With automakers seemingly unable to fully extradite themselves from Xinjiang, it is time to step up enforcement of trade laws.
Automakers such as BMW and Jaguar Land Rover source auto parts from Chinese suppliers that are banned for their ties to forced labor and import vehicles made with those parts into the U.S. This violates the United Nations Forced Labor Prevention Act (UFLPA), Senate Finance Committee. announced said in a new report released on Monday.
of 2 years of research Democratic committee staff said BMW, Jaguar Land Rover and Volkswagen were told by suppliers that they were sourcing auto parts made in China’s Xinjiang region by companies currently on the UFLPA Entity List. It is claimed that While Volkswagen worked to rectify the problem, BMW and Jaguar Land Rover continued to import vehicles into the United States, the report alleges.
In response, Senate Finance Committee Chairman Ron Wyden called for stronger enforcement of the UFLPA.
“Automakers are sticking their necks out and saying there is no forced labor in their supply chains,” Wyden said. stated in a statement. “Somehow, the Treasury Board’s oversight staff revealed what multibillion-dollar companies could not: imported cars from BMW, imported parts from Jaguar Land Rover, cars manufactured by VW AG. The automakers’ self-imposed regulations are clearly not working.”
UFLPA is a two-year-old law that bans all goods manufactured in China’s Xinjiang region, in whole or in part, because of the policies of the Chinese Communist Party. Prevalence of forced labor in the region. More than 1 million people are said to be detained in the region. Genocide of Uighurs by Chinese Communist Partyand many are forced to work in factories against their will.
Congress passed the UFLPA almost unanimously with the aim of encouraging companies to leave the region and relocate their supply chains elsewhere. U.S. Customs and Border Protection currently responsible for enforcing the law It also made progress in curbing imports of products made with forced labor. However, Xinjiang’s supply chains are deeply interconnected, especially in the automobile industry, and many companies have not yet severed their ties.
Now back to BMW and Jaguar Land Rover.
Senate investigators did a little detective work to trace the parts back to Xinjiang. It all started when California-based auto supplier Bourns, Inc. sourced an auto part called a LAN transformer from a Chinese company called Sichuan Jingweida Technology Group (JWD). JWD’s products are prohibited from entering the United States because they are “presumed to have been made using forced labor.” According to the committee. Mr. Bones essentially acted as an intermediary, supplying JWD parts to Lear, a direct supplier to BMW, Jaguar Land Rover and Volkswagen.
On January 3, 2024, Mr. Bones told Mr. Lear that the LAN transformer “was manufactured by JWD and is therefore prohibited on vehicles shipped to the United States.” Eight days later, Mr Lear sent letters to BMW, Jaguar Land Rover and Volkswagen “informing them of the prohibited parts”.
Now, this is where the rubber actually makes contact with the road.
Almost immediately, Volkswagen “revealed that shipments of its vehicles destined for the U.S. market contained parts manufactured by suppliers prohibited by the U.S. government under UFLPA.” BMW and Jaguar Land Rover clearly did not.
Senate investigators sent a letter to automakers in April 2024 specifically asking whether they “source parts directly or indirectly from JWD.” Jaguar Land Rover “claimed that it was not aware of any association with any manufacturer listed on the UFLPA Entity List” and BMW informed the Commission that JWD was not on their “Supplier List” did. ”
But the commission’s investigators continued to ask questions, and eventually BMW “revealed that at least 8,000 Mini Cooper vehicles equipped with JWD components had been shipped to the United States.” Not only did BMW fail to notify law enforcement authorities about its relationship with JWD, but the automaker also continued to import According to the report, vehicles built using the parts in question will not be sold until at least April 2024.
Meanwhile, Jaguar Land Rover also continued to import vehicles manufactured using banned parts until April 2024. However, the company claimed that the mistake was due to a mix-up. tell the committee Lear said he sent the letter to Jaguar’s parent company, Jaguar Land Rover Ltd., rather than Jaguar Land Rover North America, the subsidiary responsible for importing vehicles into the U.S. market.
In a statement to the New York Times, BMW said it would stop importing the banned parts and replace any vehicles containing them. Jaguar Land Rover told the New York Times: “The parts were used in older vehicles that have been discontinued and were imported only as replacements.” The UK-based company said that when it learned the parts were on the forced labor list, it immediately stopped shipping them and marked them for disposal. ”
This entire saga highlights the entrenchment of forced labor in the auto supply chain and the need for automakers to move their supply chains completely out of China as quickly as possible. Reports have revealed that automakers have been too slow to remove people from their supply chains in Xinjiang. This February 2024 report From Human Rights Watch.
It’s worth noting that the Senate Finance Committee said in its report that its findings forced it to launch its own investigation. Findings revealed in 2022 by the Helena Kennedy Center for International Justice at Sheffield Hallam University The researcher said that forced labor is so prevalent in car manufacturing that “if you have bought a car in the past five years, some of its parts were made by Uyghurs and other forced laborers in China.” It is highly likely that it was created by humans.”
And while Volkswagen appears to be the better player in this particular case, it’s worth noting that the company is Maintaining joint venture in Xinjiang. Lawmakers had previously called on German automakers to: end the operation.
Read the full Senate Finance Committee report. Insufficient diligence: Automakers are complicit in Chinese Communist Party forced labor.
