Washington, D.C. – A new congressional investigation has exposed significant loopholes in automakers’ oversight of their supply chains, revealing that some companies have been shipping Cars And Parts to the United States that were manufactured using components from a Chinese company banned for forced labor. The Senate Finance Committee report, spearheaded by Chair Ron Wyden, D-Ore., highlights a concerning lack of diligence from major car manufacturers in ensuring their “cars and parts” are ethically sourced.
“Automakers are burying their heads in the sand, claiming ignorance about forced labor in their supply chains,” stated Senator Wyden. “Yet, our Finance Committee staff uncovered what billion-dollar corporations apparently missed: BMW imported cars, Jaguar Land Rover imported parts, and VW AG manufactured cars, all containing components from a supplier blacklisted for utilizing Uyghur forced labor. The industry’s self-regulation is clearly failing. Customs and Border Protection must step up enforcement and crack down on companies profiting from forced labor in China.”
The comprehensive report, titled “Insufficient Diligence: Car Makers Complicit with CCP Forced Labor,” details the findings of a two-year investigation and is available for review here.
Importing goods produced with forced labor has been illegal in the U.S. since the 1930s. The Uyghur Forced Labor Prevention Act (UFLPA), enacted in 2021, further strengthened these regulations, specifically targeting the systematic, state-sponsored forced labor in China’s Xinjiang region. This act presumes that goods manufactured in Xinjiang, or by entities linked to forced labor, are prohibited from import.
Despite these legal frameworks, the investigation reveals a sluggish response from automakers in policing their supply chains to prevent “cars and parts” originating from Xinjiang and other restricted entities from entering the U.S. market. In early 2024, Volkswagen admitted that a shipment of vehicles destined for the U.S. contained parts from a supplier already banned under UFLPA.
Beyond the publicized Volkswagen case, committee staff discovered that BMW imported thousands of vehicles, and Jaguar Land Rover imported “cars and parts,” that included banned components. The investigation traced these components back to Bourns, Inc., a California-based auto supplier, which sourced parts from Sichuan Jingweida Technology Group Co., Ltd. (JWD). JWD was added to the UFLPA Entity List in December 2023, effectively banning their products due to presumed forced labor involvement. Bourns supplied these parts to Lear Corp., a direct supplier for major automakers including BMW and Jaguar Land Rover.
Lear Corp. informed BMW, Jaguar Land Rover, Volvo, and VW AG on January 11, 2024, about the prohibited JWD components, specifically LAN transformers. However, in April 2024, when questioned by the committee about direct or indirect sourcing from JWD, Jaguar Land Rover claimed ignorance, and BMW stated JWD was not on their supplier list. Only after persistent inquiries, BMW conceded that approximately 8,000 Mini Cooper cars containing JWD components had been shipped to the United States.
The report emphasizes, “BMW continued importing products from JWD until at least April 2024, seemingly halting only after repeated committee inquiries to Lear and its OEM customers, including BMW. BMW has since disclosed to CBP that vehicles and spare parts entering the U.S. market post-December 11, 2023, included LAN transformers produced by JWD.” This raises serious questions about the effectiveness of automaker’s supply chain monitoring for “cars and parts.”
To bolster enforcement of the forced labor ban within automotive supply chains, the staff report proposes several recommendations for the Department of Homeland Security (DHS) and Customs and Border Protection, including:
- Accelerating the DHS Forced Labor Enforcement Task Force’s efforts to identify and add facilities in Xinjiang utilizing forced labor to the UFLPA Entity List.
- Updating the prioritized sectors for UFLPA enforcement to reflect current risks.
- Enhancing information sharing related to UFLPA enforcement among relevant agencies and stakeholders.
- Providing clearer guidelines on the necessary audit standards for detecting forced labor in supply chains and ensuring compliance with federal laws concerning “cars and parts” and other imported goods.
These recommendations aim to strengthen the measures against forced labor and ensure that “cars and parts” entering the U.S. market are ethically produced, holding automakers accountable for the integrity of their supply chains.
