United States:
Anti-forced labor measures are fueling Chinese solar system suppliers
June 28, 2021
Sheppard Mullin Richter & Hampton
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- U.S. Customs postponed the import of silica-based products
of manufactured by Hoshine Silicon Industry Co. because the products
suspected of being produced with forced labor. - For future imports of solar energy systems from
Xinjiang, China, the United States may withhold approval orders
(WROs) to block entry into the United States when it is reasonable to do so
Suspected forced labor in the supply chain. - The renewable energy industry works with and with regulators
Finding ways to certify your supply chains is free
Job.
The silica products WRO
On June 24th, the White House announced the first strike against
Forced labor in solar system construction. inch
and Border Protection (CBP) have issued a Withhold Release Order (WRO).
Stop importing Hoshine silica-based products
Silicon Industry Co., Ltd. and its subsidiaries. Hoshine is located
in Xinjiang. The WRO declares that CBP has a reasonable amount of information
indicates that the company has used forced labor for its
Products. As we have reported here, the importer can obtain a goods release
subject to a WRO if the importer can provide evidence to CBP
Satisfaction that the goods were not manufactured using forced labor.
Such proof can be in the form of a certificate of origin of the
Suppliers and a supply chain audit report that is appropriate
Anti-forced labor procedures in the supply chain.
Based on the wording of the WRO, we believe it is likely that
more and more comprehensive import controls for solar critical devices
Industry can follow.
Separately, the US Department of Commerce, Bureau of Industry
and safety has named and Hoshine Silicon Industry (Shanshan)
four other companies from Xinjiang added to the Entity List. Generally no
Person may export or re-export goods, software or technology
are subject to US export controls for Ent companies
List.
Finally, the U.S. Department of Labor issued a notice that
updates its "List of Goods Manufactured by Child Labor or Forced Labor"
Laboratory. "This list now includes polysilicon, the one with
Forced labor in the PRC. Usually the Ministry of Labor updates
his list every two years. The fact that this is the first update
outside of this two-year cycle shows how serious the
Biden's government takes on the ongoing human rights violations
Uyghurs and other minority groups in Xinjiang. It also signals that
further restrictions on imports from and trade with Xinjiang
Region are expected to follow.
What is a WRO?
CBP can refuse to release imported goods if information
“Reasonable but not conclusive” means that the
Goods were produced with compulsion
Labor.1 Forced labor is defined as “all work
or services requested from any person under threat from anyone
Penalty for its non-performance and for that of the employee not
volunteer "as well as forced child labor or
contractual child labor 2
A WRO prevents the goods from entering the United States.
Importers have two options: Either export the shipments back out
the United States or provide information demonstrating that the goods
were not made with forced labor. When an importer pursues the latter
Option, must do this within 3 months of import and one
Certificate of origin as well as a detailed explanation of the evidence
that the goods in question were not manufactured using forced labor,
B. a supply chain audit report.
Further measures against forced labor are to follow
Bills that would work their way through the US House of Representatives and the US Senate
impose various restrictions related to China's Xinjiang Uyghurs
Autonomous Region, including the ban on certain imports
Xinjiang and impose sanctions on those responsible for human
Infringements there.
Legislation or other measures of the executive branch could die
Entry into the United States of goods sold in
Xinjiang, unless CBP (1) determines that the goods are not
produced by convict labor, forced labor or contract labor
under criminal penalties; and (2) reports such a finding
Congress and to the public.
In addition, the legislation could be issued by issuers
Securities to file annual or quarterly reports with the Securities
Exchange commission for the disclosure of cases in which the issuer
knowingly participate in activities related to Xinjiang, such as:
with a facility that establishes detention facilities or surveillance
Systems there. The President would then review these disclosures in order
decide whether sanctions or criminal charges are warranted.
How the renewable energy industry is responding
We know the associations of the US renewable energy industry
cooperate with foreign suppliers of modules and others
Silica based goods. The aim is to identify suppliers who are capable
to certify that their goods are free from forced labor and
these suppliers to adequately document their processes.
From our point of view, these efforts are important. A problem,
however, is that CBP is poorly staffed to respond to forced labor
Large Scale Problems and the Timing of Renewable Energy in the US
Project imports are often scarce. So it remains to be seen whether
proactive solutions can be established in good time on the right scale,
to protect future imports to supply industry.
Footnotes
1 19 CFR § 12.42 (e)
2 19 CFR § 12.42 (a).
The content of this article is intended to be general
Instructions on the subject. Expert advice should be sought
about your particular circumstances.
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