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A new multi-agency council highlights the hidden risks of non-compliance with forced labor laws and sanctions in North Korea, as well as other laws on importation. Mainly, it is the risk that a company may inadvertently supply goods, services or technology to North Korea or that North Korean workers are present in the supply chain. Supply of a business involving third country suppliers. Businesses and importers – especially those from high-risk industries or from high-risk countries, such as Russia or China – should carefully consider this advice and review their supply chains and modify their policies, practices and procedures of Compliance and Due Diligence,
US State Department, US Treasury Department's Foreign Assets Control Bureau, Customs and Border Protection Department and Immigration Jointly Published by the United States Department of the Treasury Notice on July 23rd. The main points to remember from this document are as follows:
• High Risk Industries: Industries facing a high risk of North Korean labor problems include, but without limitation: clothing, construction, footwear manufacturing, hotels, computer services, forestry, medical, pharmaceutical, catering, seafood processing, textiles and shipbui lding. • High-Risk Country: While China and Russia are the major host countries of North Korean workers, the notice identifies many other countries that engage in such practice. Companies should carefully consider Schedule 3 of the Notice, which identifies high-risk countries associated with particular industries. • Red Flags: The Notice identifies several potential indicators that North Korean workers may be involved in overseas operations or that certain goods, services and technologies may have a North Korean connection . For example, some joint ventures may require close scrutiny as North Korea is engaged in various joint ventures with China and other countries. Companies should review the list of known joint ventures listed in Schedule 2 of the Notice and exercise due diligence with respect to suppliers, particularly in China and in other countries. at high risk.
Legal Documents
target North Korea. Primarily, US sanctions and export controls laws that prohibit substantially all transactions directly or indirectly involving North Korea by US persons or involving US jurisdictions ( eg ). or payments sent by a US bank). In addition, the US secondary sanctions target other transactions related to North Korea, even by non-US companies operating outside the jurisdiction of the United States. Complementing the US sanctions, the United Nations imposes a set of severe sanctions targeting North Korea, which its members are obliged to implement.
In addition to the sanctions laws, other provisions of the US law prohibit, for example, the United States that was wholly or partly produced in a foreign country by forced labor ( for example condemns work and contract work) and requires importers to exercise "due diligence" in their import transactions. Adopted last year, the American Counterfeiters Act establishes a rebuttable presumption that significant assets produced in whole or in part by North Korean nationals or North Korean citizens are prohibited. By the law on forced labor and forbidden entry In other words, even if a property was not produced with forced labor, companies and importers should be ready to justify a such claim.
As a result of these laws, manufacturers, suppliers, importers, buyers, service providers and other members of the supply chain could be exposed to compliance risks if they do not do not know the high-risk areas and potential indicators of a North Korean link.
Companies should consider re-evaluating audit policies 19659003] The notice signals a particular emphasis by US authorities on North Korean work and other services, goods and technologies. As a result, companies, particularly those dealing with high-risk countries or industries, are advised to consider whether they are re-evaluating their compliance policies, practices, and procedures.
Depending on the size, nature and main risks your business, companies should consider increasing their documented due diligence policies and procedures. Additional measures may include:
• Clearly communicate the penalties and obligations of forced labor to partners • Monitor your shipping documents for references to North Korea and / or known joint ventures with the North Korea • Sending questionnaires using similar methods to evaluate suppliers and suppliers • Examine your supply chain, from raw materials to finished products • Periodically monitor and report areas of risk • Conduct internal audits for Forced Labor Indices • Hiring third-party auditors to perform unannounced audits of your supply chain
The advisory opinion confirms that such policies, practices, and procedures may be considered mitigating factors in case of coercive action.
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