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27 April 2018
Importers associated with industries where North Korean forced labour is known to be used (eg, footwear, textiles, seafood, mining, pharmaceuticals and logging) must exert caution or be prepared to face the consequences. This was the message delivered at a recent meeting of government officials at the US Immigration and Customs Enforcement's Intellectual Property Rights Centre.
Representatives from the Departments of Homeland Security, Labour, Treasury and State addressed the strict enforcement of Section 321(b) of the Countering America's Adversaries Through Sanctions Act (CAATSA), which prohibits the import of merchandise produced by North Korean nationals or citizens. In particular, Section 321(b) creates a rebuttable presumption that significant goods mined, produced or manufactured by North Koreans are products of forced labour 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 the State and Labour Departments, noted that while China and Russia are the main countries in which North Korean labourers are located, 35 countries were determined to be involved with North Korean labourers 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 labour, forced labour or indentured labour. This standard of proof is more rigorous than the usual preponderance of evidence and requires proof 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 Section 321(b) of CAATSA. Rather, they emphasised the need to:
Failure to ensure that a company's supply chain is free from products resulting from North Korean forced labour will result in seizure and forfeiture of the prohibited merchandise, civil fines and possibly criminal prosecution.
For further information on this topic please contact Teresa Polino or Elyssa R (Emsellem) Kutner at Arent Fox LLP by telephone (+1 202 857 6000) or email (firstname.lastname@example.org or email@example.com). The Arent Fox LLP website can be accessed at www.arentfox.com.
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