No Funds for Forced Labor Act
- Sponsor
- Rep. Subramanyam, Suhas [D-VA-10]
- Committees
- Financial Services Committee (primary)
- Last action
- Feb 11, 2026
Bottom line
The bill leverages U.S. influence within international financial institutions to prevent the funding of projects associated with forced labor, with a specific focus on China's Xinjiang region.
What it actually does
This bill mandates the Secretary of the Treasury to direct U.S. Executive Directors at international financial institutions (IFIs) to oppose loans for projects that involve a significant risk of using forced labor, particularly those by state-owned or state-influenced entities in China's Xinjiang Uyghur Autonomous Region. It also requires IFIs to provide project-specific explanations of their forced labor risk vetting and mitigation strategies.
Proponents argue
Proponents argue this bill is a crucial step to ensure that international financial institutions, which receive U.S. taxpayer funding, do not inadvertently support or enable human rights abuses, specifically forced labor practices in regions like Xinjiang. They assert it aligns U.S. foreign policy with its values, promotes ethical supply chains, and puts pressure on regimes engaged in such practices.
Opponents contend
Opponents might argue that such a directive could complicate diplomatic relations with certain countries, potentially reduce the effectiveness of IFIs in their development mandates by introducing political conditions, or that it might be difficult to consistently and credibly vet all projects for forced labor risks without extensive and potentially intrusive oversight. Some might also argue it could be seen as overreach into the operational independence of IFIs.
The bill is very short and clear, making it highly accessible for a quick but thorough understanding.
Section 1
Short Title
This section establishes the official short title of the Act as the "No Funds for Forced Labor Act," which is how the bill would be commonly referred to if enacted.
Supporters argue
Supporters argue that a clear and concise short title helps in public discourse and legislative tracking, immediately conveying the bill's core purpose.
Critics contend
No specific opposition is typically raised against short title provisions.
Section 2
Congressional Findings on Forced Labor
This section outlines Congress's findings regarding the extensive use of forced labor, particularly in China's Xinjiang Uyghur Autonomous Region (XUAR). It cites concerns from the International Labour Organization, findings from the Congressional-Executive Commission on China, and a report detailing World Bank's International Finance Corporation clients' alleged participation in the campaign against Uyghurs.
Section 3
Congressional Stance on Funding Entities Using Forced Labor
This section expresses the sense of Congress that international financial institutions (IFIs) should not fund or provide loan guarantees to any entity credibly accused of using forced labor. It also states that the U.S. should collaborate globally to eliminate forced labor and ensure IFIs avoid funding such projects.
Section 4(a), amending Title VII of the International Financial Institutions Act
Mandate for U.S. Executive Directors to Oppose Forced Labor Projects
This is the core operative provision. It requires the Secretary of the Treasury to instruct U.S. Executive Directors at each international financial institution to use their voice, vote, and influence to oppose loans for projects that pose a significant risk of using forced labor or are carried out by state-owned/influenced entities in the Xinjiang Uyghur Autonomous Region. It also mandates that IFIs provide project-specific explanations of their vetting for forced labor risks and mitigation actions.
Section 4(a), new Section 706(b) of the International Financial Institutions Act
Definition of Forced Labor
This section defines "forced labor" by referencing section 307 of the Tariff Act of 1930 (19 U.S.C. 1307) and explicitly includes convict labor and indentured labor under penal sanctions. This ensures a consistent and broad legal interpretation of forced labor for the purposes of this Act.
Section 4(b)
Annual Report on Implementation and Efforts
This section requires the Secretary of the Treasury to submit an annual report for six years (one year after enactment, then annually for five years) to specified congressional committees. The report must detail the implementation of the Act, including projects approved by IFIs where forced labor could be used, and the U.S. Executive Directors' efforts to convince other countries to oppose such projects. The report must also be made publicly available.
Defines "forced labor" by referencing Section 307 of the Tariff Act of 1930 (19 U.S.C. 1307), which prohibits the importation of goods made with forced labor.
Section 4(a), new Section 706(b)(1)
Why it matters:This is standard legislative practice to ensure consistency with existing legal definitions and avoid redundancy, rather than being evasive.
Case for: Supporters argue that using an established legal definition ensures consistency across U.S. law and leverages existing enforcement mechanisms and interpretations, providing clarity for implementing agencies and international partners.
Case against: Critics might argue that relying on an external definition, especially one from trade law, might not perfectly capture all nuances of forced labor in the context of international financial institution lending, potentially leading to unforeseen interpretations or limitations.
Estimated impact: Ensures that the broad scope of forced labor as understood in U.S. trade law is applied to IFI lending decisions, potentially impacting a wide range of projects and industries globally.