I. Heightened Risk for and Potential Indicators of Goods, Services, and Technology with a North Korean Nexus
Sub-Contracting/Consignment Firms: Third-country suppliers shift manufacturing or sub-contracting work to a North Korean factory without informing the customer or other relevant parties. For example, a Chinese factory sub-contracts with a North Korean firm to provide embroidery detailing on an order of garments.
Mislabeled Good/Services/Technology: North Korean exporters disguise the origin of goods produced in North Korea by affixing country-of-origin labels that identify a third country. For example, North Korean seafood is smuggled into third countries where it is processed, packaged, and sold without being identified as originating from North Korea. There are also cases in which garments manufactured in North Korea are affixed with “Made in China” labels.
Joint Ventures: North Korean firms have established hundreds of joint ventures with partners from China and other countries in various industries, such as apparel, construction, small electronics, hospitality, minerals, precious metals, seafood, and textiles. See Annex 2 for a list of known North Korean joint ventures.
Raw Materials or Goods Provided with Artificially Low Prices: North Korean exporters sell goods and raw materials well below market prices to intermediaries and other traders, which provides a commercial incentive for the purchase of North Korean goods. This practice has been documented in the export of minerals. For example, a close review of trade data on North Korea’s export of anthracite coal to China from 2014- 2017 reveals a consistent sub-market price for this export.
Information Technology (IT) Services: North Korea sells a range of IT services and products abroad, including website and app development, security software, and biometric identification software that have military and law enforcement
applications. North Korean firms disguise their footprint through a variety of tactics including the use of front companies, aliases, and third country nationals who act as facilitators. For example, there are cases where North Korean companies exploit the anonymity provided by freelancing websites to sell their IT services to unwitting buyers.
II. Heightened Risk for and Potential Indicators of North Korean Overseas Labor
A. Heightened Risk for North Korean Overseas Labor Producing Revenue for the Government of North Korea
Industries
The North Korean government exports large numbers of laborers to fulfill a single contract in various industries, including but not limited to apparel, construction, footwear manufacturing, hospitality, IT services, logging, medical, pharmaceuticals, restaurant, seafood processing, textiles, and shipbuilding.
Location
In 2017-18, North Korean laborers working on behalf of the North Korean government were present in the listed countries and jurisdictions below.2 China and Russia continue to host more North Korean laborers than all other countries and jurisdictions combined.
Algeria
Angola
Bahrain
Bangladesh
Belarus
Cambodia
China
Democratic Republic of the Congo
Equatorial Guinea
Ethiopia
Ghana
Guinea
Indonesia
Kyrgyzstan
Kuwait
Laos
Libya
Mali
Malaysia
Mongolia
Mozambique
Namibia
Nepal
Nigeria
Oman
Peru
Poland
Qatar
Republic of Congo
Russia
Rwanda
Senegal
Singapore
Tanzania
Taiwan
Thailand
Uganda
United Arab Emirates
Uruguay
Vietnam
Zambia
Zimbabwe
B. Potential Indicators of North Korean Overseas Labor3
Wages: Indicators include the employer withholding wages, making unreasonable pay deductions, paying wages late, and making in-kind payments. In some instances, laborers earning revenue for the government are paid wages in cash and pay a lump sum to the North Korean government upon their return home.
Contracts: Laborers producing revenue for the government typically are hired under two-to-five year contracts that require a large upfront payment to the North Korean government (anecdotally, up to 30 percent of the total contract amount).
Housing: Laborers often reside in unsafe and unsanitary conditions provided by the employer and sometimes face excessive costs for those accommodations. Laborers providing revenue for the government typically reside in collective housing and are isolated from laborers of other nationalities.
Control over Laborers: Laborers often have no access to or control over bank accounts. Employers retain passports and/or confiscate or destroy laborers’ personal documents (e.g. visas). Laborers producing revenue for the North Korean government will generally have official documentation, including government-issued passports (as opposed to refugees and asylum seekers who will likely not have any such documentation). As with many victims of forced labor, these documents – as well as visas and work permits – may be retained by employers or recruiters. Laborers providing revenue for the government also get little to no time off and are required to attend mandatory self-criticism sessions.
Lack of Transparency: Contract details are often hidden, and financial transactions are handled in such a way that it is difficult to determine the ultimate beneficiary. North Korea also often limits third parties from conducting worksite inspections. Laborers producing revenue for the North Korean government typically cannot be interviewed without a “minder” present.
