With the risk of shipments being denied entry into the United States, it is crucial therefore that brands and retailers can provide evidence of a rigorous social auditing program across their global supply chains.

Under the Countering America’s Adversaries through Sanctions Act (CAASA), passed on August 2 this year, any significant merchandise mined, produced or manufactured entirely or in part by North Korean nationals, or citizens, anywhere in the world, is prohibited entry into the United States.  The Act creates the presumption that all of the estimated 100,000 North Korean workers around the world in agriculture, seafood, timber, textiles, footwear, ship building and manufacturing, are forced labor. High risk countries include China (North East), Burma, Cambodia, Indonesia, Laos, Malaysia, Thailand and Singapore.  Any affected shipments may therefore be prevented entry into the United States under the Trade Facilitation and Enforcement Act (TFEA).

Any North Korean workers found in global supply chains are presumed to be forced labor, CBP released a statement on November 7 reminding importers of their obligation to exercise reasonable care and take all necessary and appropriate steps to comply with the forced labor import ban and sanctions against North Korean labor.  CBP also stated its commitment to preventing the importation of merchandise affected by North Korean nationals or citizens anywhere in the world.

Since that press release CBP has increased vigilance over imports potentially affected by North Korean labor.  During the past month, dozens of requests for information (CF 28s) have been received by importers of textiles and footwear alone requiring them to provide evidence, within 30 days, of how they prevent forced labor from entering their global supply chains.  Specifically, these questions have asked:

• Whether importers have a due diligence program which examines whether their supply chains are free from forced labor?
• Whether supply chain audits have been performed to ensure that supply chains are free from forced labor?
• How importers identify whether their supply chain includes North Korean labor?
• Whether your supply chain audits are internal or performed by a third party and the dates of those audits as well as their findings.

There are some notable areas of uncertainty. For example, how far back into their supply chains are importers required to audit; Tier I, Tier II, Tier III? Are industry standard responsible sourcing audits sufficient in themselves to verify the absence of North Korean labor?  At this point CBP has not provided answers to these questions.

Despite these uncertainties, the most practical approach is for brands and retailers to view these challenges within the context of their existing anti-forced labor initiatives.  Omega has increased diligence over the presence of North Korean labor during audits in China and other high risk markets.  Suspected North Korean nationals should have their identity documents reviewed carefully while, if in China, being mindful of them potentially being Chinese citizens of Korean ethnicity (Chaoxian 朝鲜).  If the workers are indeed North Korean citizens, without valid permits to work in China, they would be considered illegal workers and the client alerted accordingly.  If they do possess the correct permits, but do not enjoy freedom of movement (the most likely scenario) then they would automatically be considered forced labor.  Should the workers have the correct permits and are not subject to forced labor conditions Omega shall discretely report the issue to its client for review.

In addition, Omega recommends that brands stress their anti-forced labor requirements to suppliers in high risk markets stressing these recent developments regarding North Korean labor.