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US, UK and Canada tell shippers to stop use of Xinjiang forced labour

THE UK, US and Canadian governments have recently announced a range of new measures in relation to human rights violations alleged to be taking place in Xinjiang province, according to Chicago international law firm Baker McKenzie

24 March 2021 - 19:00
THE UK, US and Canadian governments have recently announced a range of new measures in relation to human rights violations alleged to be taking place in Xinjiang province, according to Chicago international law firm Baker McKenzie.

In response, China summoned foreign diplomats in protest after these countries jointly imposed sanctions on senior Chinese officials over alleged human rights abuses.



Chinese Foreign Ministry spokeswoman Hua Chunying called the new sanctions a 'slander and an affront to the reputation and dignity of the Chinese people'.



New Western measures include enhanced due diligence requirements for companies with links to the region in order to identify and remove the use of forced labour from their supply chains.



The move further underlines the importance of effective supply chain risk management for companies with complex global supply chains.



Primarily targeting Xinjiang province, British Foreign Secretary Dominic Raab announced measures to strengthen the operation of the UK Modern Slavery Act 2015.



It requires that businesses of GBP36 million (US$50 million) or more to produce annual modern slavery statements setting out the steps that they have taken to tackle modern slavery in their operations and supply chains.



The British Home Secretary is expected to introduce legislation in due course that sets out fines for failure to comply, introducing incentives for companies to address forced labour in their supply chains.



The UK government will also see to it that public bodies ensure non-compliant suppliers are excluded from tenders. Compliance will be mandatory for central government, non-departmental bodies, and executive agencies.



The US Government has also taken action related to allegations of forced labour in Xinjiang, adding to the compliance risks and expectations for companies doing business there and in China more broadly.



This includes the latest Withhold Release Order ('WRO') issued on January 13, 2021 by US Customs and Border Protection (CBP) against 'cotton, tomatoes and downstream products' from the Xinjiang region.



This 'applies to cotton and tomatoes grown in [the Xinjiang region] and to all products made in whole or in part using this cotton or these tomatoes, regardless of where the downstream products are produced.'



Goods subject to the WRO include 'apparel, textiles, tomato seeds, canned tomatoes, tomato sauce, and other goods made with cotton and tomatoes.' Under this WRO, all US ports are now directed to detain any shipments that have goods within the scope of the WRO.



To release shipments, importers must show proof that the products were not made with forced labour. On February 12, 2021, CBP issued what was required for proof of admissibility, and suggested due diligence steps.



The Uyghur Forced Labour Prevention Act, which passed the US House of Representatives and was pending in the US Senate in the last Congress, was reintroduced in the US Senate on January 27, 2021.



If passed into law, the Uyghur Forced Labour Prevention Act would establish a rebuttable presumption that all labour in Xinjiang is forced labour. It would also impose various US Securities and Exchange Commission disclosure requirements.



The Canadian government announced measures related to the alleged human rights issues in Xinjiang to address the risk that goods entering the Canadian supply chain may be produced using forced labour.



The Canadian government will now require Canadian companies that are sourcing directly or indirectly from Xinjiang or from entities relying on Uyghur labour established in Xinjiang, or seeking to engage in the Xinjiang market, to sign a declaration with the Trade Commissioner Service before receiving services and support from the TCS.


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