Importers of known industries where North Korean forced labor is used, such as footwear, textiles, seafood, mining, pharmaceuticals, and logging, must exert caution or be prepared to face the consequences, was the message delivered at last week’s meeting of government officials at ICE’s Intellectual Property Rights Center.
Representatives from the Departments of Homeland Security, Labor, Treasury, and State addressed the strict enforcement of CAATSA (Countering America’s Adversaries Through Sanctions Act) Section 321(b), which prohibits the importation of merchandise produced by North Korean nationals or citizens.
Section 321(b) creates a rebuttable presumption that significant goods mined, produced, or manufactured by North Koreans are products of forced labor and barred from entry into the United States. This rebuttable presumption is not limited to goods produced inside North Korea, but rather extends to all goods produced by North Koreans in any location.
Officials at the meeting, especially those from State and Labor, noted that while China and Russia are the main countries in which North Korean laborers are located, 35 countries were determined to be involved with North Korean laborers in 2017, and approximately 60 countries are currently under review for such practices.
Moreover, Section 321(b) provides that the presumption may be overcome, and goods allowed entry, only by clear and convincing evidence that the goods were not produced with convict labor, forced labor, or indentured labor.
This standard of proof is a more rigorous standard than the usual preponderance of evidence, requiring evidence demonstrating that a claim is highly probable. Officials did not articulate what type of evidence might meet this clear and convincing standard to import merchandise subject to CAATSA 321(b). Rather, they emphasized the need for well-developed policies and procedures in this area, including a rigorous supply chain assessment, the development of “best practices” for conducting due diligence on one’s suppliers, especially in high risk countries, and training at all levels and on all aspects of the program.
Failure to ensure that your supply chain is free of products of North Korean forced labor will result in seizure and forfeiture of the prohibited merchandise, civil fines, and possibly criminal prosecution.