President Biden Signs Uyghur Forced Labor Prevention Act |
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By Josh Beker, Givens & Johnston
On December 23, President Biden signed a new law into effect that will ban imports of all goods made in whole or in part from any good from the Xinjiang Uyghur Autonomous Region in China, effective June 21, 2022. Specifically, the new law creates a rebuttable presumption that any product mined, produced, or manufactured in Xinjiang was made using forced labor. The bill, which passed both houses with almost unanimous support, illustrates the Government, and by extension CBP’s, willingness to use the provisions of 19 U.S.C 1307 to crack down on forced labor violators.
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The passage of this bill highlights the importance for compliance attorneys to stress to their clients the importance of conducting constant due diligence and supplier vetting of all suppliers in China, not just tier-one suppliers.
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Forced Labor is a China Wide Issue |
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While the instant bill creates a rebuttable presumption that any product from Xinjiang was made using forced labor, the passage of this bill poses a China-wide issue because Uyghur populations, and other persecuted groups, in Xinjiang do not only face forced labor conditions within Xinjiang: They also work under similar conditions at locations elsewhere in China.
The instant bill takes note of this by also prohibiting the importation of goods made by entities that work with the Xinjiang government “to recruit, transport, transfer, harbor or receive forced labor of Uyghurs, Kazakhs, Kyrgyz, or members of other persecuted groups.” This means that a company that brings Xinjiang laborers to work at a facility elsewhere in China will be treated as if it was making its products in Xinjiang.
Along with the requirement to trace the source of a company’s labor force, Importers must also be able to trace the source of raw materials, inputs, and subassemblies to ensure that no goods, wares, articles, or other merchandise were mined, produced, or manufactured wholly or in part in Xinjiang.
Attorneys should take heed of this note to realize that their client’s supplier vetting should not be limited just to Xinjiang. Instead, a comprehensive, full-scale review of all tiers of an Importer’s supply chain should actively be conducted.
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An “Irrebuttable” Rebuttable Presumption? |
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The bill states that Importers can rebut the presumption if CBP determines “by clear and convincing evidence” that the product was not made using forced labor. While this creates an “out” for Importers by informing the Trade Community what legal standard will be applied, the question remains “what constitutes clear and convincing evidence?”
The simple answer is “time will tell.” One thing however is certain: Importers with good compliance programs, compliance practices, and detailed records, that can walk a CBP Audit team through their records, will be well situated to respond.
Evidentiary considerations include the fact that CBP does not place much weight on written assurance and certifications from Chinese companies, especially in light of the fact that the Government of China, and to that degree Chinese companies, outright deny the existence of forced labor conditions in China. As recent Customs Rulings have shown, CBP is not particularly inclined to take an Importer’s word on the matter and instead requires significant evidence that every step in the production process is free of forced labor, including verified and confirmed production records, transportation documents, and supporting documents such as timecards, wage payment receipts, daily process reports, etc.
In sum, establishing “clear and convincing evidence” that a product was not made using forced labor may end up an evidentiary burden that is simply too high for Importers who are not prepared with an air-tight and thorough compliance program and associated due-diligence reports.
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Based on this bill, it is more important than ever for Importers and their counsel to conduct constant due diligence and supplier vetting of all suppliers in China, not just tier-one suppliers. This bill should not be viewed as a Xinjiang issue, but a China-wide issue that creates a heavy evidentiary burden on Importers doing business in China.
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Josh Beker started with Givens & Johnston in 2016 as a Law Clerk and has been an attorney with the firm since being admitted to the Texas Bar in 2018. During his time at Givens & Johnston, Josh has helped represent clients at all levels of industry – from the advise and planning stage, to litigation matters before the Court of Appeals for the Federal Circuit and the United States Supreme Court. Through his practice, Josh has assisted clients across a wide array of industries including: construction, oil and gas, heavy machinery, apparel, consumer electronics, and others.
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McCullough Sudan is looking for partner level attorneys in the Houston, Dallas, and Austin and beyond to join our firm. We offer flexible work from home or office opportunities.
Practice areas should include corporate, business transactions, or international law. Email us directly at info@dealfirm.com with your resume and any questions!
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McCullough Sudan is a corporate transaction law firm with current offices in Houston, Dallas and Austin. Our services include mergers and acquisitions, international business, tax, finance, fund formation, and real estate transactions.
We are looking for partner-level attorneys with about seven years or more of experience and a book of business. The ideal candidates will have a collegial personality and either a track record of business development or a stable book of business.
This position may be ideal for (i) a solo practitioner who wants the support of a team, (ii) law firm partner who wants more flexibility and autonomy in their career, or (iii) a senior corporate attorney looking for a firm where he or she can close out his or her career, or (iv) small law firms who are looking to merge to pursue growth opportunities.
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Human Rights Essay Contest |
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The International Law Section Announces Essay Contest on Topic of International Human Rights
Contest Now Open to Texas Law Students with $1,500 First Place Cash Prize
Submission Deadline: April 1, 2022
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The State Bar of Texas International Law Section is holding an essay contest on the topic of international human rights. The contest is open to individuals attending law school (including LL.M. programs) within the State of Texas and Texas residents in law school outside the state.
The essay may address any aspect of international human rights law that the student chooses and there are no minimum or maximum word limits. A first-place prize of $1,500 will be awarded for the best entry as judged by representatives from the Section.
In addition to the $1,500 prize, the winner will be recognized at the ILS Annual Institute and the winning essay will be published in a future issue of the ILS International Newsletter and on the International Bar Association’s Human Rights Law Committee’s website.
Essay submissions are due April 1, 2022 on or before 11:59 PM (Central Time) and should be sent by email attachment to Diana Marin at admin@ilstexas.org.
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