New ban on products made with forced labor in Xinjiang, China

September 15, 2020

Administration considering additional restrictions due to forced labor and human rights concerns

The Trump administration announced yesterday that it would restrict the import of certain products from the Xinjiang region of China due to forced labor and human rights concerns.

Acting Commissioner of U.S. Customs and Border Protection (CBP) Mark Morgan announced the issuance of Withhold Release Orders (WROs) to detain imports suspected of being made with forced labor from the following entities in the Xinjiang Uighur Autonomous Region (XUAR) of China:

  • Xinjiang Junggar Cotton and Linen Co. and its subsidiaries – Cotton
  • Hefei Bitland Information Technology Co. – Computer parts
  • Yili Zhuowan Garment Manufacturing Co. – Apparel products
  • Baoding LYSZD Trade and Business Co. – Apparel products
  • Lop County No. 4 Vocational Skills Education and Training Center – All products
  • Lop County Hair Product Industrial Park – Hair products

This action is the latest in the administration’s effort to combat forced labor and other human rights violations in the Xinjiang region, home to China’s Muslim Uyghur community. In July, the administration listed the Xinjiang Production and Construction Corps (XPCC) as a specially designated national (SDN) under U.S. sanctions laws enforced by the Office of Foreign Asset Controls (OFAC) by the Treasury Department; this bars all transactions that benefit the XPCC or its subsidiaries and affiliates with a 50-percent-or-greater controlling share by XPCC. The Commerce Department has also placed companies connected to the Xinjiang region on its Entity List subject to technology export controls.

The Trump administration is considering additional actions addressing forced labor in Xinjiang, including a broader ban on products from the region.

U.S. importers should be aware that importing goods with connections to the XUAR represents a significant risk. On July 1, the secretaries of the Departments of Homeland Security, Commerce, Treasury and State issued a warning to U.S. businesses against commercial activity in the XUAR, citing potential civil and criminal liability under U.S. law and indicated that normal due diligence was not effective in the XUAR.

To learn more about this important issue and the impact on outdoor companies, please join us for a webinar “Xinjiang and Forced Labor: Sourcing Risks from China and Beyond” on Tuesday, Sept. 29, at 3 p.m. (EDT).

This webinar will provide background on the situation in the Xianjiang region and the potential impact on imports from China and third countries. It will provide an overview of the existing WROs, OFAC sanctions and Entity List designations; the additional potential sanctions; and the practical steps importers can take to identify and mitigate their risk going forward.