The historic Uyghur Forced Labor Prevention Act (UFLPA) is in full effect in the US. This federal law aims to ensure that no goods produced in China’s Xinjiang Uyghur Autonomous Region gets imported into the US, as the region is known for its widespread use of forced labor and human rights violations against the Uyghur ethnic minority.
What makes the UFLPA unique is that it’s all encompassing. Any product that is “made wholly or in part” in Xinjiang is presumed to be manufactured through forced labor and therefore banned unless a U.S. importer can prove that the goods in question were not made with forced labor. Since going into effect in June 2022, importers looking to ship products to the US have had to audit their supply chains to ensure compliance.
But where does that leave importers working in Europe? We’ve reviewed the latest in forced labor policy changes throughout Europe and the United Kingdom and will continue to stay abreast of changes as they come this year.
New Regulations Proposed by European Union
In September 2022, the European Union submitted a proposal aimed at banning all goods created as a product of forced labor. While the UFLPA imposed a blanket ban on products from Xinjiang, the EU proposal did not explicitly single out any regions. Although it is believed that the target of the proposal was the presumed forced labor in Xinjiang and analysts say “it reflects wariness over antagonizing Beijing and breaching World Trade Organization rules on trade.”
The proposal is expected to enter into force in 2023, but would likely take two additional years to be fully implemented. The proposal would prevent the importation of goods made with forced labor, and remove goods made with forced labor already on the market within the Union. As a result of the proposal,companies in the EU will be expected to take appropriate measures to identify and eliminate forced labor in their supply chains. Each member country will also be responsible for enforcing the ban. However, critics say that two major weaknesses of this bill are not specifying specific target regions and leaving individual nations to decide how to implement the policy.
A Forced Labor Challenge in the UK
Late last year, the British government was sued by the human rights watchdog, Global Legal Action Network (GLAN) and the World Uyghur Congress (WUC) for failing to stop the import of cotton from Xinjiang, presumed to be made with forced labor. The hearing occurred on October 25 and 26 in Britain’s High Court and the judgment will likely be coming early this year.
The human rights group argued that cotton from Xinjiang is “criminal property” under the Proceeds of Crime Act because it was obtained through forced labor. If they are successful in their lawsuit, a lawyer for GLAN stated that there could be serious ramifications for the apparel industry in the UK as it could open up the potential of shipments from Xinjiang being seized at the border.
In the UK, the Modern Slavery Act of 2015 expanded labor laws to, among other things, require certain companies to annually outline the steps they take to prevent modern slavery from entering their business or supply chains.. Through sanctions measures of various types, the UK has taken action against companies and persons suspected of forced labor, including asset freezes and travel bans against individuals and entities alleged to be involved in serious human rights violations against Uyghurs and other minority groups in Xinjiang.
In early 2021, the UK worked in coordination with Canada to introduce export controls designed to ensure that products from the UK are not exported to Xinjiang. And businesses that are found to not be in compliance with the Modern Slavery Act can now face financial penalties.
Investigating Forced Labor
With forced labor regulations in flux throughout Europe, businesses who want to remain in compliance will likely need to conduct thorough audits of their supply chains. While it may seem daunting, publicly available data gleaned from corporate filings and government registries can go a long way toward screening supply chains for forced labor risk.
Our informative ebook demonstrates actionable investigative tactics in a series of case studies and includes:
- How to screen company attributes for forced labor risk
- How to spot forced labor risk in related companies
- Which public data sources have the most helpful information