A court recently found that UK authorities did not fetter their discretion by not investigating general cotton imports potentially produced by the forced labour of Uyghur people in China.

By Stuart Alford KC, Clare Nida, Nathan Seltzer, Paul Davies, Michael Green, James Bee, and Esha Marwaha

On 20 January 2023, the High Court ruled against human rights campaigners who argued that UK authorities were improperly allowing the import of cotton textiles made in Xinjiang, a region of China associated with alleged human rights abuses against the Uyghur people. Approximately 85% of Chinese cotton is grown in the Xinjiang Uyghur Autonomous Region (XUAR), with the “vast majority” of cotton alleged to have been produced in facilities under conditions of “detention and prison labour”.[1]

The judicial review was brought by the World Uyghur Congress (the Claimant), a non-governmental organisation seeking to promote the collective interests of the Uyghur people, against three government agencies concerned with the supervision of UK borders and imports: the UK Border Force, HM Revenue and Customs (HMRC), and the National Crime Agency (NCA) (together, the Defendants). The Claimant argued that the Defendants failed actively to investigate and thereafter prohibit the import of cotton goods originating from the XUAR due to a misinterpretation of both the Foreign Prison-Made Goods Act 1897 (FPMGA) and the Proceeds of Crime Act 2002 (POCA).

Section 1 FPMGA broadly prohibits the import of goods made wholly or partly in foreign prisons if “the evidence tendered to [HMRC]” is to their “satisfaction”.[2] Therefore, on the balance of probabilities, it must be proven that the specific consignment of goods was produced in a specific facility meeting the definition of a foreign prison. The Claimant argued that this represented an unlawful fettering of the UK Border Force’s powers under s.1 FPMGA by precluding an officer of Border Force from investigating any potential breach proactively.

The Claimant’s second argument was that the Defendants ought to have been investigating money laundering offences under POCA on the basis that cotton imports from the XUAR could constitute criminal property, and trading in them criminal conduct. The Claimant gave particular regard to s.327 POCA, the concealment of criminal property; s.328 POCA, entering into an arrangement that facilitates money laundering; and s.329 POCA, the acquisition, use, and possession of criminal property.

Proceeds of Crime Act

POCA defines criminal property broadly.

Section 340(3) POCA states that property is deemed criminal if it: (a) constitutes a person’s benefit from criminal conduct, or represents such benefit (in whole or in part, whether directly or indirectly); and (b) the alleged offender knows or suspects that it constitutes or represents such a benefit.

In turn, criminal conduct is defined in s.340(2) POCA as conduct which: (a) constitutes an offence in any part of the United Kingdom; or (b) would constitute an offence in any part of the United Kingdom if it occurred there.

This definition creates an extra-territorial element to the definition of criminal property, and activities are capable of contravening POCA even if such activities are wholly lawful in the jurisdiction where they are carried out. In this instance, the alleged offences of forced labour would be contrary to s.1 of the Modern Slavery Act 2015 and crimes against humanity would be contrary to s.51(1) of the International Criminal Court Act 2001. The Defendants accepted this could constitute criminal conduct within s.340 POCA.


Mr Justice Dove emphasised the undisputed evidence of instances of cotton being produced by forced labour in the XUAR. However, he ultimately upheld the Defendants’ decision not to launch an investigation into such cotton imports, absent sufficient specific evidence that a crime had been committed by identifiable individuals. It was significant that, in spite of what Mr Justice Dove determined to be “clear and widespread”[3] abuses in the cotton industry, no evidence existed detailing the relative proportions of goods derived from detained or force labour. The court was clear that in order for an offense to arise under FPMGA and POCA, evidence would need to link a specific consignment of XUAR cotton to either a specific facility under s.1 FPMGA or to specific evidence of criminal acts under POCA.

Still, for the purposes of POCA, the court accepted that cotton consignments from the XUAR could, in principle, constitute the proceeds of crime and, subject to the satisfaction of mens rea, importers of such consignments could face a money laundering liability. The court concluded that the most “apposite”[4] offence for this supply chain arrangement would be s.329 POCA, provided that there was no valid defence under s.329(2)(c) for adequate consideration. The court agreed with the NCA that, in order for a UK company to be prosecuted under s.329 POCA, evidence should demonstrate that the consignment had been purchased for “significantly less than its value”[5].


The court has upheld the high evidential threshold that the UK authorities must meet prior to commencing criminal investigations under POCA. However, the NCA has suggested that, should such evidence be available, it will have “no reason not to act on it”.[6] UK corporates or retailers with overseas supply chains are therefore at risk of prosecution under POCA if sufficient evidence of forced labour or other human rights abuses exists in their supply chains, and the products have been purchased materially below market value.

