North Korea: Legislative Basis for U.S.
Economic Sanctions
Dianne E. Rennack
Specialist in Foreign Policy Legislation
September 29, 2010April 25, 2011
Congressional Research Service
7-5700
www.crs.gov
R41438
CRS Report for Congress
Prepared for Members and Committees of Congress
North Korea: Legislative Basis for U.S. Economic Sanctions
Summary
U.S. economic sanctions imposed on North Korea are instigated by that country’s activities
related to weapons proliferation,; regional disruptions, anti-terrorism, and undemocratic
governance. The sanctions have ; terrorism; narcotics trafficking;
undemocratic governance; and illicit activities in international markets, including money
laundering, counterfeiting of goods and currency, and bulk cash smuggling. The sanctions have
the following consequences for U.S.-North Korea relations:
•
Trade is minimal and mostly limited to food, medicine, and other humanitarianrelated goods. North Korea has no advantageous trade status and is outright
denied certain goods—including luxury goods—and trade financing, primarily
due to its proliferation activities. North Korea is in the The Department of Commerce places North
Korea in the two most restricted country
group groups for exports,; imports require a license, and using a North Korea-flagged
license from the Treasury Department’s Office of Foreign Assets Control; using a
North Korea-flagged vessel for any transaction is prohibited.
•
Foreign aid is minimal and mostly limited to refugees fleeing North Korea,;
broadcasting into the country,; nongovernmental organization programs dedicated
to democracy promotion, human rights, and governance,; emergency food aid,;
and aid related to disabling and dismantling the country’s nuclear weapons
program. By law, U.S. representatives in the international financial institutions
(IFI) are required to vote against any support for North Korea due to its nuclear
weapons ambitions. Human rights and environmental activities would also likely
result in U.S. objections to North Korea’s participation in the IFI.
•
Arms sales and arms transfers are fully denied.
•
Assets are blocked for certain individuals and entities, should such assets come
under U.S. jurisdiction.
Since the outbreak of the Korean War in 1950, the United States had imposed fairly
comprehensive economic, diplomatic, and political restrictions on North Korea. On June 26,
2008, however, when multilateral negotiations appeared to be making progress toward North
Korea disabling and dismantling its nuclear weapons enterprise, President George W. Bush
removed restrictions In 1999,
however, President Clinton announced he would lift many restrictions on U.S. exports to and
imports from North Korea in areas other than those controlled for national security concerns; the
Departments of Commerce, Treasury, and Transportation issued new regulations a year later that
implemented the new policy. On June 26, 2008, President George W. Bush removed restrictions
based on authorities in the Trading With the Enemy Act and the terrorism
designation, replacing
them with more circumscribed economic restrictions related to
proliferation concerns. Other statute-based restrictions, however, sustain a fairly comprehensive
sanctions regime on North Korea. proliferation concerns.
The U.S. sanctions in place are a result both of requirements incorporated into U.S. law by
Congress and decisions made in the executive branch to exercise discretionary authorities.
Though the President, in accordance with the Constitution, leads the way in conducting foreign
policy, Congress holds substantial power to shape foreign policy by authorizing and funding
programs, advising on appointments, and specifically defining the terms of engagement in
accordance with U.S. political and strategic interests. This report presents the legislative basis for
U.S. sanctions policy toward North Korea. These sanctions are a critical tenet of the larger
bilateral relationship, and this report highlights Congress’s role and responsibility in determining
the nature of U.S.-North Korea relations. This report focuses on U.S. law and does not address
the impact or effectiveness of the sanctions; several other reports available from CRS address
these matters. See Appendix A for a selected list of other CRS products relating to U.S.-North
Korea relations.
