Customs and Border Protection, a federal agency not particularly known for its ability to analyze legal questions and follow the law, has apparently issued a statement that it will block imports of goods which were produced with any North Korean labor even though the North Korean workers were employed outside North Korea. The agency position arises from press reports that North Korean workers were employed in seafood processing plants in China that shipped salmon, squid and cod to U.S. stores, including Walmart and ALDI.

Executive Order 13570, promulgated in 2011, prohibited “the importation into the United States, directly or indirectly, of any goods, services, or technology from North Korea.” Section 510.201(c) of OFAC’s North Korea Sanctions Regulations prohibits any and all transactions that would violate Executive Order 13570 and thereby also effectively prohibits the import of goods “from North Korea” into the United States without an OFAC license. Certainly, if the squid in question were being processed in North Korea itself, the unlicensed import of the squid into the United States would violate OFAC’s rules.

But nothing in the rules or Executive Order 13570 prohibit the import of items made by North Koreans outside North Korea.  Although the North Korean Sanctions Regulations do not define “North Korea,” Section 4(d) of the Executive Order does, and that definition therefore controls.  The Executive Order defines “North Korea” as “the territory of the Democratic People’s Republic of Korea and the Government of North Korea.” It does not define North Korea to include any location where a North Korean, who is not a member of the Nork Government, just happens to be working. An item imported from China does not magically become an item from North Korea because a private Nork citizen in China touched it somewhere along the way.

This, of course, is basic Sanctions 101 and applies to all sanctions regimes. An item made in France does not come from Iran because a private Iranian citizen is employed in the French factory that produces the item. Of course, I understand the policy reasons for not wanting to import items made with Nork slave labor in China as the wages earned by these workers simply go back into Kim Jong Un’s XXXL pockets. But a new legal framework needs to be put in place to accomplish that result.

Copyright © 2017 Clif Burns. All Rights Reserved. 

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