Earlier this month, the Court of Appeal gave judgment on a judicial review brought by campaigners for Uyghur rights, which will have major implications for many UK retailers.
There is significant evidence that the Uyghur people, as well as other ethnic and religious minorities, have been subjected to severe human rights violations by the Chinese government since 2014, including mass internment, violent persecution and forced labour. The World Uyghur Congress submitted a report to the UK National Crime Agency in a bid to persuade the NCA to investigate whether cotton goods imported into the UK were the product of such forced labour. The NCA declined to do so, arguing that once any goods were traded for market value, they were no longer criminal property. The World Uyghur Congress has now successfully challenged this decision.
Our Business Crime team have produced a detailed summary here. In summary, the Court of Appeal found that the defence of “adequate consideration” protects a purchaser of criminally-tainted goods, but doesn't protect them if they go on to supply the goods to a third party. This means that UK businesses which buy and then sell goods created through forced labour could face criminal investigation and prosecution, as well as enforcement action by the NCA. The case also highlights the ability of campaigning groups to use proceeds of crime laws to force UK authorities to take action.
This decision could have a serious impact on UK retailers of all varieties. One fifth of the world's cotton comes from Xinjiang, where some of the worst abuses have been alleged, while there are forced labour concerns over a multitude of other imported products. Since the Modern Slavery Act 2015 came into force nearly a decade ago, it's been seen as largely toothless when it comes to corporate liability, with an obligation to report rather than take actual steps to eliminate slavery and other abuses in supply chains. Even those modest requirements are frequently flouted by some businesses, with the Business and Human Rights reporting widespread non-compliance. This case changes that - it provides a route for holding UK retailers liable for such abuses.
Businesses (particularly those which rely on imported products) should scrutinise their supply chains carefully, and on an ongoing basis, and take swift and effective action where forced labour is suspected.
Want to hear more from us? 
