Birds-eye view of a cargo ship with multiple cargo shipments in red and blue colors.

Countering American Adversaries Through Sanctions Act (CAATSA)

Notably, CAATSA includes forced labor prohibitions. In 2017, CAATSA was enacted to impose new sanctions on Iran, Russia, and North Korea.

CAATSA Title III Section 321 (22 U.S.C. § 9241(a)) creates a rebuttable presumption that significant goods, wares, merchandise, and articles mined, produced, or manufactured wholly or in part by North Korean nationals or North Korean citizens anywhere in the world are produced with forced labor and prohibited from importation under Section 1307. Essentially, the law requires companies to review their supply chains to ensure that North Korean labor is not used. The forced labor presumption can only be rebutted if the Commissioner of CBP finds clear and convincing evidence that the imported goods were not produced with forced, convict, or indentured labor. Violations of these restrictions can result in civil penalties and criminal prosecution.

CBP is continuing to enforce these restrictions. For example, in Ruling H317249 issued on March 5, 2021, CBP denied Dandong Huayang Textiles and Garments Co., Ltd’s protest that claimed that North Korean nationals did not produce the garments that were detained under CAATSA. Although the importer provided Customs with a Worldwide Responsible Accredited Production (WRAP) report that determined that the factory employed Chinese nationals, CBP determined that the importer did not meet the “clear and convincing” burden of proof that the goods were not produced by North Korean nationals. Specifically, CBP identified inconsistencies in the evidence, including a photograph of workers next to boxes of personal protective equipment. The boxes were identical to images in The Guardian’s November 2020 report of North Korean forced labor used in Dandong Province factories in the production of PPE.

This ruling illustrates that CBP will not take reports by third party auditors at face value. CBP conducts independent investigations of forced labor allegations.

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