US Customs Reminds Stakeholders of the Consequences of Importing Goods Made Using North Korean Labor

Top Quote Following a change in law regarding North Korean labor, US Customs and Border Protection (CBP) has been warning stakeholders of the possible consequences of importing products where the supply chain includes illegal labor. End Quote
  • (1888PressRelease) December 14, 2017 - US Customs and Border Protection (CBP) began contacting stakeholders in November 2017, to remind them of the possible consequences of importing products where the supply chain includes North Korean labor. Since August 2017, there has been a presumption that any item made using North Korean workers, in whichever country they may be working, is automatically classed as being made by forced-labor.

    This change comes at a time when the newspapers have reported the use of North Korean workers at several factory sites in Europe, Asia and Africa. US companies may not automatically be aware of the presence of illegal labor in their supply chain unless they carry out due diligence and have satisfactory measures in place to protect their business.

    Under the Trade Facilitation and Trade Enforcement Act of 2015, the CBP can automatically seize goods it suspects have involved the use of forced-labor. For stakeholders, this means any product where the supply chain contains North Korean workers will automatically be assumed as a product of forced-labor and will be confiscated at the point of entry. It is probable the CBP will also refer the matter to the Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) with a request to initiate a criminal investigation for violation of US law. To release confiscated goods, the onus is on the importer to prove they are innocent. Since February 2016, ‘Withhold Release Orders’ (WROs) have had a presumption of guilt upon them.

    It is therefore advisable that importers and manufacturers have appropriate measures in place to ensure their supply chains do not contain North Korean, or other forms of forced-labor. In practical terms, this means:
    • Ensuring a suitable due diligence process is in operation
    • Undertaking supply chain audits relating to social responsibility
    • Informing the CBP whether the audits are internal or involve a third-party and supplying information on when, where and the results
    • Demonstrating the measures taken to identify if North Korean nationals are involved in the supply chain
    • Furnishing the CBP with copies of audits relating to modern slavery, including findings and recommendations

    The change follows the signing into law, by President Trump, of the Countering America’s Adversaries Through Sanctions Act (H.R. 3364). Section 321, which amended the North Korea Sanctions and Policy Enhancement Act of 2016.

    Stakeholders are now advised to ensure their products comply with the latest requirements of the Trade Facilitation and Trade Enforcement Act of 2015.

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    For further information contact:
    Jean-Baptiste Molet
    Consumer and Retail
    Regional Manager, Supply Chain Assessments & Solutions
    Email: ( @ ) sgs dot com

    About SGS
    SGS is the world’s leading inspection, verification, testing and certification company. SGS is recognized as the global benchmark for quality and integrity. With more than 90,000 employees, SGS operates a network of over 2,000 offices and laboratories around the world.

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