New Forced Labor Prevention act goes into effect June 21
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Starting tomorrow, the United States claims the right to seize goods imported from China's Xinjiang region. The United States will take those goods unless companies can show they were not built with forced labor. That new law is designed to counter human rights abuses against the Uyghur minority. NPR's Emily Feng reports.
EMILY FENG, BYLINE: Entrepreneur Shi Zhengrong lights up when he remembers how he started China's first solar panel behemoth, Suntech Power.
SHI ZHENGRONG: And I was part suspicious in the beginning because I just saw how common in China there was no money, and also there was no supply chain - all right - and no capital.
FENG: Fast-forward two decades, and Shi's dream came true.
SHI: From 20, I believe, 2015, China has been the largest market in the world, almost, like, 50% of the global market.
FENG: Newer Chinese companies later eclipsed Suntech, but it helped pave the way for China to dominate solar power production, from refining the raw polysilicon material the panels are made of to actually fabricating the panels themselves before they're shipped to customers from California to Connecticut. Except now the U.S. is concerned about how these panels are made.
RICHARD MOJICA: So Customs has been detaining merchandise - apparel products over concerns over the cotton, solar products over concerns over the polysilicon.
FENG: Richard Mojica is a customs-focused lawyer at Washington firm Miller and Chevalier, and he explains that the Uyghur Forced Labor Prevention Act now allows customs officials to seize any shipment coming from Xinjiang.
MOJICA: And the burden of proof then shifts to the importer to demonstrate that the merchandise was, in fact, not made with forced labor.
FENG: These are not the first sanctions the U.S. has put on Chinese goods it suspects are made with forced labor - for example, a U.S. Commerce investigation this spring into Chinese solar panel supply chains after a U.S. business complaint has already halted hundreds of U.S. solar energy projects.
MOJICA: Some companies have shifted their supply chains away from the Xinjiang area and from China generally.
FENG: Because proving the absence of something is really difficult. And the Uyghur Forced Labor Prevention Act is designed so that the bar for proving your goods are made with voluntary work is exceptionally high. American importers buying cotton, for example, have already beefed up documentation that shows their stuff is not contraband, using lab analyses.
MOJICA: That purport to measure the DNA, so to speak, or the fingerprint of the cotton used. You can get lab reports that will tell you this cotton comes from China or doesn't come from China.
FENG: NPR called 40 Chinese polysilicon makers. All said they either had stopped selling to U.S. importers or stopped making expensive polysilicon altogether. But there are lots of other Xinjiang goods now in the crosshairs of U.S. regulators - for example, the aluminum in our cars or the rayon in our clothes.
LEONARDO BONANNI: When you're talking about a multinational company, that means that there are thousands, sometimes tens or hundreds of thousands, of suppliers that they depend on.
FENG: Leonardo Bonanni is CEO of Sourcemap, a software company that does supply chain mapping. It's a service most big retailers now use to identify who is making every piece of their wares. But he says to meet U.S. auditing requirements, importers will need people on the ground in Xinjiang verifying supply chains, something the Chinese government has not allowed.
BONANNI: It's a burden to prove something that is virtually impossible to prove because there is so little auditing that is being done on the ground in the region.
FENG: Meaning U.S. law now in practice has put a blanket ban on goods from Xinjiang.
Emily Feng, NPR News.
(SOUNDBITE OF TYCHO'S "RECEIVER") Transcript provided by NPR, Copyright NPR.