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Uyghur Forced Labour regulations – Canada & USA

Uyghur Forced Labour regulations - Canada & USA - Route Newsletter: March 2023

Both Canada and the USA have issued regulations to help fight human rights violations in China affecting Uyghurs and other ethnic minorities from the Xinjiang Uyghur Autonomous Region (UXUAR) of China.

Canada and the USA have taken measures, with a goal of preventing goods made by forced labour from entering either country.

Canada
Effective July 1st, 2020, Canada’s Customs Tariff Act and the Schedule to the Customs Tariff were amended to include a prohibition on the importation of goods produced wholly or in part by forced labour. The Government of Canada expects companies to take every step possible to ensure that their supply chains conform to Canadian law with respect to the prohibition on the import of goods produced by forced labour.

Canadian companies that are 1) sourcing directly or indirectly from Xinjiang or from entities relying on Uyghur labour, 2) established in Xinjiang, or 3) seeking to engage in the Xinjiang market, will be required to sign the Integrity Declaration on Doing Business with Xinjiang Entities prior to receiving services and support from the Trade Commissioner Service (TCS), beyond receiving a briefing of the risks of doing business in this market. Required data elements for the Integrity Declaration can be found here.

In light of the risks inherent in doing business with Xinjiang-related entities, thorough due diligence is essential. The Government of Canada urges businesses and individuals with links to Xinjiang or labourers from Xinjiang to closely examine their supply chains to ensure that their activities do not support repression, including, for example, the Chinese government’s surveillance apparatus in Xinjiang, detention or internment facilities, or the use of forced labour. Similarly, the Government of Canada encourages companies and individuals to closely examine end-users of their products and services to ensure that they are not being used to support these activities.

Canadian businesses and individuals operating in certain high-technology fields such as cameras, sensors and biometric devices may face greater risks when doing business in China, as these products are being used to arbitrarily track Uyghurs and others in Xinjiang. Businesses in these fields should exercise the highest level of due diligence and caution with respect to end-users of their products and services.

For more information about the human rights situation in Xinjiang and the risks of doing business with Xinjiang-related entities, please review Global Affairs Canada’s advisory on doing business with Xinjiang-related entities.

USA
The Uyghur Forced Labor Prevention Act (UFLPA) is a United States law aimed at addressing human rights abuses in Xinjiang, China. The law, which was first introduced in the US Congress in 2020, prohibits the importation of goods produced through forced labour in Xinjiang. The UFLPA establishes a presumption that the importation of any goods and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China is prohibited by Section 307 of the Tariff Act of 1930, and that such goods, wares, articles, and merchandise are not entitled to entry to the United States.

In June 2022, U.S. Customs and Border Protection (CBP) began issuing ‘known importer letters’ to those importers identified as possibly importing merchandise produced using forced labour, so that they may review their supply chains.

All importers are expected to review their supply chains thoroughly and institute reliable measures to ensure imported goods are not produced wholly or in part with forced labour. The UFLPA would require companies to prove that their products are not made using forced labour in Xinjiang. It would also impose penalties on companies that violate the law, including fines and restrictions on imports.

Effective March 18, 2023, as per CBP’s Uyghur Forced Labor Prevention Act Region Alert, the manufacturer’s postal code is required for goods produced in China, in order to determine if those goods may have been produced within the Xinjiang Uyghur Autonomous Region.

When reviewing supply chains related to Xinjiang, businesses should closely examine potential indicators of forced labour and other abuses, including a lack of transparency on the origins of goods, internment terminology (e.g. education training centres, vocational schools, or boarding schools/kindergartens for children), Xinjiang government incentives and factory locations (e.g. near detention or internment facilities).

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.

Quick Tip #58
Be prepared for customs penalties and fines under AMPS

Never assume that the absence of an audit means you will never be audited.  Penalties under AMPS (Administrative Monetary Penalty System) can be applied at the border at time of import (or export) and also post audit.

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