Update: this post has been updated with comments from e.l.f. Cosmetics.

The popular drugstore beauty brand e.l.f. Cosmetics is paying the price for importing 156 shipments of false eyelash kits that contained illegal materials from North Korea between 2012 and 2017. Considering the company’s cruelty-free, vegan ethos, the potential backlash could reach far beyond government sanctions.

The US Office of Foreign Assets Control (OFAC) announced a nearly $1 million settlement for the violation of US sanctions on North Korea on January 31. E.l.f. Beauty CEO Tarang Amin said in an email that the “activity was conducted without e.l.f.’s knowledge or authorization” and that the violation was discovered “during a routine, self-administered audit in early 2017.” Amin said that the eyelash kits “represented less than 1% of e.l.f.’s revenue at the time,” a factor that OFAC gave as a reason for leniency despite the five-year period of violating North Korea sanctions.

Made in China, with help from North Korea

The US government has imposed sanctions on North Korea, officially known as the Democratic People’s Republic of Korea (DPRK), most recently in an effort to contain its nuclear weapons program by restricting the flow of money into the country. Sanctions are enforced by prosecuting US companies like e.l.f. that do business with North Korea.

What makes this case complicated is that e.l.f. wasn’t doing business with North Korea — at least not directly. Stephan Haggard, a University of California San Diego professor and co-author of Hard Target: Sanctions, Inducements, and the Case of North Korea, told Vox that businesses’ knowledge of supply chains can be spotty.

“American firms, and particularly midsize ones, often have complex sourcing chains involving China but do not have the capabilities to really look down their suppliers’ supply chains,” he said.

It may surprise beauty fans to discover that most brands don’t own massive factories where they make their own products. Anyone with money could have a business relationship with a contract manufacturing or private labeling firm and release a full product line — without ever having to see the factory where the goods are made. E.l.f. currently has a team in Shanghai, but like the vast majority of beauty brands, the actual products are made for them according to their specifications by other companies.

E.l.f. Cosmetics’ eyelash kits were made by Chinese firms that purchased and imported some of the materials from North Korea. US companies like e.l.f. are supposed to have systems for tracking the source of everything they use to make their products in order to avoid accidentally funneling money to regimes on the official no-go list.

Even when China purportedly enforces United Nations sanctions on North Korea, businesses can’t always rely on individual companies complying. “In China, smaller and midsize firms similarly are able to evade Chinese sanctions and thus exploit low labor and material costs in jurisdictions like North Korea; this is an example of how the North Koreans are able to avoid sanctions by ‘flying under the radar,’” Haggard said.

OFAC says that e.l.f. had an inadequate or nonexistent system for recording and auditing their materials’ country of origin when the finished kits were imported into the US. Failure to track the origin of materials doesn’t insulate companies from prosecution, and e.l.f. Cosmetics elected to self-report the violation to OFAC upon discovering it in January 2017 and pay a settlement rather than face a fine that could have been as much as $40 million.

The rise of false eyelashes — to the benefit of North Korea

A drugstore false eyelash kit typically contains synthetic or animal-origin fibers meant to resemble eyelashes, which are attached to two strips that can be applied to the natural lash line with some of the included glue. Good lashes can cost several hundred dollars and leave you looking like Jennifer Lopez on the red carpet; bad ones look cheap.

What do cheap falsies look like? Like e.l.f. Cosmetics lashes, according to YouTube reviewers. False lashes were something of a joke or costume product in the past, but the category has exploded, with the start of the boom coinciding with the years e.l.f.’s lash kits contained materials from North Korea. Nielsen reported that false eyelashes were a standout in the beauty category in 2018, with US sales reaching nearly $270 million, up 31 percent in revenue from 2017.

It turns out that false eyelash kits are an easy way to end up with some accidental DPRK in the mix, but manufacturing companies aren’t keeping their North Korean materials a secret. Many Chinese manufacturing firms that advertise on Alibaba, for example, mention that their lash fibers are North Korean mink right in the product title.

In fact, a search on Alibaba for “North Korean Materials” shows that false eyelashes are by far the top product associated with the term. A company called ZM Lash Beauty promises “1 to 3 Days Delivery To U.S.” of their North Korean mink lashes, mentions a “California brand office,” and even touts North Korean materials in two US Amazon lash listings. Just how many brands other than e.l.f. are guilty of similar sanctions violations and simply haven’t discovered the problem or self-reported it is unclear at this point.

The North Korean government appears to have direct involvement in making some finished semi-assembled eyelashes. A US human rights group report on North Korean concentration camps mentions that younger women in the Jongo-ri camp make wigs and false eyelashes.

An inactive AliExpress listing for “North Korea handmade false eyelashes” by a company called Norkmade Lashesis touts six years of experience making OEM lashes, presumably for companies in Qingdao, which is across the Yellow Sea from North Korea. The listing touts Norkmade as “one of the biggest and most professional eyelashes manufacturers in North Korea,” which suggests that the DPRK’s lash trade might not be incidental or particularly hidden at all.

The development of a gulag-backed North Korean false eyelash manufacturing industry would run parallel to Kim Jong Un’s interest in the development of DPRK cosmetics as a whole. E.l.f. Cosmetics responded to a request for comment saying, “the materials were not made in gulags/concentration camps/re-education camps.”

Fast and cruelty-free, but make it cheap

E.l.f. Cosmetics attempts to juggle two beauty trends that make oversight and record-keeping both difficult and necessary: It develops new products very quickly, and it markets itself as a cruelty-free brand. A 2018 profile of e.l.f. in Business of Fashion noted that the company sometimes launches new products in as little as 13 weeks. This relates to a growing trend toward “fast beauty,” meant to imitate the cheap, quick-to-market approach of fast-fashion retailers such as Zara. At the same time, the brand’s September 2018 investor materials tout their “[l]ow cost supply chain.”

“Cruelty-free” is an unregulated claim in the beauty world

E.l.f. Cosmetics advertises itself as both cruelty-free and vegan. “Cruelty-free” is an unregulated claim in the beauty world, sometimes verified by a third-party audit, that is usually taken to mean that a brand does not test products on animals and does not sell products in China, where animal testing of cosmetics is usually required (making products in China is not disqualifying as long as they’re not sold there).

The term “cruelty-free” does not typically indicate that the products are free of animal-derived ingredients — those products are designated as vegan. E.l.f. Cosmetics has long touted its cruelty-free and vegan status in the FAQ section of its website and in emails to cruelty-free beauty bloggers seeking info on its animal testing policies.

Despite earlier claims that “[o]ur products do not contain animal derived ingredients,” e.l.f. partnered with PETA (People for the Ethical Treatment of Animals) in 2016 to announce that its brushes would now be made with synthetic fibers, making the brand entirely vegan. In light of the use of North Korean mink in Chinese-made false eyelashes and maybe-spurious, maybe-true reports that the DPRK government collects a whole lot of dog fur annually from citizens that could be used to make clothing, brushes, and maybe even false lashes, Vox asked e.l.f. Cosmetics if the materials from North Korea were of animal origin, and e.l.f. replied, “the materials are not of animal origin — they are synthetic materials.”

The announcement of e.l.f. Cosmetics’ settlement last week was met with wry jokes about OFAC going for the most innocuous, low-hanging fruit under President Trump and made barely a ripple in the beauty community, already used to stories of brands behaving badly. Yet the transfer of money to North Korea via products marketed as more ethical than others shouldn’t be overlooked. Consumers demand answers about whether brands test on animals. The same questions need to be asked about the possibility of people involuntarily making false lashes in North Korea.

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