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US issues Xinjiang Supply Chain Business Advisory

From OFAC:

Publication of Xinjiang Supply Chain Business Advisory

On July 1, the U.S. Departments of State, Commerce, Homeland Security, and Treasury issued an advisoryon the risks for businesses with potential exposure in their supply chain to entities engaged in human rights abuses in the Xinjiang Uyghur Autonomous Region (Xinjiang) . Businesses with potential exposure in their supply chain to Xinjiang or to facilities outside Xinjiang that use labor or goods from Xinjiang should be aware of the reputational, economic, and legal risks of involvement with entities that engage in human rights abuses, including but not limited to forced labor in the manufacture of goods intended for domestic and international distribution.

And from State:

The U.S. Department of State, along with the U.S. Department of the Treasury, the U.S. Department of Commerce, and the U.S. Department of Homeland Security are issuing a business advisory to caution businesses about the risks of supply chain links to entities that engage in human rights abuses, including forced labor, in the Xinjiang Uyghur Autonomous Region (Xinjiang) and elsewhere in China.

The People’s Republic of China (PRC) government continues to carry out a campaign of repression in Xinjiang, targeting Uyghurs, ethnic Kazakhs, ethnic Kyrgyz, and members of other Muslim minority groups.

The advisory highlights the risks for businesses with supply chain links to entities complicit in forced labor and other human rights abuses in Xinjiang and throughout China.  The three primary types of supply chain exposure to entities engaged in human rights abuses discussed in this advisory are:

  • Assisting in developing surveillance tools for the PRC government in Xinjiang;

  • Relying on labor or goods sourced in Xinjiang, or from factories elsewhere in China implicated in the forced labor of individuals from Xinjiang in their supply chains, given the prevalence of forced labor and other labor abuses in the region; and

  • Aiding in the construction of internment facilities used to detain Uyghurs and members of other Muslim minority groups, and/or in the construction of manufacturing facilities that are in close proximity to camps operated by businesses accepting subsidies from the PRC government to subject minority groups to forced labor.

Businesses with potential exposure in their supply chain to entities that engage in human rights abuses in Xinjiang or to facilities outside Xinjiang that use forced labor from Xinjiang in the manufacture of goods intended for domestic and international distribution should be aware of the reputational, economic, and legal risks of involvement with such entities.

In order to mitigate reputational and other risks, businesses should apply appropriate industry due diligence policies and procedures.

For more information, please visit:  www.state.gov/xinjiang-supply-chain-business-advisory/ .

So, since there is no related sanctions program for this other than the Global Magnitsky program, and there have been no designations for this yet, the purpose of this is what, exactly? To scare people off from working with these firms, in the hope that there will be a notable impact that the Chinese government will notice (and take remedial steps?) so the U.S. government doesn’t have to actually make designations?

To paraphrase the Big Bad Wolf, the U.S. will huff and puff, but the treatment of the Uyghurs will almost certainly not be blown down. A United Nations General Assembly resolution might be more constructive.

Links:

OFAC Notice

Xinjiang Supply Chain Business Advisory

State Department Press Release

Categories: Advisories Guidance Human Rights Sanctions

eric9to5

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