Background

U.S. Customs and Border Protection reports that as of March 14 it is detaining goods produced or manufactured by a Chinese company at all U.S. ports of entry after an agency investigation indicated that the company uses North Korean labor in its supply chain.

The Countering America’s Adversaries Through Sanctions Act enacted in 2017 created a rebuttable presumption that goods, wares, merchandise, and articles mined, produced, or manufactured in whole or in part by North Korean nationals or citizens anywhere in the world are forced labor goods under 19 USC 1307, which prohibits imports of such goods. As a result, such North Korean goods are not entitled to entry at any U.S. port and may be subject to detention, seizure, and forfeiture. Violations may result in civil penalties as well as criminal prosecution.

CBP states that pursuant to CAATSA goods from the Chinese company are no longer entitled to entry unless the importer provides, within 30 days of the notice of detention, clear and convincing evidence that the goods were not produced with convict labor, forced labor, or indentured labor under penal sanctions. If the importer fails to do so the goods may be subject to seizure and forfeiture. 

Sandler, Travis & Rosenberg offers a comprehensive suite of services to help companies address forced labor concerns, including supply chain reviews, due diligence strategies, and proactive remediation. ST&R also maintains a frequently updated web page offering a broad range of information on forced labor-related efforts in the U.S. and around the world and offers an on-demand webinar on forced labor and supply chain transparency. For more information, please contact ST&R at supplychainvisibility@strtrade.com.

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