Xinjiang Supply Chain Business Advisory

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 issued 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 (P.R.C.) 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 P.R.C. 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 P.R.C. 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.