The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned the Xinjiang Production and Construction Corps (XPCC), Sun Jinlong, a former Political Commissar of the XPCC, and Peng Jiarui, the Deputy Party Secretary and Commander of the XPCC, in connection with human rights abuses against ethnic minorities in the Xinjiang Uyghur Autonomous Region (XUAR). According to OFAC, the XPCC is a paramilitary organization in the XUAR that is subordinate to the Chinese Communist Party (CCP) – “[t]he XPCC enhances internal control over the region by advancing China’s vision of economic development in XUAR that emphasizes subordination to central planning and resource extraction.” These designations are the latest efforts by the United States to address human rights abuses in the Xinjiang region. On July 1, 2020 a multi-agency advisory was issued that warned U.S. businesses of potential supply chain risks involving the Xinjiang region (see Update of July 2020). The Department of Commerce has placed a number of Chinese companies on the Entity List (see Federal Register notices of July 22, 2020 and June 5, 2020).
As a result of this action, these persons and entity have been placed on the Specially Designated Nationals (SDN) List and all property and interests in property of the entity and individuals, and of any entities that are owned 50% or more by them, that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. In order to assist companies that may be doing business with XPCC, OFAC has issued a general license authorizing certain wind down and divestment activities involving any entity in which the XPCC owns, directly or indirectly, a 50 percent or greater interest. Activity pursuant to this general license must be concluded no later than September 30, 2020; and, U.S. persons acting under this general license must file a comprehensive report of each transaction within 10 business days after the expiration of the general license.