Significant UK Ruling On The Contours Of Criminal Liability For Human Rights Abuses Occurring In Overseas Supply Chains

• Jurisdiction: United States,Federal
• Law Firm: WilmerHale
• Subject Matter: Government, Public Sector, Money Laundering, Human Rights
• Author: Mr Lloyd Firth
• Published date: 20 February 2023

A recent UK High Court decision¹ clarifies the risks for companies operating in the UK being criminally investigated in respect of forced labour and other human rights abuses occurring in their overseas supply chains.

Mr. Justice Dove's judgment was handed down following a judicial review application brought by the World Uyghur Congress (the Claimant, an NGO) against three UK government agencies concerned with the supervision of the UK's borders: His Majesty's Revenue and Customs (HMRC) and Border Force, together responsible for UK customs and revenue policy and operational matters; and the National Crime Agency (NCA), responsible for the investigation of serious and organised crime in the UK (together, the Defendant).

The Claimant's concerns centred on forced labour and other human rights abuses committed against the Uyghur people in the production of cotton in the Xinjiang Uyghur Autonomous Region of the People's Republic of China (XUAR). The cotton is then exported out of China to the UK, amongst other destinations. The Claimant's position was that the Defendant's failure to investigate the presence of cotton from the XUAR in the UK value chain stemmed from a misinterpretation of two laws: the Foreign Prison-Made Goods Act 1897 (FPMGA); and the Proceeds of Crime Act 2022 (POCA). The arguments and findings in respect of each theory of liability are considered further below.

FPMGA

The Claimant's first case theory was that the Defendant ought to have been investigating the presence of cotton from the XUAR in the UK using the powers available to it under section 1 of FPMGA and the associated power under section 139 of the Customs and Excise Management Act 1979. Section 1 of the FPMGA provides as follows (emphasis added):

'1. Prohibition of importation of foreign prison made goods.

The importation of the following goods is prohibited]; that is to say:

Goods proved to the satisfaction of the Commissioners of Customs and Excise by evidence tendered to them to have been made or produced wholly or in part in any foreign prison, goal, house of correction, or penitentiary, except goods in transit or not imported for the purposes of trade, or of a description not manufactured in the United Kingdom or originating or in free circulation in another member State.'

Justifying the decision not to investigate under section 1 of the FPMGA, the Defendant argued that the standard required to establish that the relevant goods are prison-made is high. It must be proved by...