General

The U.S. Xinjiang-related Act came into effect on June 21, local time, and will have a wide-ranging impact on Chinese companies. In addition to the possibility that products originating in Xinjiang cannot be directly exported to the United States, companies located in other provinces and cities in China may also Exports are blocked. In order to help companies minimize the adverse effects of the Act, the Legal Affairs Department of the China Council for the Promotion of International Trade (CCPIT) held the first special situation analysis meeting on the U.S. Xinjiang-related Act on June 23. Businesses should make recommendations.

The analysis meeting invited former US Federal Attorney General Kenyen Brown, US Hughes Hubbard & Reed Law Firm Greater China Business Chairman Liu Ruoping, Beijing Dentons Senior Partner Cai Kaiming and Dow Jones Corporate Risk Compliance China Director Ma Jianxin respectively from the "US Government". Professional analysis was made from the perspectives of "Key Points of Chinese Companies' Investigation", "Interpretation of Xinjiang-related Act and Operational Guidelines", "The Latest U.S. Foreign Investment Review and Secondary Sanctions Impact on China" and "Chinese Enterprises' Compliance Response".

Representatives of enterprises in Zhejiang Province and Guangdong Province exchanged views with experts on practical issues in investment. About 1,000 people from the head of the legal department of the national trade promotion system, legal experts and business representatives attended the meeting online.

At the meeting, Shu Huan, Deputy Director of the Legal Affairs Department of the China Council for the Promotion of International Trade, said that the China Council for the Promotion of International Trade has opened a hotline for consultation through the CCPIT platform, and set up a column on the impact of the U.S. Xinjiang-related Act on enterprises, providing enterprises with news information, expert interpretation, and a series of trainings. Provide effective legal services, continuously solicit opinions from enterprises, and help enterprises to solve difficulties in an all-round way.

According to Kenyen Brown, the US Department of Justice requires companies to have a very comprehensive ESG compliance system. Therefore, Chinese enterprises exporting to the United States should not only pay attention to whether their own production lines and supply chains are compliant, but also ensure that the behavior of employees, management, and board members is compliant, so as to avoid negative public opinion and affect business operations. When Chinese companies face investigations by U.S. law enforcement agencies, they must actively communicate and cooperate with them. If it is determined that the violation is violated, rectification can be taken to strive for a lighter punishment.

Liu Ruoting said that if the goods of Chinese enterprises are detained by the U.S. Customs due to the Xinjiang-related Act, they can fight for their rights in three ways. First, to prove that the goods did not participate in the production of forced labor. If the proof is successful, the U.S. Customs will exempt the relevant goods from entering. Second, it is not within the scope of the Act to prove that the goods are not produced in whole or in part in Xinjiang, nor do they involve companies on the list. Third, before the goods are officially confiscated by U.S. Customs, the detained goods are transported away through special customs procedures.

Cai Kaiming suggested that according to the current "Xinjiang-related Act" operating guidelines and strategies, Chinese companies can benchmark well-known companies and best practices, establish their own compliance systems and social responsibility systems; Put forward requirements and manage to respond to changes in the supply chain requirements of domestic and foreign customers; timely update and adjust compliance strategies according to changes in relevant domestic and overseas regulatory regulations and regulatory priorities. At the same time, enterprises should pay attention to the list of Xinjiang-related Acts and related developments, carry out compliance work and adjust their own business in a timely manner.

Ma Jianxin reminded enterprises that they should plan ahead and take precautions before they happen. Enterprises can conduct comprehensive compliance investigations on the supply chain, sort out legal risks related to the Xinjiang-related Act, give risk reminders to suppliers’ procurement behavior, conduct compliance training or require suppliers to sign a letter of commitment to effectively control the entire business process , to reduce the negative impact of the U.S. Xinjiang-related Act.