In the $768 billion U.S. defense spending bill that Congress recently passed (National Defense Authorization Act for Fiscal Year 2022, H.R.4350), there is a provision that prohibits the Defense Department from using funds under the bill for procurement of products from the Xinjiang Uyghur Autonomous Region (XUAR) that are associated with forced labor.
Specifically, the legislation mentions "products mined, produced, or manufactured wholly or in part by forced labor from XUAR or from an entity that has used labor from within or transferred from XUAR as part of a 'poverty alleviation' or 'pairing assistance' program."
To enforce this provision, the Secretary of Defense will issues rules "to require a certification from offerors for contracts with the Department of Defense stating the offeror has made a good faith effort to determine that forced labor from XUAR ... was not or will not be used in the performance of such contract."
On its face, this certification appears to be less burdensome than the rebuttable presumption that is part of the Uyghur Forced Labor Prevention Act. That legislation requires importers to provide substantial evidence that their supply chains are free of forced labor. By contrast, the defense bill provision simply asks for a "certification" of a "good faith effort" in this regard. However, the final rules issued by the Secretary of Defense may offer additional details that affect the degree of scrutiny involved here.
The full text of the provision is as follows:
SEC. 836. Prohibition on certain procurements from the Xinjiang Uyghur Autonomous Region.
(a) Prohibition on the availability of funds for certain procurements from XUAR.—None of the funds authorized to be appropriated by this Act or otherwise made available for fiscal year 2022 for the Department of Defense may be obligated or expended to procure any products mined, produced, or manufactured wholly or in part by forced labor from XUAR or from an entity that has used labor from within or transferred from XUAR as part of a “poverty alleviation” or “pairing assistance” program.
(b) Rulemaking.—The Secretary of Defense shall issue rules not later than 90 days after the date of the enactment of this Act to require a certification from offerors for contracts with the Department of Defense stating the offeror has made a good faith effort to determine that forced labor from XUAR, as described in subsection (a), was not or will not be used in the performance of such contract.
(c) Definitions.—In this section:
(1) FORCED LABOR.—The term “forced labor” means all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily.
(2) PERSON.—The term “person” means—
(A) a natural person, corporation, company, business association, partnership, society, trust, or any other nongovernmental entity, organization, or group; or
(B) any successor, subunit, parent entity, or subsidiary of, or any entity under common ownership or control with, any entity described in subparagraph (A).
(3) XUAR.—The term “XUAR” means the Xinjiang Uyghur Autonomous Region of the People’s Republic of China.