U.K. forced labor ruling raises bar for supply chain monitoring

Companies will need to tighten up how they monitor their supply chains after a recent U.K. ruling determined that corporates could be open to money laundering charges if they fail to act in cases where they believe there is a risk of forced labor.

In a legal challenge brought by the Global Legal Action Network and the World Uyghur Congress, the U.K.’s Court of Appeal ruled that companies can be prosecuted under the Proceeds of Crime Act (POCA) if they know—or suspect—to have imported goods made in criminal circumstances elsewhere in the supply chain, like forced Uyghur labor in China.

Lawyers said this is the first time that a U.K. court has decided that ordinary commercial trade could amount to a money laundering offense if there is criminality in the supply chain.