Many of the wigs and false eyelashes labeled “Made in China” that are sold by American retailers may violate U.S. sanctions on North Korea, which is where they are actually manufactured, according to experts.
China imported approximately 30 tons of North Korean-made wigs and false eyelashes in April worth over $22.7 million, according to data from China’s General Customs Administration examined by VOA’s Korean Service.
About half, amounting to more than $11.2 million, were imported by Chinese companies in Henan province. Xiaogang, a city in central Henan province, is the world’s largest wig manufacturing, distribution and export hub.
Although North Korea sealed its border with China in January 2020 at the beginning of the pandemic, trade between the neighbors has resumed gradually since North Korea declared victory over COVID-19 in August 2022. China is North Korea’s biggest trading partner.
The amount of Pyongyang’s wig and false lash exports to China in April shows that “trade is returning after the pandemic” as North Korea’s total exports to China in 2021 “only amounted to $56.3 million,” said Troy Stangarone, senior director at Korea Economic Institute (KEI) to VOA Korean by email.
As North Korea’s exports to China return to pre-pandemic levels, experts said U.S. companies must be vigilant that supply chains do not include Chinese manufacturers that use North Korean labor. U.S. penalties for sanctions violations convictions include “incarceration, fines, and forfeiture of any/all goods imported and proceeds of these crimes,” according to federal law.
“Chinese firms have been known to subcontract with North Korean firms and label the goods as made in China,” Stangarone said. “Any efforts by Chinese firms to directly or indirectly export wigs and fake lashes or any other North Korean goods to the United States would be a violation of U.S. sanctions.”
Despite the sanctions, however, there is still a good chance that those items could end up in the U.S., he added.
$128.6 million in human hair products
China was the top global exporter of human hair products including wigs and fake lashes in 2021, totaling approximately $1.84 billion while the U.S. was the largest importer of those products worth approximately $1.01 billion in the same year.
In April, China was the largest exporter of wigs and other human hair products to the U.S. amounting to $128.6 million.
“If firms utilize China as part of their supply chain, they need to be aware” they could be “unknowingly sending North Korean goods to the United States,” said Stangarone.
The U.S. Treasury issued an advisory in 2017 cautioning American businesses to “closely examine their entire supply chain(s) for North Korean laborers and goods and services or technology” especially “those businesses with operation in high-risk countries.”
The advisory said that North Korea uses forced labor to raise revenue to fund its weapons of mass destruction (WMD) and ballistic missile programs.
The “use of North Korean citizens or nationals as laborers in supply chains could trigger U.S. sanctions, and the issuance of work authorizations for these North Korean nationals is prohibited under UN Security Council resolution 2397” issued in 2017, said the advisory.
Joshua Stanton, a Washington-based attorney who helped draft the Sanctions Enforcement and Policy Enforcement Act in 2016, said, “Importing products made with forced or penal labor into the United States has long been a violation of the U.S. Tariff Act.”
He continued, “If goods are made in whole or in part with North Korean labor, they’re subject to rebuttable presumption that they’re made with forced labor.”
Regulations ban imports from North Korea
The regulations ban imports of goods, services or technology from North Korea.
In 2019, California-based e.l.f. Cosmetics agreed to pay nearly $1 million for importing over $4 million worth of false eyelash kits from Chinese suppliers that sourced materials from North Korea in violation of the North Korean Sanctions Regulations.
The U.S. Treasury said the cosmetics company “appears not to have exercised sufficient supply chain due diligence while sourcing products from a region” in which North Korea is “known to export goods.”
“If U.S. Customs and Border Protection’s Office of Trade identifies those [North Korean-made] wigs, it will seize them and sell them at auction,” said Stanton.
Stanton said U.S. Customs and Border Protection (CBP) may rely on tips to identify North Korea-made products such as items coming from an exporter or factory with a known history of employing labor in North Korea, among other ways of detection.
In 2022, CBP seized goods produced by the Chinese companies Jingde Trading, Rixin Foods and Zhejiang Sunrise Garment Group at U.S. ports.
The seizures were based on CBP’s “investigation indicating that these companies use North Korean labor in their supply chains in violation of the Countering America’s Adversaries Through Sanctions Act (CAATSA),” the CBP said in December 2022.
CAATSA bans the importation to the U.S. of items made by North Korean workers “anywhere in the world,” said the statement.
Although U.N. Security Council sanctions on North Korea do not explicitly list wigs and false lashes as banned export items, China and North Korea could be violating those sanctions, according to Stanton. U.N. sanctions ban the Pyongyang regime from exporting items like coal, textiles and seafood to prevent sales revenue from funding its weapons programs.
“The U.N. sanctions are not required to list every product and item that North Korea exports,” Stanton said.
North Korea’s “export to China is nonetheless a violation of UN sanctions if China fails to ensure that Pyongyang doesn’t use the profits for prohibited activities, including WMD proliferations,” continued Stanton.
North Korea conducted a record number of weapons tests last year to enhance the development of its missile and nuclear programs, a practice that Pyongyang is continuing this year. Its latest attempted launch of a satellite using ballistic missile technology banned by the UN failed on May 31.
Christy Lee contributed to this report.