The same approach could be applied in the context of commodities acquired through other criminal activities, including illegal deforestation or mining, amongst others. Businesses must therefore be able to trace where products have come from and demonstrate that they have carried out adequate due diligence on their supply chains.

Mr Justice Dove also confirmed that other tools, resources, or evidence may be available to the government and law enforcement agencies “which could provide an effective basis for tackling the concerns in respect of cotton production in the XUAR and the exploitation and abuse of the Uyghur people with which it has been associated”.[7]

Multinational organisations are increasingly subject to existing and emerging laws in a number of jurisdictions which seek to introduce specific obligations on companies in relation to supply chain due diligence. In particular, the Uyghur Forced Labor Prevention Act (UFLPA) in the US (see below for further details), the German Supply Chain Act, and French Duty of Vigilance law — in addition to the proposed Corporate Sustainability Due Diligence Directive at EU level — will or do require in-scope companies to conduct detailed diligence of certain risks in their supply chain. In addition to the legal obligations under such legislation, companies may face reputational risks if they do not adequately oversee the practices of their supply chains.

Conducting additional diligence on supply chains has the potential, however, to lead to challenges in relation to UK money laundering offences. In order for a money laundering offence to be committed under POCA, the defendant must “know or suspect” that the property they acquire is, or represents, the proceeds of crime. Therefore, the more information a company acquires about the origins of its supply chains, the more likely it may be to suspect a crime, which could expose it to possible money laundering offences if it continues such imports. This potential exposure could arguably discourage such diligence and transparency; or at least create tension between a company’s supply chain diligence obligations and its money laundering exposure.

The Claimant suggested that the UK is an “international outlier”[8] in its approach towards alleged human rights abuses associated with the XUAR. In contrast, President Biden signed the UFLPA into law  on 23 December 2021 to bolster the US government’s prohibitions on the import into the US of goods produced using forced labour in or connected to the XUAR. The UFLPA introduced a “rebuttable presumption” that any goods mined, produced, or manufactured wholly or in part in the XUAR, or produced by certain entities connected to the XUAR, were produced using forced labour and therefore prohibited from import into the US by virtue of Section 307 of the Tariff Act 1930. This presumption may be rebutted, thereby allowing the goods into the US, if the importer can meet extensive requirements, including that it: (a) can demonstrate full compliance with issued guidance and regulations; (b) responds to all requests for further information; and (c) provides clear and convincing evidence that the goods were not produced, either wholly or in part, by forced labour. The UFLPA requires that the Forced Labor Enforcement Task Force publish a Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China which identifies both “cotton and cotton products” and “apparel” as high-priority sectors for enforcement in relation to alleged forced labour in China. See Latham’s blog post for further information on the UFLPA.

In addition, in September 2022, the European Commission published a proposal to ban products made using forced labour from the EU market. This proposal is not specifically focused on products connected to the XUAR (it covers goods produced globally, including within the EU), but it further highlights the increased focus in jurisdictions globally in relation to the elimination of forced labour in supply chains.

Latham & Watkins will continue to monitor developments in this area.


[1] World Uyghur Congress, R (On the Application Of) v. Secretary of State for the Home Department & Ors [2023] EWHC 88 (Admin), at [51]

[2] Foreign Prison-Made Goods Act 1897, Section 1

[3] World Uyghur Congress, R (On the Application Of) v. Secretary of State for the Home Department & Ors [2023] EWHC 88 (Admin), at [93]

[4] Ibid at [69]

[5] Ibid at [75]

[6] Liz, A (2023) “NCA eyes supply chain investigations”, Global Investigations Review, available at: https://globalinvestigationsreview.com/article/nca-eyes-supply-chain-investigations?utm_source=NCA%2Beyes%2Bsupply%2Bchain%2Binvestigations&utm_medium=email&utm_campaign=GIR%2Balerts 

[7] World Uyghur Congress, R (On the Application Of) v. Secretary of State for the Home Department & Ors [2023] EWHC 88 (Admin), at [93]

[8] World Uyghur Congress (2023), “Press Release: Judgment handed down in World Uyghur Congress case against UK Government on failure to halt imports of forced labour cotton” available at: https://www.uyghurcongress.org/en/press-release-judgment-handed-down-in-world-uyghur-congress-case-against-uk-government-on-failure-to-halt-imports-of-forced-labour-cotton/