Those of us in the business of global trade compliance are well aware of the increased attention in recent years to the issue of forced labor. This is not a new problem, but incidents in recent years with well-known brands, coupled with new legislation designed to curb behavior of this type, has increased the importance of supplier due diligence for those operating in global markets.

On January 31, 2019, the U.S. Office of Foreign Assets Control (OFAC) issued its first fine to e.l.f. Cosmetics for violating the Countering America’s Adversaries Through Sanctions Act (CAATSA), as it applies to North Korean labor under the North Korean Sanctions Regulations (NKSR).  The initial statutory maximum civil monetary penalty amount for the apparent violations was US$40,833,633. This enforcement action indicates that government agencies are watching closely for violations of this nature.

Although the United Kingdom has successfully signed continuity agreements with Chile, the Faroe Islands, and Eastern and Southern Africa,  the embattled nation is still struggling to lock down free trade agreements (FTA) ahead of the March 29 Brexit date. Speaking at a parliamentary inquiry to the International Trade Committee on February 6, trade minister Liam Fox was unable to confirm that all 40 FTAs that make up the UK’s existing deals as a member of the European Union would still be in place after the exit date.

If the UK fails to secure a deal with a current trading partner before March 29, then both parties will default to World Trade Organization (WTO) trading rules. This would incur additional tariffs to a wide range of traded goods that were previously duty free when the UK was part of the EU. If a withdrawal agreement is successfully secured between the UK and the EU before the exit date, then all 40 agreements are expected to be extended during the transition period, which is set to end in 2021.