No Funds for Forced Labor Act
- Bill Number
- S. 1685
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- International Affairs
- Status
- Introduced
- Latest Action
- 2025-05-08: Read twice and referred to the Committee on Foreign Relations.
- Last Updated
- 2026-02-24T18:10:49Z
AI-Generated Summary
Purpose of the Legislation
The "No Funds for Forced Labor Act" (S. 1685) aims to prevent international financial institutions (IFIs), such as the World Bank, from providing loans or funding to projects that involve or risk involving forced labor. It focuses particularly on forced labor in China's Xinjiang Uyghur Autonomous Region and directs the U.S. to use its influence in these institutions to oppose such funding, promoting global efforts to eliminate forced labor.
Key Provisions
- Findings Section: Highlights evidence of forced labor in Xinjiang, including reports from the International Labour Organization (ILO) expressing "deep concern," the Congressional-Executive Commission on China (CECC) documenting a system of forced labor targeting Uyghur and other Turkic/Muslim individuals, and an Atlantic Council report on the International Finance Corporation (IFC) clients linked to China's campaign against Uyghurs.
- Sense of Congress: States that IFIs should not fund, finance, or guarantee loans to entities credibly accused of forced labor, and the U.S. should collaborate with allies and other countries to eradicate forced labor worldwide.
- Opposition to Loans:
- Requires the Secretary of the Treasury to instruct U.S. Executive Directors at IFIs to oppose loans for projects that:
- Pose a significant risk of using forced labor (defined as labor obtained through coercion, including convict labor or indentured labor under penal sanctions, per the Tariff Act of 1930).
- Are carried out by state-owned or heavily state-influenced entities in Xinjiang.
- Mandates that IFIs provide project-specific explanations on how they have assessed forced labor risks and taken steps to mitigate, track, and address them.
- Reporting Requirements:
- The Treasury Secretary must submit annual reports to congressional committees (House Financial Services and Foreign Affairs; Senate Foreign Relations and Banking, Housing, and Urban Affairs) for five years, detailing:
- Any IFI-approved projects where forced labor might be used.
- U.S. efforts to persuade other countries to oppose such projects.
- Reports (or unclassified versions) must be made publicly available.
Significant Changes to Existing Law
- Amends Title VII of the International Financial Institutions Act (22 U.S.C. 262d et al.) by adding a new section (SEC. 706), which introduces mandatory U.S. opposition to IFI loans involving forced labor risks and requires transparency from IFIs on risk assessments.
- This builds on existing U.S. laws like the Uyghur Forced Labor Prevention Act but extends U.S. influence specifically to multilateral IFIs, rather than just domestic or bilateral trade.
Potential Impacts
- On Government Agencies: The U.S. Department of the Treasury gains new responsibilities to direct U.S. representatives at IFIs and produce detailed reports, potentially increasing administrative workload and coordination with Congress.
- On Citizens: Indirectly benefits global human rights by reducing financial support for forced labor systems, which could protect vulnerable workers (e.g., Uyghurs) from exploitation; U.S. taxpayers, as contributors to IFIs, may see their funds used more ethically.
- On International Relations: Could strain U.S.-China ties by targeting Xinjiang-related projects, but strengthens U.S. leadership in human rights alliances; may encourage other countries to adopt similar stances in IFIs, fostering multilateral anti-forced labor efforts while risking IFI project delays or vetoes.
Main Stakeholders Affected
- U.S. Government: Treasury Department (implementation and reporting); Congress (oversight via committees); U.S. Executive Directors at IFIs (voting and advocacy roles).
- International Financial Institutions: World Bank, IFC, and similar bodies (required to enhance vetting and provide explanations, facing U.S.-led opposition to certain loans).
- Foreign Entities: State-owned or influenced companies in Xinjiang, China (potential loss of funding); broader Chinese government (challenged on human rights practices).
- Global Actors: Allies and partner countries (encouraged to join U.S. opposition); workers and communities in high-risk areas (potential protection from forced labor); NGOs and human rights groups (empowered by transparency requirements).
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces U.S. anti-forced labor framework by linking it to IFI governance, potentially setting precedents for conditioning multilateral funding on human rights compliance; the forced labor definition aligns with trade laws, ensuring consistency without creating new enforcement mechanisms.
- Constitutional: No direct challenges, as it involves foreign affairs and congressional authority over appropriations/international agreements (Article I, Section 8); upholds executive discretion in Treasury instructions while mandating congressional reporting for accountability.
- Political: Signals bipartisan U.S. commitment to countering forced labor (introduced by Sens. Scott and Merkley), amplifying pressure on China amid ongoing geopolitical tensions; could politicize IFI decisions, complicating consensus among member nations, but bolsters U.S. soft power in promoting labor standards globally.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2025-05-08: Read twice and referred to the Committee on Foreign Relations.
- 2025-05-08: Introduced in Senate
Bill Versions
- No Funds for Forced Labor Act — issued 2025-05-08 — PDF (5 pages)