US, EU Tighten Scrutiny on China’s Xinjiang Over Uyghur Forced Labor Issue

Governments highlight risks for companies with supply chain and investment links to the region.
By Roseanne Gerin
US, EU Tighten Scrutiny on China’s Xinjiang Over Uyghur Forced Labor Issue US Secretary of State Antony Blinken speaks about the release of the 2021 Congressional Report Pursuant to the Elie Wiesel Genocide and Atrocities Prevention Act at the State Department in Washington, July 12, 2021.

The U.S. government on Tuesday expanded its warning about doing business in China’s Xinjiang Uyghur Autonomous Region (XUAR), citing forced labor and genocide against the Uyghur ethnic group, while the European Union issued new guidelines to halt the import of goods made with suspected forced labor.

The updated Xinjiang Supply Chain Business Advisory was issued in response to China’s “ongoing genocide and crimes against humanity in Xinjiang and the growing evidence of its use of forced labor there,” said a statement issued by U.S. Secretary of State Antony Blinken.

“Businesses, individuals, and other persons, including but not limited to investors, consultants, labor brokers, academic institutions, and research service providers with potential exposure to or connection with operations, supply chains, or laborers from the Xinjiang-region, should be aware of the significant reputational, economic, and legal risks of involvement with entities or individuals in or linked to Xinjiang that engage in human rights abuses,” the U.S. advisory said.

“Given the severity and extent of these abuses, including widespread, state-sponsored forced labor and intrusive surveillance taking place amid ongoing genocide and crimes against humanity in Xinjiang, businesses and individuals that do not exit supply chains, ventures, and/or investments connected to Xinjiang could run a high risk of violating U.S. law,” it said.

The 36-page advisory, nearly double the length of the same document issued a year ago, was issued by the U.S. State, Treasury, Commerce, and Homeland Security departments and now includes information from the Labor Department and the Office of the U.S. Trade Representative as co-signatories.

“Today’s action demonstrates the Biden-Harris Administration’s commitment to ending forced labor around the world, especially in global supply chains,” said U.S. Trade Representative Katherine Tai in a separate statement.

The advisory strengthens recommendations for companies about the risks and potential exposure related to supply chains and investment links to the XUAR, and updates the list of U.S. government enforcement actions in and in connection to the region.

U.S. firms could be exposed to Chinese human rights abuses in Xinjiang through assisting or investing in the development of surveillance tools and sourcing labor or goods from Xinjiang or other areas of the People’s Republic of China (PRC) tied to the use of Uyghur forced labor, said the advisory.

They also could be exposed by supplying U.S.-origin goods and technology to Chinese entities engaged in surveillance and forced labor practices and helping build or operate internment facilities, it said.

“The United States will continue to promote accountability for the PRC’s atrocities and other abuses through a whole-of-government effort and in close coordination with the private sector and our allies and partners,” the USTR statement said.

Washington issued the original Xinjiang Supply Chain Business Advisory in July 2020 to alert American companies about the economic, legal, and reputational risks associated with operations in the XUAR.

Genocide report, trade blacklist

The advisory comes on the heels of the July 9 update by the U.S. Commerce Department of its blacklist of Chinese companies accused of direct involvement in human rights abuses in the XUAR.

The 14 new Chinese firms added to the Entity List will face restrictions on exports and technology transfers for having “enabled Beijing’s campaign of repression, mass detention, and high-technology surveillance” against Uyghurs, Kazakhs, and others, the department said.

The U.S. government in January designated abuses in the XUAR as part of a campaign of genocide, and has since ramped up punishments against China, targeting Chinese firms that manufacture solar-panel material, wigs, electronics, tomatoes, and cotton with suspected forced Uyghur labor.

For years, Chinese authorities have subjected Uyghurs and other Turkic minorities in the XUAR to arbitrary arrests, restrictions on religious practice and culture, and a pervasive digitized surveillance system that monitors their every move using facial recognition cameras, mobile phone scans, DNA collection, and an extensive police presence.

