No Funds for Forced Labor Act
No Funds for Forced Labor Act would require the Secretary of the Treasury to instruct the United States’ Executive Directors at international financial institutions (IFIs) to use the United States’ voice, vote, and influence to oppose loans to projects that would use, or have a significant risk of using, forced labor—prioritizing projects in or connected to the Xinjiang Uyghur Autonomous Region (XUAR) of China or carried out by state-owned or heavily state-influenced entities there. The bill also requires each project financed by an IFI to include a project-specific explanation of how forced-labor risks were vetted and what steps were taken to mitigate or reverse those risks. It defines forced labor (including convict and indentured labor) and creates an annual reporting requirement to Congress for five years detailing project approvals with potential forced-labor risk and the US EDs’ efforts to mobilize international opposition. The bill also expresses Congress’s sense that international financial institutions should not fund entities credibly accused of forced labor and that the United States should work with allies to eradicate forced labor globally.
Key Points
- 1The No Funds for Forced Labor Act is titled and framed to prevent financing of projects that use or seriously risk using forced labor, with emphasis on projects in the Xinjiang region and entities under strong state influence there.
- 2It adds a new requirement under the International Financial Institutions Act: the Secretary of the Treasury must direct the United States Executive Directors at IFIs to oppose loans to such projects and to demand project-level explanations of vetting and mitigation efforts.
- 3It provides a formal definition of forced labor (as per the Tariff Act of 1930) and explicitly includes convict labor and indentured labor under penal sanctions.
- 4It requires annual reporting to Congress (for the next five years, starting within one year of enactment) detailing projects where forced labor could be used and outlining U.S. EDs’ efforts to persuade other countries to oppose those projects; reports must be publicly available (at least in unclassified form).
- 5It contains a “Sense of Congress” statement directing international cooperation to oppose funding of projects involving forced labor and to eliminate forced labor globally.