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Forced labour and sanctions screening of Chinese suppliers (2026)

Last updated: · By Sarah Liu, Thornfield Resources

Short answer: checking a Chinese supplier's name against a sanctions list is only the start. UK sanctions also catch companies owned or controlled by a designated person, even when those companies are not listed. On forced labour, the EU will ban products made with it from 14 December 2027, the US already presumes that goods from Xinjiang or from listed entities are made with it, and large UK companies must report what they do about it. A sound screen covers the supplier, its owners, its locations and the origin of its raw materials, and records what could not be confirmed. A qualified lawyer should advise on your own legal obligations.

Why this lands on the buyer

  • Sanctions are strict. Dealing with a company owned or controlled by a designated person can be a breach, even if its own name appears on no list.
  • Forced-labour rules target products. Under the EU and US rules, it is the goods that get stopped, wherever in the supply chain the forced labour happened.
  • Regulators look at what you did. OFSI says it considers a company's due diligence when it assesses a breach, and EU guidance treats documented efforts as useful evidence in an investigation.

The rules at a glance

RuleWho it applies toFrom whenWhat buyers must do
UK Sanctions List and ownership and control testUK individuals and businessesSingle list since 28 January 2026Screen suppliers and their owners against the UK Sanctions List, not the closed OFSI Consolidated List
Modern Slavery Act 2015, section 54Commercial organisations doing business in the UK with total turnover of £36 million or moreIn force; reforms proposed in a bill introduced 30 June 2026Publish an annual statement on steps taken in operations and supply chains
EU Forced Labour Regulation (EU) 2024/3015Any operator placing products on the EU market or exporting them from it, including goods made outside the EU14 December 2027Be able to show where products and their inputs come from; banned goods must be withdrawn
US Uyghur Forced Labor Prevention Act (UFLPA)Goods imported into the United States21 June 2022Prove by clear and convincing evidence that Xinjiang-linked or Entity List goods are not made with forced labour
EU CSDDD, as amended by Omnibus ICompanies with 5,000+ employees and €1.5 billion+ turnover; non-EU groups above €1.5 billion EU turnover26 July 2029Risk-based human rights and environmental due diligence across the value chain

Sanctions: the name check is not enough

Since 9am on 28 January 2026, the UK Sanctions List is the only list of UK designations. The OFSI Consolidated List is closed and no longer updated, so any screening tool still using it is out of date. UK designations include Chinese entities: in June 2026, for example, the UK sanctioned Chinese companies accused of supplying military equipment to Russia.

Under OFSI guidance, a company is owned or controlled by a designated person if that person holds, directly or indirectly, more than 50% of its shares or voting rights, can appoint or remove a majority of its board, or could reasonably be expected to make the company act as they wish. Such a company is subject to the same financial sanctions, even though it is not listed. OFSI ran a call for evidence on changing the test, which closed on 20 April 2026. No change is in force.

Forced labour: three different approaches

  • UK: transparency. The Modern Slavery Act is a reporting duty, not an import ban. The Immigration and Asylum Bill, introduced on 30 June 2026, would make set content mandatory, require statements to be filed on the government registry, and add fines of up to £1 million or 1% of turnover, whichever is higher. It is not yet law.
  • EU: a product ban. From 14 December 2027, products made with forced labour cannot be placed on, made available on, or exported from the EU market. It covers all products and sectors, and goods already in EU warehouses on that date. The Commission published guidelines in 2026. Due diligence is not a formal duty, but documented checks count as evidence. UK companies selling into the EU should expect EU customers to ask for supply chain proof.
  • US: a presumption. Under the UFLPA, goods made wholly or partly in Xinjiang, or by an entity on the UFLPA Entity List, are presumed to be made with forced labour and barred from US import. The Entity List reached 187 entities after 43 were added in August 2026, the largest single expansion so far. It matters to you if your goods, or your customer's goods, end up in the US.

The EU CSDDD was cut back by the Omnibus I directive, published on 26 February 2026. It now covers only very large companies, applies from 26 July 2029, and no longer has an EU-wide civil liability regime. Most mid-sized buyers are outside its scope, but their large customers may not be.

The China side: the Anti-Foreign Sanctions Law

China's Anti-Foreign Sanctions Law took effect on 10 June 2021. Its implementing regulations, issued by the State Council on 23 March 2025, took effect immediately. They allow inquiries and correction orders against those who implement or help implement foreign "discriminatory restrictive measures" against Chinese parties, and encourage Chinese parties to sue in Chinese courts. For a buyer, this means that how you end a relationship with a Chinese supplier on compliance grounds matters. Take advice from a qualified lawyer before you act.

What can practically be screened

  • Names on lists: the supplier, its Chinese legal name and its known trading names against the UK Sanctions List, EU and US lists, and the UFLPA Entity List.
  • Ownership chains: shareholders on the official register, followed up the chain (see who owns a Chinese company).
  • Locations: registered address, factories, branches and subsidiaries in Xinjiang.
  • Raw-material origin: US enforcement priority sectors include cotton, tomatoes, polysilicon, aluminium and PVC, plus apparel, seafood, caustic soda, copper, lithium, steel and red dates. Ask for the supplier's own suppliers and chain-of-custody documents.
  • Audits, with limits: the US enforcement strategy says auditing in Xinjiang is extremely difficult and that an audit alone does not show due diligence. A credible audit needs unannounced visits and access to areas such as dormitories.

A practical screening sequence

  1. Confirm the supplier's exact Chinese legal name and 18-character credit code.
  2. Screen that name and its trading names against the UK Sanctions List and other relevant lists.
  3. Trace shareholders and controllers, and screen each one. Check for holdings above 50% and for signs of control.
  4. List every production site and related company, and flag any Xinjiang link.
  5. Identify high-risk inputs and ask where they come from, with documents.
  6. Record what you checked, what you found and what could not be confirmed. Repeat when lists or ownership change.

How we help

We are independent and paid only by our clients, never by factories. A Supplier Check (from £175) confirms the company is real and covers list screening and the first layer of ownership. For a major contract or a high-risk product, Enhanced Due Diligence (from £2,500) traces ownership as far as the records go, checks sites and related companies for Xinjiang links, reviews raw-material origin evidence and gives you a written record of what was and was not confirmed.

Frequently asked questions

My supplier is not on any sanctions list. Am I safe?

Not necessarily. Under UK rules, a company owned or controlled by a designated person is subject to the same sanctions, even if unlisted. You need to check who owns and controls it.

Does the EU forced-labour ban affect UK companies?

Yes, if you sell products into the EU. The regulation covers all products placed on the EU market, wherever they were made, from 14 December 2027.

Is a clean social audit enough?

No. Audits can miss forced labour, especially where access is restricted. US guidance says an audit alone does not demonstrate due diligence. Combine it with ownership, location and raw-material checks.

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