversaw more than 600 attorneys and was responsible for all legal matters within the Department. He also served as the senior advisor to the Secretary of Commerce on the most...

202.295.4040
Legal, Business, Jeffery Atkin, Foley Lardner, Environmental Attorney
Partner

Jeffery R. Atkin is a partner and business lawyer with Foley & Lardner LLP. His areas of practice cover a broad range of business and financial matters, including renewable energy, project finance, private placements, mergers and acquisitions, joint ventures, real estate development and equipment procurement and leasing. Mr. Atkin is chair of the Solar Energy Team, co-chair of the Energy Industry Team, and a member of the Latin America Practice.

Mr. Atkin’s experience in renewable energy and project finance includes representing developers,...

213.972.4557
Vanessa L. Miller, Foley Lardner, Manufacturing Litigation Lawyer,
Partner

Vanessa L. Miller is a partner and litigation lawyer with Foley & Lardner LLP. Ms. Miller’s practice focuses on a wide array of bet-the-company litigation, such as general manufacturing breach of contract and warranty disputes, automotive supply chain disputes, product liability lawsuits, trade secret claims, and railroad and rail transloading facility disputes. Ms. Miller also counsels clients on various commercial contract and product liability issues. She is a member of the firm’s Business Litigation & Dispute Resolution Practice.

313-234-7130
David W. Simon, Foley Lardner, Government Matters, FCPA Attorney
Partner

David W. Simon is a litigation attorney who devotes much of his practice to helping corporate clients avoid and manage crises that potentially give rise to government enforcement actions. He provides compliance advice, conducts internal investigations, defends companies against enforcement actions, and represents companies in litigation.

The Foreign Corrupt Practices Act (FCPA) is a principal focus of Mr. Simon’s practice. He also has extensive experience representing clients in antitrust matters and in defending False Claims Act investigations...

414.297.5519
Advertisement
Advertisement
Advertisement