U.S. and multinational companies working to comply with U.S. forced labor laws and regulations should be selective in communications with Chinese contacts and companies regarding forced labor issues.
China’s Anti-Foreign Sanctions Law (AFSL) is a blocking statute passed in China on June 10, 2021. The AFSL provides the Chinese government authority to prohibit compliance with certain foreign sanctions laws, which could include UFLPA, by Chinese citizens or companies, including entities in China.
Article 3: Creates the legal framework for counter-sanctions and measures against foreign countries that impose sanctions on China.
Article 12: States that no organization or individual may carry out or assist in the implementation of discriminatorily restrictive measures adopted by foreign countries on Chinese citizens or companies.
The potential countermeasures included in the AFSL consist of lawsuits in China’s courts and placement on China’s counter-control list, resulting in repercussions such as the restriction of transactions with China, the seizure or freezing of assets within China, or the suspension of executive visas and deportation.
Communications regarding specific regions (e.g., Xinjiang) and groups of people (e.g., Uyghurs) in China may be considered discriminatory or restrictive and can create legal liability for U.S. and multinational companies, including importers, under the ASFL.
BEST PRACTICES WHEN COMMUNICATING WITH CHINESE COMPANIES
- Avoid mentioning U.S. laws, specific regions, or groups of people. Instead, refer to the International Labor Organization’s terms and guidance on forced labor.
- Continue to comply with all U.S. laws and regulations, including sanctions.
- Continue due diligence regarding forced labor in your supply chain.
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