UPDTE: The President signed the Act on Dec. 23.
The U.S. House of Representatives this week unanimously voted to pass a bill banning all imports from Xinjiang, China, unless suppliers can prove the products were not made with forced labor. The Uyghur Forced Labor Prevention Act (UFLPA) also passed the Senate Dec. 16, and President Joe Biden has already suggested he will sign it.
“We agree with Congress that action can and must be taken to hold the People’s Republic of China accountable for genocide and human rights abuses and to address forced labor in Xinjiang. That is why the Administration has already taken concrete measures including imposing visa restrictions, Global Magnitsky Act and other financial sanctions, export controls, import restrictions, and the release of a business advisory. The President also rallied the G7 to commit to ensure all global supply chains are free from the use of forced labor — including from Xinjiang. The Administration will work closely with Congress to implement this bill to ensure global supply chains are free of forced labor, while simultaneously working to on-shore and third-shore key supply chains, including semiconductors and clean energy,” said White House press secretary Jen Psaki.
The U.S. solar industry is already dealing with the effects of a Withhold Release Order (WRO) on silicon-based products made by Hoshine Silicon Industry Co., located in Xinjiang. U.S. Customs and Border Protection (CBP) released the WRO in June 2021 as a reaction to allegations of companies in the Xinjiang region using forced labor. Specifically, Hoshine makes industrial silicon that other Chinese polysilicon firms source to make solar-grade polysilicon. The WRO banned any solar panel product containing Hoshine materials from entering the United States. It’s been estimated that half of the world’s polysilicon supply comes from the Xinjiang province.
It has been reported that Chinese solar panel companies such as JinkoSolar, Canadian Solar, Trina Solar and LONGi have had materials detained under the WRO in spite of the companies claiming to not use forced labor and having material traceability guidelines as proof. The CBP released an updated WRO FAQ in November, which alludes to more lenient requirements, lessening the burden on importers. Explicitly stated now is: “an importer can lower its risk of exclusions under the Hoshine WRO if it sources polysilicon from outside of Xinjiang.”
Therefore, any full Xinjiang product ban from the U.S. government via the ULFPA should have a “modest” effect on the solar industry, said industry analysts Roth Capital Partners. Solar companies have already been maneuvering the WRO and likely have begun moving supply chains or gathering the evidence to prove their products are not made with forced labor.
UFLPA leads with a “guilty until proven innocent” presumption and will be effective 180 days after enactment. If Biden signs the bill within the next few weeks, the industry would have until June 2022 to “begin providing ‘clear and convincing evidence’ that any products originating in Xinjiang (or from certain entities) were produced free of forced labor,” Roth stated in an email.
UFLPA would be enforceable for eight years, or until the President declares that China has ended “mass internment, forced labor, and any other gross violations of human rights … in the Xinjiang Uyghur Autonomous Region.”
Abigail Ross Hopper, president and CEO for the Solar Energy Industries Association (SEIA), released a statement Thursday afternoon:
“Since October of last year, SEIA has been calling on solar companies to move their supply chains out of Xinjiang. The risks of forced labor in the region are just too high. Companies have told us that they have moved supply chains out of Xinjiang, and many are having independent third-party audits. These audits are conducted to verify that their supply chain partners do not use forced labor and that materials in solar products do not come from Xinjiang.”
Updated 3 p.m. Dec. 16 after confirmed passage in the Senate.