US judge rejects Esquel Group’s request to remove Xinjiang unit from ‘entity list’

Esquel had sought a preliminary injunction – and removal of sanctions – while it sues the US Commerce Department for acting against the subsidiary

Judge finds Esquel is not likely to succeed in that case because it fails to show the department had exceeded its authority, but company says it will appeal

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A worker at Esquel Group’s spinning mill in Changji county in the Xinjiang Uygur autonomous region. Photo: Handout

Published: 2:30am, 8 Oct 2021Updated: 10:45pm, 8 Oct 2021

A US federal judge has refused to lift trade restrictions on a subsidiary of Hong Kong-based textile company Esquel Group, which had been placed on the Commerce Department’s “entity list” for its activities in the Xinjiang Uygur autonomous region.

In his ruling on Wednesday, US District Judge Reggie B. Walton in Washington found that Esquel, one of the world’s biggest shirt makers, was not likely to succeed in its case against the department because it failed to show that Commerce had acted beyond its legal authority.

The rejection of a preliminary injunction does not kill Esquel’s case, but it dealt a blow to its subsidiary in Xinjiang, which has been unable to supply major clients like Nike, Patagonia and Tommy Hilfiger since being placed on the blacklist a year ago.

Commerce added Changji Esquel, the subsidiary, to the list a year ago, banning it from doing business in the US – part of a larger US campaign to sanction companies over alleged human rights abuses against Uygur Muslims in Xinjiang.

A cotton field in the Xinjiang Uygur autonomous region. Photo: Xinhua

At that time the unit was one of 11 Chinese companies sanctioned for alleged ties to forced labour in Xinjiang; in July, another 14 Chinese firms were sanctioned over their role in suspected human rights abuses in the region.