February 27, 2019 | Policy Brief

North Korea’s Use of Slave Labor Will Limit Any Prospective Sanctions Relief

February 27, 2019 | Policy Brief

North Korea’s Use of Slave Labor Will Limit Any Prospective Sanctions Relief

Ahead of his summit in Hanoi with North Korean dictator Kim Jong Un, President Trump has been emphasizing the economic benefits to Pyongyang of dismantling its nuclear program. However, the continuation of North Korea’s slave labor-related human rights abuses may constrain what Trump and South Korea can offer in terms of nuclear-related sanctions relief.

According to the State Department, “[t]he North Korean regime is believed to be earning over $500 million each year from heavily taxing the nearly 100,000 overseas North Korean workers,” of whom an estimated 80 percent work in China and Russia. This policy entails the export of high-skilled workers in fields such as information technology as well low-skilled manual labor.

The North Korean government compels its citizens abroad to work in horrific conditions, as detailed by a rare lawsuit filed by a North Korean laborer who worked at a Polish shipyard. The analysis group C4ADS reported workdays of 12 to 16 hours, constant surveillance, confiscation of wages, and decrepit housing.

Conditions are even grimmer for slave laborers inside of North Korea, where it is estimated that one in ten citizens are forced to work by the state, including children. These numbers may even be increasing based on a recent push by Pyongyang to further develop the tourism sector of its economy, which entailed the dispatch of nearly 150,000 laborers to Wonsan.

Pyongyang uses the hard currency earnings of its overseas workers to prop up the regime, including its nuclear weapons and ballistic missile programs. The international community has noticed, and put in place multilateral and bilateral sanctions regimes to address human rights and slave labor. UN Security Council Resolution 2397 mandates that all countries expel these workers by the end of 2019.

Nonetheless, the Trump administration has intimated that substantial sanctions relief and economic normalization with North Korea could result from successful nuclear negotiations. The South Korean government appears to be even more enthusiastic with respect to the prospects of normalized trade relations, particularly with respect to the reopening of the Kaesong Industrial Complex.

However, powerful U.S. sanctions predicated on North Korea’s use of slave labor may stand in the way of both efforts. Sanctions legislation signed into law in August 2017 includes a requirement that prohibits importing any goods made with North Korean forced labor, from footwear and textiles to seafood, mining, and logging products. U.S. customs has seized multiple shipments of such goods.

Last month, California’s Elf Cosmetics was fined approximately $1 million for importing fake eyelash kits utilizing materials that were sourced in North Korea, likely in Camp 12. Importers associated with sectors where North Korean forced labor is known to be used must ensure that their supply chain is free from products resulting from that forced labor, or face the seizure and forfeiture of the prohibited merchandise, if not civil or criminal action.

Confronting North Korea’s use of slave labor and broader human rights abuses is not only a moral imperative, but also a national security issue, as slave labor funds North Korea’s proliferation activities. Given the scope of sanctions related to slave labor, the administration must make it explicitly clear that there is unlikely to be substantial economic engagement with the North as long as these abuses continue.

Matthew Zweig is a senior fellow at the Foundation for Defense of Democracies (FDD), where he also contributes to FDD’s Center on Economic and Financial Power (CEFP). Follow FDD on Twitter @FDD and @FDD_CEFP. FDD is a Washington-based, nonpartisan research institute focusing on national security and foreign policy.

Issues:

North Korea Sanctions and Illicit Finance United Nations