US Customs detains Chinese firm's goods

WASHINGTON • Products made by Chinese sportswear giant Li Ning have been detained at US ports since Monday, after an investigation showed that the company used North Korean labour in its supply chain.

Some Li Ning goods can enter the United States if the company "provides clear and convincing evidence that their merchandise was not produced with convict labour, forced labour, or indentured labour under penal sanctions within 30 days of notice of detention", said US Customs and Border Protection. Otherwise, the merchandise may be subject to seizure and forfeiture, it added.

North Korea had long sent tens of thousands of citizens to places such as Russia and China for manual labour. This earned the regime more than US$500 million (S$680 million) a year in vital foreign currency - or about 1.5 per cent of the country's economy by the time the United Nations called for a halt to the practice in 2017 to punish Pyongyang for its nuclear and ballistic missile tests.

Even though Russia was supposed to stop the import of labour from its neighbour under UN sanctions, the North Koreans still went over.

The exact figure is unknown but there are likely several thousands of North Koreans working in Russia, according to NK News. They mostly work in the timber and construction industries in the country's Far East, being paid in roubles and forced to convert large portions of their salaries to dollars, or another major currency, which is then handed over to cash-starved North Korea.

Earlier this month, Norway's US$1.3 trillion sovereign wealth fund excluded Li Ning due to the alleged risk that the firm contributes to serious human rights violations in China's Xinjiang region.

Textile production in Xinjiang has become a controversial issue in developed countries over concerns that China is detaining more than one million Uighurs and other ethnic and religious minorities in "re-education" camps in Xinjiang.

China has repeatedly denied these claims.

Li Ning, founded by the Olympic gold medal winning gymnast of the same name, makes shoes, sporting apparel and accessories under its Li Ning and Kappa brands. It has made significant overtures in recent years into overseas markets.

Responding to a question at a regular media briefing in Beijing yesterday, Chinese foreign ministry spokesman Zhao Lijian said he did not have details of the detainment, but stressed that China strongly opposes any form of long-arm jurisdiction and unilateral sanctions.

Li Ning did not respond to requests to comment on the US Customs action.

In a January filing, the company said it has "zero tolerance" for misconduct including forced labour, and is "firmly committed to conducting business in a legal and ethical manner".

BLOOMBERG