Revealed: North Korea’s Sesame Street Export Business

Is Sesame Street Toy Production Being Unwittingly Outsourced to North Korea, or Is This a Bizarre Case of North Korean Bootlegging?
January 8th, 2013

North Korea’s Kyonghung Toy Factory is producing Sesame Street merchandise for the international market, NK NEWS can exclusively reveal.  

The toy manufacturer’s Sesame Street line was found among a series of otherwise non-branded children’s products in a full-page advert in the latest edition of North Korea’s quarterly Foreign Trade magazine.

Alongside a range of generic stuffed animals, a close inspection of the pictures reveals Sesame Street characters including Elmo, Cookie Monster and Big Bird. A comparison of images reveals striking similarities between one official line of products and the North Korean range.

PBS Television and producers Sesame Street Workshop both refused to offer any comment on the pictures when contacted by NK NEWS last week. In addition, further inquiries about the possibility of official Sesame Street lines being manufactured in North Korea were left unanswered by Sesame Street Workshop’s Beatrice Chow.

North Korean “Sesame Street” stuffed toys depicted alongside generic stuffed toys for children

Official products: Striking similarities with North Korean range

In America, Sesame Street’s soft toy manufacturing is led by New Jersey based Gund LLC, however, production is offshore and based in China. But with labor prices increasing to unprecedented levels in recent years, it has become increasingly common for Chinese companies to outsource production and other commercial services to North Korea.  Could this now be the case for Sesame Street’s official toy line?

Offering a diligent, productive, and cost-effective workforce, North Korea’s laborers make an attractive resource for Chinese companies looking to save money when manufacturing. However, subcontracting to North Korea remains tricky. The UK Based “Edinburgh Woolen Mill” company was left embarrassed last year when exposed for connections to North Korea. Despite “Designed in Scotland” tags, a BBC Newsnight investigation showed that its woolen ranges had in fact been manufactured by North Korean laborers in Mongolia.

On the topic of North Korea producing goods for the international market, Felix Abt, who spent seven years managing a business in Pyongyang and is author of A Capitalist In North Korea, explained the problems North Korean factories face trying to deal with the outside world:

I have previously warned two different North Korean garment factories not to produce the branded products they were about to manufacture on behalf of Chinese businesses, as the Chinese were not authorized by the brand owners to produce them in North Korea. The factory bosses were surprised, they are still quite naive due to their lack of exposure.

I also invited a specialist in Corporate Social Responsibility to hold seminars telling companies not to hire kids, to take precautions for workers’ safety and to protect the environment or otherwise they would never be eligible as suppliers for multinational groups. That was another topic new to North Korean factory bosses.

But while companies risk facing negative attention for outsourcing to a country widely regarded in the West to be a “Pariah State”, the consequences for subcontracting in the DPRK are a lot more serious in the home of Sesame Street – the United States. Due to North Korea’s nuclear and missile programs and an unresolved state of war, it remains illegal for companies selling products on U.S. soil to outsource production to North Korea.  According to the Treasury Department,

Pursuant to E.O. 13570, goods, services, and technology from North Korea may not be imported into the United States, directly or indirectly, without a license from OFAC.  This broad prohibition applies to goods, services, and technology from North Korea that are used as components of finished products of, or substantially transformed in, a third country.

If Sesame Street toys were even unwittingly being produced in North Korea for U.S. consumption, there could be significant consequences for both manufacturer Gund LLC and TV producers Sesame Street Studio. But while this scenario remains a very real possibility, it remains more likely that unintended North Korean bootlegging of an American brand is what is taking place in this case.

Indeed, North Korea’s Kyonghung Toy Factory could be producing cheap, unlicensed knock-offs of a brand synonymous with New York City and the United States, without realizing the linkage to its “enemy state”.

Although North Korea comes no where near China when it comes to the production of knock-off goods, rumors have long circulated about individual cases related to state-endorsed  tobacco counterfeiting, brand name pharmaceutical copycat manufacturing, and of course, $100 dollar “superbill” production.

NK NEWS attempted to contact the Korea Kyonghung Trading Corporation for comment, but all email correspondence bounced and calls were left unanswered.

Original advert in Foreign Trade, Q4 Edition, 2012