US Customs and Border Protection (CBP) has contacted stakeholders warning them of the possible consequences of importing products where the supply chain includes North Korean workers.

SAFEGUARDS | Labor Standards NO. 177/17

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In August 2017, President Trump signed into law the Countering America’s Adversaries Through Sanctions Act (H.R. 3364). Section 321 of the act amends the North Korea Sanctions and Policy Enhancement Act of 2016, creating the presumption that any item made by North Korean citizens or nationals will automatically be categorized as being made by forced-labor.

Under the Trade Facilitation and Trade Enforcement Act of 2015, the US Customs and Border Protection Agency (CBP) has the right to seize imports that are produced using 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. As with other ‘Withhold Release Orders’ (WROs) issued since February 2016, there is a presumed assumption of guilt requiring the stakeholder to prove their innocence to release the confiscated goods. In addition, 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.

The CBP began contacting stakeholders in November 2017 as part of an initiative to proactively enforce the measure. Stakeholders will be required to prove they have taken appropriate measures to ensure their supply chains do not contain North Korean workers. 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

It has recently been reported that North Korean workers have been found at several factory sites in Europe, Asia and Africa, and their presence within the supply chain may not be readily discernable to companies operating in the US without suitable due diligence processes in place. Stakeholders should now consider their supply chain in respect to socially responsible working practices and confirm they have satisfactory measures in place to protect their business.

Through our global network of auditors, SGS offers a comprehensive range of traceability auditing services to help businesses mitigate risks relating to unethical practices. To learn more:

Next step:

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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Jean-Baptiste Molet
Consumer and Retail
Regional Manager, Supply chain Assessments & Solutions

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