Importers are increasingly concerned over the potential impact of North Korean sanctions on imported products from China or elsewhere. A broad sanctions bill (HR 3364) was signed into U.S. law in early August. It includes criminal penalties against any person importing products made in whole or in part by North Korean labor! It also includes potential sanctions for any individual who purchases such products made from North Korean labor — even if the workers are in another country legally.
North Korea workers are known to work in certain China industries (particularly seafood, wood flooring and sewing garments) under North Korean government sponsorship and supervision, with up to 70% of their wages taken by the North Korean government. A recent investigation by the Associated Press revealed that more than 100 cargo containers of seafood from China factories employing North Korean workers were imported into the U.S. this year and sold in well-known supermarkets. Following passage of the new U.S. sanctions law in August, such imports are now illegal, with importers potentially subject to criminal penalties.
Also at play, on August 5, the UN passed a tough new sanctions resolution targeting North Korea’s primary exports, including seafood, coal, iron ore and lead. This in turn prompted China (who has previously been lax about enforcing UN sanctions) to immediately begin blocking seafood shipments from North Korea, which had flowed freely into China before that. Hundreds of seafood processing businesses in the area of Hunchun are reported to rely on the North Korean seafood. In fact, China’s abrupt action to stop trucks filled with seafood from crossing the border sparked a rare day-long protest in the Hunchun area, as seafood traders were cut off from their normal supply.
Although, for now, China is cracking down on North Korean products used to process goods destined for the United States, U.S. importers must nevertheless remain alert to products from China (or elsewhere) that may have been produced using North Korean workers employed in Chinese factories.
Enforcement of North Korean sanctions is intensifying and will continue, requiring importers to re-examine their supply chains to ensure it does not contain North Korean product and is not processed using North Korean labor.
