Li Ning merchandise detained by US Customs over North Korea link

SYDNEY (BLOOMBERG) - Merchandise made by Chinese sportswear giant Li Ning has been detained at US ports, after an investigation indicated that the company used North Korean labour in its supply chain.

The action against Li Ning Sporting Goods was effective from March 14, US Customs and Border Protection said in a statement.

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

North Korea has for years sent tens of thousands of citizens to places like Russia and China for manual labour. This earned the regime more than US$500 million (S$683 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 halt the importation of labour from its neighbour under UN sanctions, the North Koreans still came. The exact figure is unknown but it is likely that several thousand North Korean workers are there now, according to NK News. They mostly work in the timber industry is the country's Far East and are paid in roubles. The sharp downfall of the Russian currency means Pyongyang receives less cold cash for exporting its workers to the country.

The eponymous sportswear company, founded by Olympic gold medal winning gymnast Li Ning, makes shoes, sporting apparel and accessories under its Li Ning and Kappa brands.

It has made significant overtures in recent years into overseas markets, and is doubling down at home where it is benefiting from rising interest from Chinese consumers in local brands.