Goods from one of the world’s largest apparel makers have been effectively barred from entering the United States over suspected ties to the persecution and exploitation of Uyghurs and other Turkic Muslim minorities in China.
The Department of Homeland Security said Friday that it has “reasonable cause to believe” that Hong Kong-headquartered Esquel Group and two of its affiliates, Guangdong Esquel Textile Co. and Turpan Esquel Textile Co., source their cotton from the Xinjiang Uyghur Autonomous Region, satisfying criteria for their addition to the Entity List set up under the Uyghur Forced Labor Prevention Act and subjecting them to the law’s rebuttable presumption that their products are impermissible under Section 307 of the 1930 Tariff Act. Changji Esquel Textile Co., another subsidiary that operates a spinning mill in Xinjiang and was already facing sanctions, will grapple with the same prohibition despite migrating from one section of the list (producing goods with forced labor in Xinjiang) to another (sourcing materials from Xinjiang).
Related Stories
Secretary of Homeland Security Alejandro N. Mayorkas said that the expansion of the UFLPA Entity List enables American businesses to “better assess their supply chains and ensure they do not profit, directly or indirectly, from the use of forced labor.” He added that the department will continue to “aggressively enforce” the UFLPA and, in so doing, “stand up for human rights, safeguard a free and fair marketplace, and hold perpetrators accountable.”
Esquel Group told Sourcing Journal that it was disappointed that the U.S. government removed Changji Esquel Textile Co. from the UFLPA Entity List last month, citing a lack of evidence that it was engaged in forced labor, only to re-add it and three others for sourcing materials from Xinjiang. At one time the world’s No. 1 producer of woven shirts for boldface names such as Banana Republic, Hugo Boss and Tommy Hilfiger, Esquel Group has tried, unsuccessfully, to contest the allegations in court and reverse the move. In one lawsuit over Changji Esquel Textile Co.’s 2020 addition to the Bureau of Industry and Security Entity List, which pre-dated the UFLPA’s, it blamed the Trump administration for the “incalculable reputational and economic harm” that followed the loss of its highest-profile buyers, even from Esquel factories outside China.
“We are mystified by the decision and are working with our legal counsel for clarification,” a spokesperson said. “We morally oppose the use of forced labor, which is completely contrary to our principles and the business practices by which we have operated for more than 45 years.”
But the Council on American-Islamic Relations, a.k.a. CAIR, the largest Muslim civil rights and advocacy organization in the United States, welcomed the presumable ban last week, saying that it hopes other nations will take “similar actions to push back against the Chinese government’s genocidal actions” in Xinjiang.
Nearly 80 names have been added to the UFLPA Entity List since the law went into effect in 2022. Identifying these additional entities, the Department of Homeland Security said, provides U.S. importers with more information to assess their supply chains for signs of forced labor and ensure compliance with the UFLPA. Besides apparel and textiles, target categories include chemicals, electronics, plastics, polysilicon, household appliances and seafood. Other, less obvious ways of abetting in Beijing’s crackdown on Uyghurs, which the Chinese government has denied, are also increasingly being factored as reasons for inclusion, such as participation in state-sponsored labor transfer schemes outside Xinjiang.
“We are uncompromising in removing forced labor from U.S. supply chains,” said Robert Silvers, its undersecretary for policy, as well as chair of the multi-agency Forced Labor Enforcement Task Force. “Our enforcement efforts are yielding results. Our administration is committed to advancing this momentum and strengthening accountability across global supply chains.”
