U.S. Government and Industry Discuss How to Counter the Import of North Korean Forced Labor Goods

On 13 April 2018, officials from U.S. Customs and Border Protection (CBP), U.S. Immigration and Customs Enforcement (ICE), the Department of State (State), the Department of the Treasury (Treasury), and the Department of Labor(DoL) met with industry stakeholders to discuss Section 321(b) of the “Countering America’s Adversaries Through Sanctions Act” (CAATSA). Under this section, sanctions are imposed on goods made using forced North Korean labor.

Opening Remarks by DHS and DoS

The discussion was opened by Michael Doherty, the Assistant Secretary of Border, Immigration, and Trade within the Department of Homeland Security. In his opening remarks, he stated the importance of establishing working groups composed of industry and government stakeholders. He emphasized how deep and repeated collaboration can lead to the development of accepted and useful tools to help the U.S. combat the importation of goods made using forced North Korean labor. As an example of this collaboration, Michael Doherty discussed the e-Allegations tool, developed and operated by CBP, and how industry helped in its development.

Michael Doherty was followed by Scott Busby, the Deputy Assistant Secretary in the Bureau of Democracy, Human Rights, and Labor in the U.S. Department of State. He thanked industry stakeholders for taking time to meet and discuss CAATSA Section 321(b) and stressed the importance of collaboration in stopping the importation of goods made by exploited North Korean labor. In his opening statement, Scott Busby emphasized how North Korean laborers are exploited by the North Korean regime to fund and advance its nuclear missile program.

Discussion on CAATSA 321(b) 

After the opening remarks, the discussion turned to the panelists. The panelists represented various Government Agencies and Private Partners that have an interest in the CAATSA requirements. Starting the discussion was Julie Turner, a Foreign Affairs Officer within the State Department and Greg Scarlatoiu, the Executive Director of the Committee for Human Rights in North Korea. Both gave detailed descriptions of the exploited North Korean laborer and how to identify them.

Julie Turner first explained the prevalence of forced North Korean labor worldwide. Currently, the State Department is tracking forced North Korean laborers in at least 35 countries, and are expanding that list as more abuses become known. The two most prominent offenders are Russia and China which employ 40,000 and 80,000 forced North Korean laborers respectively.

Typically, the North Korean regime sends married men with at least one, but normally two, children living in North Korea to work in industries which require hard labor. Having families provides leverage to the regime who can effectively hold these family members as hostages while the laborer is exploited overseas. The North Korean regime typically sends young, better-educated women to work in industries such as textiles and food service. Both types of exploited persons, however, share the following conditions:

  • Typically work and live in the same location.
  • Inhumane working conditions.
  • 2- to 5-year contracts
  • Required self-criticism sessions
  • Employer-Retained identity documents

The panelists also discussed developments, tools, and ways industry and government are partnering to combat North Korea’s exploitation of its workers. Representing DoL was Marcia Eugenio, the Director of Child Labor, Forced Labor, and Human Trafficking. She discussed two new apps developed by her office: Comply Chain and Sweat & Toil. Comply Chain helps businesses develop Social Compliance Programs while the Sweat & Toil app provides data on types and origins of goods that are of higher risk of being made using forced or child labor. Eugenio emphasized how these apps help bring attention to the issue, and help businesses understand how to comply with Forced Labor and CAATSA requirements.

In discussing the importance of due diligence systems were ICE and CBP representative William “Bill” Ross, the Deputy Director of the National Intellectual Property Rights Center, and Jerry Malmo, Director of the Civil Enforcement Division for the CBP Office of Trade. Ross emphasized the importance of businesses implementing a due diligence system to mitigate the risk of forced North Korean labor entering their supply chains. He said ICE had no interest in pursuing companies showing due diligence and will take that into consideration when issuing fines and penalties. ICE, he said, is more concerned with identifying those companies that are knowingly and purposefully using Forced Labor within their supply chains.

Jerry Malmo also emphasized due diligence systems as helping Government enforce Anti-Forced Labor and CAATSA laws, while reducing penalties and fines for businesses. Additionally, Jerry Malmo discussed the role of the Commercial Customs Operations Advisory Committee (COAC) and the CBP Centers of Excellence and Expertise in assisting businesses in remaining compliant with CAATSA regulations. He mentioned that the COAC helps industry partners remain engaged with CBP and provide insight into the processes and tools developed by CBP for industry. Jerry Malmo also highlighted that Centers of Excellence and Expertise (CEEs) have account managers that can answer questions and act as a point of contact for industry stakeholders. He also referenced various fact sheets developed by CBP regarding forced labor and its abuses.

The discussion then pivoted to government guidance on compliance with the CAATSA requirements. Frank Swerda, the Senior Enforcement Officer of the Office of Foreign Assets Control (OFAC) within the Treasury Department, and Bob Mitchell, the Vice President of the Responsible Business Alliance (RBA) both provided tools and information to help businesses achieve compliance. Frank Swerda directed industry to the guidance issued by OFAC on how to remain compliant with sanctions on North Korea. Similarly, Bob Mitchell directed businesses to its list of tools, assessments, and guidelines which have been made available to help businesses ensure their supply chains remain free of forced labor.

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