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U.S. Issues Xinjiang Supply Chain Business Advisory


An OFILM factory in Nanchang in eastern China's Jiangxi province. (File}

The U.S. government has cautioned U.S. companies about the supply chain links to entities that engage in human rights abuses in China.

U.S. Issues Xinjiang Supply Chain Business Advisory
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The U.S. Departments of State, Treasury, Commerce, and Homeland Security have issued a business advisory cautioning U.S. companies about the reputational, economic, and legal risks of supply chain links to entities that engage in human rights abuses, including forced labor in Xinjiang and elsewhere in China.

Since April 2017, the People’s Republic of China (PRC) has ramped up its campaign of systematic repression of Uighurs and members of other Muslim minority groups that includes widespread arbitrary detention, coercive population control, and forced labor. Targeted against ethnic and religious minorities, China’s use of forced labor is no longer confined to the Xinjiang region but is increasingly taking place across the country, warned Secretary Pompeo.

The advisory warns U.S. businesses about three main types of supply chain exposure to entities engaged in human rights abuses. The first is assisting in developing surveillance tools for the PRC government in Xinjiang. The second is relying on labor or goods sourced in Xinjiang, or from companies elsewhere in China that may be implicated in forced labor in their supply chains.

The final most common supply chain exposure to entities engaged in human rights abuses comes in the form of aiding in the construction of internment camps used for the detention of Uighurs and members of other minority groups and/or the construction of manufacturing facilities that are near forced labor camps.

In a letter to U.S. business leaders, Under Secretary of State for Economic Growth, Energy, and the Environment Keith Krach, urged corporate responsibility. “Today this means refusing to participate in human rights violations and deals that, in the words of Secretary of State Pompeo, ‘tighten a regime’s grip of repression.’”

Under Secretary Krach called on the board of directors for each American company that does business in China to conduct a detailed analysis of the supply chain to reveal who their company is buying from and who it is selling to.

“I am confident,” wrote Under Secretary Krach, “that [the American] business community will reject any involvement or association with the oppression in Xinjiang – first, because it is the right thing to do, and second, because of the significant legal and business risks involved.”

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