Changi Esquel Textile (CJE), a Hong Kong-based apparel company and part of the Esquel group of companies, filed for a preliminary injunction on July 19 against its placement on the Commerce Department's Entity List. The company is seeking the injunction even though it expects an announcement soon on potential changes to its status on the list, it said. "The government has informed Plaintiffs that there will likely be a development regarding CJE’s continued Entity List designation by August 1," the company said.
One of the obligations Canada and Mexico agreed to in the NAFTA rewrite is a ban on goods made with forced labor, but Baker McKenzie lawyers said it's not clear how much things are changing in that regard. Paul Burns, a Baker McKenzie partner in Toronto, said that while Canada has changed its law to ban the importation of goods made with forced labor, the Canadian customs agency does not disclose information about its enforcement. "We don’t know if there have been any detentions made," he said. "I expect there hasn't been."
The European Commission, along with the European External Action Service, released a guidance on July 12 for European Union businesses to help combat forced labor in supply chains. The guidance lays out the many EU and international mechanisms on responsible business conduct that apply to fighting forced labor. The commission also highlighted the practical considerations for supply chain due diligence, laying out the six-step framework from the Organization for Economic Cooperation and Development on proper due diligence. The steps include embedding responsible conduct into the company's policies, tracking implementation, cooperating in remediation and more. The guidance also includes a section on identifying risk factors for forced labor and other considerations for responsible business conduct.
The Airbus settlement paves the way for collaboration on shared challenges, "including those posed by the anti-competitive practices of China and other non-market economies," U.S. Trade Representative Katherine Tai said she and British Trade Secretary Liz Truss agreed during their meeting July 13. According to the USTR's readout of the meeting, both leaders "stressed the importance of fair competition in the global economy and agreed to work together both bilaterally and through multilateral fora to promote fair competition, enhance the international trade system, and address forced labor issues. Ambassador Tai and Secretary Truss committed to continue strengthening the trade and economic partnership between the United States and United Kingdom."
The U.S. updated its Xinjiang Supply Chain Business Advisory, highlighting the increasing supply chain, sanctions, labor and export control risks of doing business in the Xinjiang region. The July 13 update, which builds and expands on the original advisory issued last year (see 2007010040), says China is committing genocide through its human rights violations against Muslim minorities, provides guidance to businesses that may invest in implicated Chinese companies, updates a list of U.S. enforcement actions related to Xinjiang and "strengthens" recommendations for companies that risk doing business in the region.
The United Kingdom Foreign Affairs Committee issued a list of recommendations for how to respond to human rights violations in China's Xinjiang region in a July 8 report, “Never Again: The UK's Responsibility to Act on Atrocities in Xinjiang and Beyond.” The report looks at the multilateral system, diaspora and culture, forced labor and the private sector, technology and research, and the U.K.'s approach to atrocity prevention. Recommendations include coordinating sanctions with allies, introducing legal obligations to remove forced labor from business supply chains partnered with sanctions for noncompliance, banning U.K. entities from conducting business with Chinese companies associated with the Xinjiang atrocities, and providing access to sanctions experts for all government departments.
China’s recently passed foreign sanctions law gives it broad discretion to penalize companies for obeying U.S. and other countries' restrictions against China, although it remains unclear how China will use the new tools and what specific activities will be targeted, law firms said. Even so, businesses operating in China should closely review the new law, which passed the National People’s Congress in June (see 2106150030) and closely mirrors U.S. regulations. “It creates a menu of countersanctions available to Chinese authorities” that are “taken straight from the U.S. sanctions playbook,” Morrison & Foerster said in a June 30 post.
French prosecutors are investigating four fashion retailers accused of covering up “crimes against humanity” in China's Xinjiang region, Reuters reported July 2. The companies are Uniqlo France, Zara owner Inditex, France's SMCP and Skechers, a judicial source told Reuters. France's Central Office to Fight Crimes against Humanity, Genocide and War Crimes is conducting the inquiry. The companies said they undertake serious due diligence to ensure that there is no forced labor in their supply chains, Reuters reported.
Changji Esquel Textile (CJE), a Hong Kong-based apparel company and part of the Esquel group of companies, filed a July 6 lawsuit in the U.S. District Court for the District of Columbia to have its placement on the Commerce Department's Entity List dropped (Changji Esquel Textile Co. Ltd. et al. v. Gina M. Raimondo et al., D.C. Cir. #21-01798). The Trump administration put CJE on the list last year for alleged practices of using forced labor from the Muslim Uyghur minority population in China's Xinjiang region.
Taiwan and the U.S. had their first official meeting under the Trade and Investment Framework Agreement since 2016, and Assistant U.S. Trade Representative Terry McCartin praised Taiwan for improving its enforcement of trade secrets protections, and its plan to change its medical device approval process.