The Court of Appeal has handed down judgment in the case of World Uyghur Congress v National Crime Agency [2024] EWCA Civ 715, which challenged the decision by the National Crime Agency (NCA) not to investigate cotton products imported from the Xinjiang Uyghur Autonomous Region (the Uyghur Region) in China.

Decision

In April 2020 the World Uyghur Congress (WUC) sent evidence to the NCA that serious human rights abuses were taking place in the Uyghur Region and that cotton from that region was likely to result from forced labour.

The Proceeds of Crime Act 2002 (POCA) makes clear that products derived from forced labour oversees can be criminal property. WUC therefore invited the NCA to investigate cotton imports from China for money laundering offences.

The NCA declined to investigate. It said that it was not required to do so unless a specific shipment of cotton had been identified as the proceeds of crime. It also said that once someone in the supply chain had paid “adequate consideration” (essentially, market value) for the product, then the product could no longer be criminal property.

Challenge

The WUC brought a judicial review of this decision. The High Court rejected their challenge. WUC appealed. At the hearing the NCA accepted that there was no requirement to identify that a specific consignment was criminal property before they could commence an investigation. In fact, the NCA said that this proposition was so obviously absurd that that was not what they had meant to say in their response to WUC’s pre-action letter. The Court disagreed – it considered that that was what the NCA meant to say.

The NCA also accepted that the possibility that someone in the supply chain had paid adequate consideration at some point is never a reason not to investigate a money laundering offence under the Proceeds of Crime Act.

Conclusion

The Court of Appeal found that both the NCA’s reasons for refusing to investigate were wrong in law. It quashed the NCA’s decision and the NCA is now required to consider whether to investigate on a lawful basis.

Implications

The implications of this judgment are significant. It is now clear that if a company buys and sells goods knowing or suspecting that they are the products of forced labour they could be investigated and prosecuted for money laundering offences under the Proceeds of Crime Act and/or their products could be confiscated. It makes no difference that someone along the way may have paid a fair price for the products.

Alice Hardy of Bindmans said: “This judgment should lead to companies taking more care to ensure that their supply chains are not tainted by forced labour or other criminal practices. The National Crime Agency did not contest that the products of forced labour are criminal products, nor that 85% of cotton from China comes from the Uyghur region where there is clear evidence of serious human rights abuses, including forced labour. This judgment is a step towards ensuring that there is an effective way to ensure that consumers in the UK are not inadvertently funding forced labour in other countries.”

Dearbhla Minogue, GLAN Senior Lawyer said, “This litigation has been critical in recognising the mass atrocities being committed against Uyghur and other Turkic Muslim people by the Chinese government, and holding to account those complicit in, or profiting from, these crimes. There is an abundance of evidence that UK companies are importing forced labour cotton from China. Following this ruling, we expect the National Crime Agency will investigate and prosecute where appropriate to prevent forced labour cotton from flooding the UK market.”

Leanna Burnard, GLAN lawyer said, “This judgment is a watershed moment for supply chains profiting from forced labour and other crimes. Where companies know or suspect they are trading the proceeds of crime, they will themselves be committing a crime whenever they transfer those goods. We hope this will mark the end of the UK market being used to launder the profits of mass atrocities, and that UK high street shoppers can expect that their purchases will no longer support the suffering of others.”

Rahima Mahmut UK Director, World Uyghur Congress said, “This is a monumental victory and a moral triumph. For far too long, there has been no international court to hold China accountable. The UK government’s lack of action forced us to pursue this case, and it is incredibly heartening to see the judges’ findings support our arguments. Our fight has not only been against genocide but also against the forced labour imposed on countless Uyghurs in East Turkestan under the suffocating CCP regime. This win represents a measure of justice for those Uyghurs and other Turkic people who have been tortured and subjected to slave labour there. We are deeply grateful to the judges who sided with us and to the brilliant lawyers from GLAN and Bindmans LLP who worked diligently on this case. Now, we urgently call on the government to implement tougher legislation.”

The World Uyghur Congress were represented by Dearbhla Minogue and Leanna Burnard of the Global Legal Action Network, supervised by Alice Hardy at Bindmans, and by a team of barristers comprising Jonathan Fisher KC, Tom Forster and Anita Clifford of 18 Red Lion Court, Russell Hopkins of Temple Garden Chambers and Admas Habteslasie of Landmark Chambers.