Since 2017, Uyghurs accused of having strong religious views and politically incorrect views as well as prominent intellectuals have been jailed or detained in political internment camps in the XUAR, where they are subject to various forms of abuse.

An estimated 1.8 million Uyghurs and other Muslim minorities have been locked up in the vast network of internment camps. Studies by the U.S. government indicate that at least 100,000 workers have been subjected to forced labor in factories in industrial areas where the internment camps are located, or transferred to factories in other parts of China.

The U.S. State Department, in a report to Congress on Monday, put China on a short list of countries including Myanmar, Ethiopia, Iraq, Syria, and South Sudan that are experiencing or risk facing atrocities and crimes against humanity, reiterating Washington’s six-month-old determination of genocide in the XUAR.

“Secretary (Antony) Blinken affirmed in January 2021 that the People’s Republic of China is committing genocide and crimes against humanity against Uyghurs, who are predominantly Muslim, and members of other ethnic and religious minority groups in Xinjiang. The crimes against humanity include imprisonment, torture, enforced sterilization, and persecution,” the Elie Wiesel Genocide and Atrocities Prevention Act report stated.

China has said that the “re-education” camps are vocational training centers set up to prevent religious extremism and terrorism and denied that the Uyghurs and others are subject to maltreatment.

The State Department also will warn U.S. companies this week of the rising risks of operating in Hong Kong as China asserts more control over the financial center, The Financial Times reported Tuesday, citing three people familiar with the plan.

EU sharpens focus on supply chains

The first U.S. business advisory related to Hong Kong comes a little over a year since Beijing imposed a harsh National Security Law on the former British colony, which was followed by the arrests of scores of politicians, activists, and journalists amid sharply deteriorating civil liberties.

At a Chinese Foreign Ministry news conference in Beijing on Tuesday, spokesman Zhao Lijian denounced the U.S. moves on Xinjiang and Hong Kong.

“No matter how some in the U.S. go to great lengths along its misguided course to hype up lies on Xinjiang, their political conspiracy to disrupt Xinjiang and contain China will only end up in failure,” said Zhao.

“We always firmly oppose the U.S. interference in China’s internal affairs under the pretext of the Hong Kong issue,” he said. “The Basic Law of Hong Kong and other relevant laws clearly protect the rights and interests of foreign investors.”

The European Union issued business guidance for that region’s companies on how to identify, prevent, mitigate, and address forced labor in global supply chains. The overview of EU and international instruments on responsible business conduct that are relevant for combating forced labor did not specify regions or countries.

The EU already has mandatory standards in some sectors and promotes the effective implementation of international standards on responsible business conduct, said a statement released Friday by the European Commission (EC).

“There is no room in the world for forced labor,” said Valdis Dombrovskis, the EC’s executive vice-president and commissioner for trade. “The Commission is committed to wiping this blight out as part of our broader work to defend human rights. This is why we put strengthening the resilience and sustainability of EU supply chains at the core of our recent trade strategy.”

In June, the Inter-Parliamentary Alliance on China (IPAC), an international group of lawmakers from democratic countries focused on relations with China and the Chinese Communist Party, called on the leaders at the G7 Summit of industrialized democracies in Cornwall, England, to address Uyghur forced labor.

The G7 countries – Canada, France, Germany, Italy, Japan, the United Kingdom, and the U.S. – tasked their trade ministers with identifying areas for greater cooperation and collective efforts towards eliminating forced labor in global supply chains, ahead of a G7 Trade Ministers meeting scheduled for October 2021.

In a letter dated July 6 to French Senator Andre Gattolin, an IPAC member, French President Emmanuel Macron said that the position on China that France shares with its partners is very clear.

“The final communiqué of the G7 is in this regard without ambiguity, since it [has] asked this country to respect human rights and fundamental freedoms, in particular in Xinjiang, but also the rights, freedoms, and the high degree of autonomy of Hong Kong,” said the letter, signed by Patrick Strzoda, Macron’s chief of staff.


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Jul 13, 2021 10:25 PM

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