China Retaliates Against UFLPA Entity List Additions, Restricts Trade With 6 Textile-related Firms

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China Retaliates Against UFLPA Entity List Additions, Restricts Trade With 6 Textile-related Firms

By

Arthur Zaczkiewicz

Arthur Zaczkiewicz

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China Retaliates Against UFLPA Entity List Additions, Restricts Trade With 6 Textile-related Firms

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China ’s response to the U.S. adding 43 Chinese companies to the Uyghur Forced Labor Prevention Act Entity List on July 31, which became effective on Aug. 3, was to bar Chinese businesses, organizations and individuals from conducting business and even cooperating with seven U.S. companies and organizations.

Six of the companies listed work in the textiles and apparel industries. The implications of China ’s move are likely to make supply chain verification much more difficult for companies doing business in the country.

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The 43 additions to the UFLPA Entity List reflect a 30 percent increase and is also the roster’s largest expansion yet of companies targeted by the U.S. over the persecution of Muslim minorities in China’s Xinjiang region. The Department of Homeland Security announced the additions on behalf of the interagency Forced Labor Enforcement Task Force, or FLETF.

The DHS said the Customs and Border Protection will apply a “rebuttable presumption” barring goods that are produced by the 43 companies from coming into the U.S. due to activities that include sourcing materials from Xinjiang or working with authorities there to recruit, transport, transfer, harbor and also receive Uyghurs, Kazakhs, Kyrgyz or members of other marginalized ethnic groups.

A spokesperson for the Ministry of Commerce, People’s Republic of China, said in a statement that the U.S. action “has no basis in fact, as the U.S. has continued to use so-called ‘human rights’ and ‘forced labor’ as pretexts for arbitrarily imposing unilateral sanctions on Chinese companies under its domestic laws, which constitutes a typical act of economic coercion.”

The spokesperson said the move “has seriously undermined the legitimate rights and interests of the companies concerned and severely disrupted the stability of global industrial and supply chains.”

The six companies in the textile and apparel industry cited by China is a mix of material science, technology and nonprofits.

The list includes Altana Technologies , a supply chain intelligence and AI platform that builds dynamic, connected maps of global commerce. Altana aggregates billions of commercial and logistics data points so textile brands and government regulators can have deep visibility into multitier supply networks.

In apparel, the company’s platform maps trading relationships down to tier-three and tier-four suppliers, which enables companies to identify forced labor risks and meet strict regulatory compliance such as UFLPA.

Also on the list is the Responsible Business Alliance, which is a nonprofit industry coalition dedicated to corporate social responsibility, human rights and environmental sustainability in global supply chains. The organization offers standardized assessment tools and factory audits as well as worker welfare guidelines to help apparel brands ensure safe working conditions, fair labor practices and environmentally sound manufacturing.

Verité Group is on the list. The group is a global nonprofit dedicated to ensuring fair, safe and legal labor conditions worldwide. Verité acts as a key adviser and auditor for apparel brands navigating human rights risks. They also conduct independent supply chain assessments, field-based worker interviews and research on forced labor, human trafficking, child labor and debt bondage in garment factories and raw material sourcing such as leather and cotton.

Human Rights in China was also cited. HRIC is an NGO focused on monitoring, researching and advocating for international human rights in China. Their work informs global apparel brands, policymakers and international trade bodies about human rights abuses and supply chain exposures to forced labor in cotton harvesting as well as garment manufacturing and compliance requirements.

Stratum Reservoir, the lab-testing company that offers its Isotech platform, was also named. The company specializes in stable isotope geochemistry and performs origin authentication testing on natural fibers such as cotton. The forensic evidence can be used to prove or disprove a fabric’s geographic origin, which helps apparel brands adhere to U.S. Customs trade enforcement laws.

Lastly, Applied DNA Sciences was named, too. The company had been utilizing its proprietary platform (such as CertainT and SigNature) to inject unique, molecular-level DNA tags into raw fibers, such as cotton and synthetic materials, at a point of origin.

However, last fall the company walked away from this work and announced a new name, BNB Plus Corp., and is now offering blockchain services in the Binance space, one of the world’s largest cryptocurrency exchanges.

“Alongside the rebrand, the company also announced the appointment of Josh Kruger as chairman of the board,” the company said in a statement in November. BNB Plus Corp. said Kruger has deep expertise in managing blockchain-native assets for yield and capital efficiency.

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