Industry
Insights

Members News

“Watershed moment for supply chains” – a lesson in decision making – Tristan Meears-White; Independent Consultant | Regulatory

The judgment in World Uyghur Congress v National Crime Agency is a landmark ‘monumental victory’, the ruling of which will have potential implications and considerations for anyone importing goods from overseas.

The Court of Appeal’s ruling that the National Crime Agency (“NCA”) misdirected itself in law when it chose not to investigate whether imported cotton goods were the product of forced labour or other human rights abuses has – quite properly it seems to me – been described as a ‘monumental victory’ by the Appellants.

The lessons for UK business is clear, it is time for companies to look very closely at their supply chains or risk prosecutions and/or having their goods confiscated as proceeds of crime.

Lawyers for Global Legal Action Network (“GLAN”) have described the judgement as a “watershed moment for supply chains…. trading and profiting from forced labour and other crimes all around the world”.

It is certainly the case that there are potential consequences in legal risk terms for UK companies importing and trading in what GLAN describe as “forced labour goods”. The judgement confirms that if a company knowingly or with suspicion imports goods which have been made in criminal circumstances – such as in this case through forced Uyghur labour – they could be prosecuted under the Proceeds of Crime Act for trading criminal property

This case comprised challenge of the NCA’s failure to investigate companies suspected of importing and trading in forced labour cotton. The Court of Appeal found that this refusal to investigate was unlawful and requires NCA to remake its decision. The expectation is that this decision will lead to a full investigation into imports from the Uyghur region, and perhaps increased pressure on the NCA to stop “tainted” goods entering UK markets.

The NCA’s argument was that once “adequate consideration” (i.e. market value) was paid for criminal property, the property is de facto “cleansed” of its criminal character and can be freely bought and sold without consequence. However, the Court’s view was that while a purchaser is protected when they pay adequate consideration for criminal property, as soon as they transfer that property they are then exposed to criminal liability. This means criminal property can be bought but not passed on.

The Court of Appeal ruled that the NCA had made a mistake in law by stating that a specific consignment of forced labour cotton needed to be identified in order for them to commence an investigation.

This case has particular significance insofar as the government and court readily accept that forced labour is occurring in China and that goods produced in these circumstances amount to the proceeds of crime under UK law. This was underlined by the Court of Appeal, which noted that the lower court had identified “a “striking consensus” as to the clear and widespread exploitation and abuses in that industry involving forced labour, and that forced labour accounts for a significant proportion of all cotton originating from China”.

Beyond the facts of this case, the judgement may prove to be a pivotal moment for supply chains where participants know or at least suspect they are trading in goods which are the product of forced labour or other human rights abuses. It is now absolutely clear that they will be committing criminal offences whenever they transfer those goods and can be prosecuted and/or their products could be confiscated. It makes no difference that someone along the way may have paid a fair price for the products.

There are wider political implications as this decision may well prompt authorities in other jurisdictions to review their own approach to enforcement of equivalent laws.

Experience would suggest that a good decision would be to use this case as a prompt for careful examination of supply chains; helping manage legal risk and avoiding backlash from consumers whose money may inadvertently have been funding forced labour.

If you have any questions about this case or about matters regarding supply chains and procurement, please get in touch with Tristan, or one of our  specialist Procurement Lawyers.

Related News

Keep up to date with the latest news in advanced manufacturing

July 18th 2024

Ward Hadaway has announced 13 new appointments as strong growth continues

Ward Hadaway has announced 13 new appointments across its Leeds, Manchester, and Newcastle offices, reinforcing its commitment

Read More

July 17th 2024

UK Manufacturing: Navigating Key Challenges Ahead – Rachel Skeoch; AMF Board Member

As we step into the second half of 2024, the UK manufacturing industry finds itself at a

Read More

July 17th 2024

South Tyneside Firms Pledge Support to Mental Health Project

Leading South Tyneside businesses have pledged to support a mental health project encouraging those struggling to open

Read More

Back to News

HOW WE CAN HELP

Connecting manufacturers and providing support to drive collaboration.

The AMF provides an extensive range of benefits, insightful events, and exclusive opportunities to support our members in growing and developing their businesses.

Join us

UPCOMING EVENTS

Our events provide expert insights, practical tips and advice on specialised areas

From our Monthly Meetings to our Focused Forums, each of our events sees guest speakers share their real-life experiences and first-hand knowledge of the things that effect your business. With networking and Q&As, our events allow you to connect with and learn from leading industry experts.

Find out more

15/11/2024

8:00 am

Business Improvement Forum

AMF Breakfast – Monetary Policy & Autumn Budget review

20/11/2024

12:00 pm

Monthly Meeting

AMF Monthly Meeting @ Ebac; Newton Aycliffe

28/11/2024

9:00 am

Other Event

MENE Exhibition- Manufacturing & Engineering North East

05/12/2024

10:00 am

Process Improvement Forum

AMF Process Improvement Group – Industry 4.0 (Digital Manufacturing) – Making Sense of the Madness

13/12/2024

12:30 pm

Making Owt

AMF Christmas Social – Sunderland City Hall

09/01/2025

9:30 am

Business Improvement Forum

AMF HR Forum – Retention is the New Recruitment