On June 17, 2020, the President signed the Uyghur Human Rights Policy Act of 2020 (the “Act”). The stated purpose of the Act is to “direct United States resources” to address widely alleged human rights abuses and violations in the Xinjiang Uyghur Autonomous Region (“XUAR”) of the People’s Republic of China (“PRC”). The Act contains sanctions and reporting requirements targeting PRC government officials, and other individuals and companies, that the US government believes to be involved in the alleged human rights abuses and violations in XUAR.

Although the Act names two senior PRC officials, the current XUAR Party Secretary and the former XUAR Deputy Party Secretary, for crafting and implementing policies leading to human rights violations against Uyghurs and other minority groups in XUAR, the Act does not directly impose sanctions on those officials.

Sanctions Provisions

Section 6 of the Act requires the President to submit a report to Congress within 180 days of enactment, i.e., by December 14, 2020, and annually thereafter, identifying each “foreign person,” including any PRC official, that the President determines is “responsible” for any of the following sanctionable activities in XUAR:

·       Torture;

·       Cruel, inhuman, or degrading treatment or punishment;

·       Prolonged detention without charges and trial;

·       Causing the disappearance of persons by the abduction and clandestine detention of those persons; or

·       Other flagrant denial of the right to life, liberty, or the security of persons.

For each foreign person identified in the report, the Act states that the President “shall impose” either asset blocking sanctions and/or visa restrictions. However, unlike a number of recent congressional sanctions bills, including some targeting China, the Act does not require the President to impose sanctions against foreign financial institutions or others that knowingly engage in significant transactions with designated persons.

For the purposes of the Act, the term “foreign person” means a person that is not a United States person. The term “United States person” means: (a) a United States citizen or an alien lawfully admitted for permanent residence in the United States; or (b) an entity organized under the laws of the United States or any jurisdiction within the United States, including a foreign branch of such an entity.

Waivers, Exemptions, and Termination

The President may waive the application of sanctions on any foreign persons identified in the report if the President determines and certifies to Congress that a waiver is in the “national interest of the United States.”

Section 6 exempts from sanctions: (i) intelligence activities of the United States; (ii) the entry of foreign persons into the United States necessary to comply with United Nations commitments or to carry out or assist law enforcement activity in the United States; and (iii) the importation of goods into the United States.

Section 6 also authorizes the President to terminate sanctions against any foreign person named in the report upon determining and reporting to Congress:

·       Information exists that the person did not engage in any sanctionable activity;

·       The person has been prosecuted appropriately for sanctionable activity;

·       The person has credibly demonstrated a significant change in behavior, has paid an appropriate consequence for the sanctionable activity, and has credibly committed to not engage in any sanctionable activity in the future; or

·       The termination of the sanctions is in the national security interests of the United States.

Lastly, Section 6 contains a sunset provision whereby sanctions imposed pursuant to the Act will terminate by June 17, 2025.

Non-Sanctions Provisions

The Act also contains provisions to identify companies with commercial links to PRC government activities in XUAR. These provisions appear to be intended to pressure companies by implying they may be targeted with sanctions in the future if they continue to engage in such activity or by drawing public scrutiny to such activity.

PRC Companies Providing Mass Surveillance Technology

Section 9 of the Act requires the Director of National Intelligence, in coordination with the Secretary of State, to submit a report to Congress on security and economic implications of repression in XUAR which should include: (i) a description of the acquisition or development of technology by the PRC government to facilitate internment and mass surveillance in XUAR, including technology related to predictive policing and large-scale data collection and analysis; and (ii) a list of PRC companies that are involved in constructing or operating the internment camps or providing or operating mass surveillance technology in XUAR.  These reports could potentially be used as the basis for future sanctions, whether under this Act, or under other US government legal authorities, such as the Commerce Department’s Entity List, which has been used already to target multiple Chinese technology companies for alleged involvement in such activity in XUAR.

US Companies Operating in XUAR

Section 4 of the Act states that it is the sense of Congress that US companies and individuals selling goods or services or otherwise operating in XUAR “should” take steps, including in any public or financial filings, to ensure that their commercial activities are not contributing to human rights violations in XUAR or elsewhere in the PRC and their supply chains are not compromised by forced labor.

Observations

The Act will result in the creation of the first US economic sanctions program in decades that specifically targets China. While the U.S. government already had the authority to impose sanctions for the reasons covered by the Act, under the Global Magnitsky Act, the enactment of the Act is nonetheless significant because it creates a mandatory procedure for the implementation of sanctions relating to XUAR, and because of the strong political signal it sends regarding the U.S. government’s position on issues in this region.

Although the Act mandates sanctions against foreign persons determined by the President to have contributed to human rights violations in XUAR, the President will have discretion in making the determinations required to implement these sanctions. In light of recent statements by Secretary of State Pompeo condemning China’s human rights abuses in XUAR, and the use of the U.S. export controls Entity List by the US Commerce Department against Chinese companies whose technologies are used in XUAR, the Trump administration may be inclined to expand its campaign against alleged human rights abuses in the region as called for in the Act. The Act may be followed by other congressional sanctions bills targeting China, such as the Hong Kong Autonomy Act, introduced in the Senate in May 2020.