Chinese sportswear brand Li-Ning has products seized at US port after sanctions

Chinese sportswear brand Li-Ning Sporting Goods has found itself in political crossfires after a shipment of sneakers was seized at a US port.

Some of Li-Ning’s products are made in North Korea and sanctions levied via Countering America’s Adversaries Through Sanctions Act (CAATSA) resulted in US border control prohibiting the entry of goods into the States.

The sanctions came into effect on 14 March, despite Li-Ning being headquartered in Beijing. “CAATSA is yet another tool in CBP’s trade enforcement arsenal that allows us to uphold the fundamental value of human dignity and to ensure the goods that enter the United States are free from forced labor,” AnnMarie Highsmith, CBP Office of Trade executive assistant commissioner, said in a statement.

The America’s are an attractive market for Chinese brands, and sanctions could stifle growth and expansion ambitions.

Not entitled to entry

US Customs and Border Control (UCB) said Li-Ning merchandise will not be entitled to entry unless the importer provides clear and convincing evidence that their merchandise was not produced with convict labour, forced labour, or indentured labour under penal sanctions within 30 days of notice of detention. If the company fails to provide clear and convincing evidence within this timeframe the merchandise may be subject to seizure and forfeiture.

Li Ning revenue is primarily generated in its home market, with 98.9 of sales in China and only 1.1 percent from international sales, according to the brand’s latest filings. Globally the brand sells its collections via stores on Amazon USA and Japan.

Li-Ning said in a statement on its Investor’s Relations website that “as a professional sports brand company, the Group has a sound corporate governance system in place, strictly complies with the laws, regulations and compliance policies of the PRC, and upholds ethical standards.” It also said its board would not “respond to the speculations or allegations individually.”