10 January 2022

USA passes new law against forced labour in China

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Joe Biden's administration has pushed a new law through Congress on 23 December 2021 that will come into force on 22 June 2022.

Joe Biden's administration has pushed a new law through Congress on 23 December 2021 that will come into force on 22 June 2022.

The law relates to the import into the USA of goods which are mined, produced or manufactured wholly or in part:
  • in the Xinjiang Uyghur Autonomous Region of China;

  • from entities working with the government of the Xinjiang Uyghur Autonomous Region to recruit, transport, transfer, harbour or receive forced labour from Uyghurs, Kazakhs, Tibetans, Kyrgyz or members of other persecuted groups out of Xinjiang Uyghur Autonomous Region or receive forced labour from them themselves;

  • from facilities and entities, including the Xinjiang Production and Construction Corps (XPCC), that source material from the Xinjiang Uyghur Autonomous Region;

  • from persons working with the government of the Xinjiang Uyghur Autonomous Region or XPCC for purposes of the ‘‘poverty alleviation’’ program or the ‘‘pairing-assistance’’ program or any other government labour scheme that uses forced labour;

  • goods mined, produced, or manufactured wholly or in part with forced labour by Uyghurs, Kazakhs, Kyrgyz, Tibetans, or members of other persecuted groups in any part of the People’s Republic of China.

Goods may also be covered by the Act if (only) raw materials or elements originate from these areas.

The new law requires US Customs and Border Protection (CBP) to apply a rebuttable presumption that all goods (from the above-mentioned areas and entities) are produced with forced labour and are therefore prohibited from being imported into the US. CBP will only overcome the presumption of denial if it determines that the US importer of record has complied with a due diligence and supply chain tracing outlined in the act, responded to all of CBP’s inquires, and has “clear and convincing evidence” that the goods are not mined, produced, or manufactured wholly or in part by forced labour.

A task force has been created to draft implementing regulations to this new law. The US Government is expected to publish a strategy in early February 2022 with various recommendations for the industry on how to identify, recognise and manage the problem of forced labour issues in the mentioned region as well as the mentioned entities. This regulation will provide more details as to which goods from which source are specifically affected by this new law and how to obtain an eventual presumption from CBP.

Since this import ban also affects goods that involve raw materials or components from the Xinjiang Uyghur Autonomous Region or from affected entities, this new law is global and thus also relevant for producers and traders based in Switzerland.

The MME team will be happy to assist you in identifying whether this law is relevant to you and in implementing it.

Your Team