New California Disclosure Requirements Regarding Slavery and Human Trafficking in Supply Chains to Take Effect on January 1, 2012

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The California Transparency in Supply Chains Act of 2010 (TSCA) will go into effect on January 1, 2012. The TSCA will require certain companies with more than $100 million in annual worldwide gross receipts that do business in California to disclose via a "conspicuous link" on their main website their efforts (if any) to address risks related to slavery and human trafficking in their supply chains. The TSCA is designed to address the difficulty of policing slavery and human-trafficking crimes by requiring companies to provide consumers with information that can be used to influence corporate policy by means of purchasing power. A similar federal bill requiring companies to disclose in their annual report filed with the Securities and Exchange Commission (SEC) their efforts to identify and address conditions of forced labor, slavery, human trafficking, and the worst forms of child labor within the companies' supply chains was introduced in the U.S. House of Representatives in August 2011.

The TSCA

The TSCA created California Civil Code Section 1714.43, which will, beginning January 1, 2012, require every retail seller and manufacturer doing business in California and having annual worldwide gross receipts that exceed $100 million to post on its website, at a minimum, the extent to which, if any, the company does each of the following with respect to its direct supply chain for tangible goods offered for sale:

Engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery. This disclosure must specify if the verification was not conducted by a third party.

Please see full article below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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