The U.S. Departments of State, Treasury, Commerce, Homeland Security and Labor and the Office of the U.S. Trade Representative (collectively, the "Departments") advised businesses of potential exposure to "reputational, economic, and legal risks" for involvement with entities that engage in human rights violations occurring within China's Xinjiang Uyghur Autonomous Region.
In an updated advisory, the Departments urged potentially exposed businesses to mitigate their risk by implementing heightened human rights due diligence policies. The Departments stressed that third-party audits are not sufficient for human rights due diligence given the harassment, undermining and surveillance of auditors. The Departments stressed that businesses maintaining supply chains and other ventures connected to Xinjiang could run a high risk of violating U.S. law, including (i) violations of statutes criminalizing forced labor, (ii) violations arising from dealings with persons targeted by U.S. economic sanctions, (iii) export control violations and (iv) violations of the prohibition of the importation of goods produced with forced labor.
In the advisory, the Departments identified the following as potential areas of exposure:
relying on labor or goods sourced in Xinjiang, given the prevalence of labor abuses in the region;
assisting in the development of surveillance tools for the People's Republic of China ("PRC") government in Xinjiang;
supplying U.S.-origin commodities to entities engaged in the abovementioned surveillance and labor abuse practices; and
aiding in the construction of (i) internment facilities used to detain minority groups or (ii) manufacturing facilities in close proximity to camps operated by PRC government-supported businesses.
OFAC designated a Chinese company and two individuals to the Specially Designated Nationals and Blocked Persons List. The designations were linked to human rights abuse in the Xinjiang Uyghur Autonomous Region.