Airbnb hosts rentals in Xinjiang on land owned by sanctioned group

Airbnb has more than a dozen homes available for rent in China’s Xinjiang region on land owned by an organization sanctioned by the U.S. government for complicity in genocide and forced labor, an Axios investigation has revealed.

Why is this important: The ads expose Airbnb to regulatory risk under US law. They also land yet another American tech company in the crossfire between the United States and China.

  • Airbnb is one of 14 high profile sponsors of the Beijing 2022 Olympic Winter Games. A growing number of governments, including the United States and UK, said they were considering a diplomatic boycott of the Games due to the ongoing genocide in Xinjiang.

Airbnb told Axios the company believes that the sanction does not apply to these listings and that it is implementing the guidance provided by the US Department of the Treasury to comply with the sanctions.

Image: Airbnb screenshots

The big picture: China promotes tourism in Xinjiang where it is committing genocide.

  • The northwestern region of China is a popular destination for Chinese tourists, who come to enjoy the desert landscapes and a “Disneyfied“version of Uyghur culture. The regional government is development local sites by demolish traditional Uyghur neighborhoods and religious sites and replacement them with Tourist attractions.
  • Uyghurs in cities with Airbnb ads have been consistently detained in mass internment centers which are in some cases located near rental accommodation.
  • Airbnb’s operations in Xinjiang “pose an unacceptable level of regulatory and reputational risk for business in the United States,” Isaac Stone Fish, founder and CEO of Strategy Risks, a valuation firm, told Axios. risks related to China and Xinjiang. .

Where he is : Airbnb had not previously discussed the listings with the Treasury Department’s Office of Foreign Assets Control (OFAC), which is in charge respect for and application of sanctions.

  • “We take our obligation to comply with US Treasury rules very seriously. OFAC rules require Airbnb to screen the parties we deal with, not the underlying landowners,” the holder said. word of Airbnb, Christopher Nulty, in a statement provided to Axios.
  • “We screen all hosts and guests against World Government watch lists, including the OFAC Specially Designated Nationals and Blocked Persons List, including Hosts associated with lists raised by Axios,” Nulty said. .

Yes, but: While OFAC sanctions focus on financial transactions, full compliance is a complex undertaking.

  • “Sanctions compliance is not a box-checking exercise. There are other considerations in the compliance regime that go beyond simply monitoring transactions with the immediate counterparty,” said Alex Zerden, a former Treasury official who worked on sanctions and founder of the Global Magnitsky Act. at Capitol Peak Strategies, a digital asset and risk consulting firm.

Details: Axios has identified 14 Airbnb listings on land owned by the Xinjiang Production and Construction Corps (XPCC), a large paramilitary organization that has long controlled vast tracts of land, natural resources and the economy of Xinjiang.

  • Data on land holdings comes from a publicly available XPCC 2018 annual report, the most recent data available. XPCC has a decades-long history with much of this land, which is typically found in rural areas or on the outskirts of cities. Some cantons bear the name of the XPCC regiments which govern them.
  • Airbnb rental locations were determined using data from the Airbnb website. The 14 lists identified by Axios are all well within the boundaries of the lands claimed by the XPCC.
  • Five rentals are located in rural areas, heralding pastoral views and convenience for those taking a road trip. Six locations are located in the Saybag district of the regional capital Urumqi. Three are in Khorgas, a border post between China and Kazakhstan.

Background: In July 2020, the Trump administration sanctioned the XPCC under the Global Magnitsky Act for complicity in the genocide and the ongoing crackdown on ethnic minorities in the region.

  • The punishments “Prohibit all transactions” which “involve goods or interest in the property” of the XPCC.
  • The XPCC operates some of the mass internment facilities in Xinjiang where various outlets report that a million or more Uyghurs have been detained, subject to torture and indoctrination, and forced to give up their religious beliefs.
  • XPCC is also involved in the production of about a third of the region’s cotton, an industry that heavily uses forced Uyghur labor.
  • In July 2021, several US federal agencies Posted a notice to US companies, warning that continuing to operate in Xinjiang “could run a high risk of violating US law.”

How it works: OFAC relies heavily on businesses to self evaluation compliance issues, and issued a framework for companies that emphasize a “risk-based approach to sanctions compliance”.

  • In 2020, Airbnb led an internal compliance review, then voluntarily filed disclosures with OFAC on the activity of Airbnb users in Cuba and Crimea, where US sanctions are in place. The Crimea disclosures have been resolved without penalty, while those regarding Cuba are still pending.
  • “Large multinational companies have unprecedented resources to comply with OFAC and other regulations, including open source and off-the-shelf tools,” said Zerden, who is also an associate principal researcher at the Center for a New American Security.
  • The US Treasury Department declined to comment for this story.

Between the lines: Information linking many Airbnb listings to land owned by XPCC is publicly available, in some cases on Airbnb’s own website.

  • An Airbnb ad states that it is located in the Seventh Company of the XPCC Cavalry Regiment, near the scenic Nalati Grassland in Yili Prefecture, and announces that guests can experience “XPCC Cavalry Culture”.
  • One listing, the Mobei Kangyang Hotel, says it is located in an XPCC regiment on the outskirts of Shihezi town in northern Xinjiang.
  • Another rental is listed in Chinese under the name “XPCC Farmhouse”.
  • Yet another listing, a small rural hotel in northern Altay County, is job on, another booking site. There is a review States, “Come here to experience a new rural area of ​​XPCC … the host is a 75 year old XPCC retiree.”

What they say : Airbnb told Axios that those 14 listings had brought in a total of just over $ 6,500 in the past 12 months, and five of them had no reservations during that time.

  • “Stays in China have represented about 1% of our income in recent years. Although China has been a very minimal part of our financial success, we believe China is an important part of our goal of connecting people all over the world. Nulty said.

What to watch: Whether Airbnb can meet American and Chinese demands regarding its operations in Xinjiang.

  • H&M and other international clothing retailers face state-sponsored consumer boycotts in the Chinese market after publicly declared they would no longer use cotton from Xinjiang. US law prohibits the importation of products made by forced labor.
  • In November, Human Rights Watch urged Airbnb and other high profile sponsors of the 2022 Winter Olympics are lobbying China for its policies in Xinjiang. Other rights groups have called for a boycott of companies sponsoring the 2022 Olympic Games.
  • But criticizing China’s policies in Xinjiang or withdrawing Olympic sponsorship could result in a boycott of Chinese consumers or official sanction, analysts said.

The bottom line: “Airbnb serves as a stark reminder to other US companies operating in Xinjiang: it’s better to shut down operations in Xinjiang in peace, rather than risk a scandal in the United States or China,” Stone Fish said.

Shawna Chen of Axios contributed to the reports and the International Cyber ​​Policy Center at the Australian Strategic Policy Institute provided some of the data and research.

Disclosure: An Airbnb executive is a member of the Axios board of directors. One of the authors of this article owns a US property that is leased through Airbnb.

Editor’s Note: This article has been corrected to state that there are 14 top Olympic sponsors (not 13 US sponsors).

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