Congressional Research Service
North Korea: Legislative Basis for U.S. Economic Sanctions
Contents
Background ................................................................................................................................1
U.S. Economic Sanctions Currently in Place ...............................................................................3
Trade ....................................................................................................................................4
National Emergency Because of Threat to U.S. National Security....................................4
Terrorism ........................................................................................................................56
Nonmarket Economy ......................................................................................................6
Proliferator......................................................................................................................67
Aid .......................................................................................................................................78
Nonmarket Economy ......................................................................................................89
Arms Sales and Arms Transfers.............................................................................................9 10
Access to Assets.................................................................................................................. 1011
Declaration of National Emergency............................................................................... 1011
Proliferation of Weapons of Mass Destruction ............................................................... 1112
Counterfeiting and Money-Laundering.......................................................................... 1213
Concluding Observations .......................................................................................................... 13
Tables
Table C-1. North Korean Entities Cited for Proliferation Activities Under U.S. Law.................. 2014
Appendixes
Appendix A. Selected CRS Products Relating to North Korea ................................................... 1415
Appendix B. North Korea—Economic Sanctions Currently Imposed in Furtherance of
U.S. Foreign Policy or National Security Objectives............................................................... 1516
Appendix C. North Korean Entities Cited for Proliferation Activities UnderActivities in Violation of U.S. Law .............. 20........ 21
Appendix D. North Korean Individuals Cited for Prohibited Activities Under U.S. Law ............ 2729
Contacts
Author Contact Information ...................................................................................................... 2729
Congressional Research Service
North Korea: Legislative Basis for U.S. Economic Sanctions
Background
The United States imposes economic sanctions on North Korea for activities related to weapons
proliferation, destabilizing the region, anti-terrorism, and undemocratic governance. United States
; regional disruptions; terrorism; narcotics trafficking; undemocratic governance; and
illicit activities in international markets, including money laundering, counterfeiting of goods and
currency, and bulk cash smuggling. United States law has been applied to North Korea in the
following ways in response to the North Korean
government’s objectionable activities:1
1
•
North Korea poses a threat to U.S. national security because of “the current
existence and risk of the proliferation of weapons-usable fissile material on the
Korean Peninsula”, as declared by President George W. Bush on June 26, 2008,
under the terms of the National Emergencies Act and the International
Emergency Economic Powers Act;2,2 and expanded and adjusted by President
Obama in 2010 and 2011;3
•
North Korea is cited by the United Nations Security Council3Council4 for its nuclear
weapons and ballistic missiles pursuits, withdrawal from the Treaty on the NonProliferation of Nuclear Weapons, and contribution to regional tensions; the
United States meets the requirements as a member state of the United Nations
pursuant to the United Nations Participation Act of 1945 to implement sanctions
adopted by the U.N. Security Council;
•
North Korea is a Marxist-Leninist state, with a Communist government, and
stated as such in the Export-Import Bank Act of 1945, as amended, and further
restricted under the Foreign Assistance Act of 1961;
•
North Korea has engaged in proliferation of weapons of mass destruction, the
State Department finds pursuant to the Arms Export Control Act, Export
Administration Act of 1979, Iran, North Korea, and Syria Nonproliferation Act of
2000, and a national emergency declared by President George H.W. Bush relating
to the proliferation of such weapons;
•
North Korea is not cooperating fully with U.S. antiterrorism efforts, the State
Department has determined, under terms of the Arms Export Control Act; and
1
Appendix B lists U.S. statutory authorities used to form the economic sanctions regime.
2
Executive Order 13466, “Continuing Certain Restrictions With Respect to North Korea and North Korean Nationals,”
73 F.R. 36787, June 26, 2008; 31 CFR Part 510, November 4, 2010. The same day, the President found that continuing
the national emergency first
proclaimed under authority of the Trading With the Enemy Act (Presidential Proclamation
2914; December 16, 1950;
15 F.R. 9029) was “no longer in the national interest of the United States.” Presidential
Proclamation 8271; June 26,
2008; 73 F.R. 36785. That day, he also certified that the Government of North Korea had
met the requirements of U.S.
law to be found to no longer support acts of international terrorism. Memorandum of June
26, 2008; 73 F.R. 37351.
The Secretary of State, a few months later, issued a rescission of North Korea’s listing as a
terrorist supporter, as
required by law. Department of State Public Notice 6415; October 11, 2008; 73 F.R. 63540. CRS
Report RL31696,
North Korea: Economic Sanctions Prior to Removal from Terrorism Designation, provides details on
the statutes
relating to a terrorism designation.
The President is required to continue annually any national emergency he issues under the National Emergencies Act,
or it expires, along with the sanctions established under the International Emergency Economic Powers Act (IEEPA).
President Obama renewed the national emergency declared in Executive Order 13466 in memoranda issued on June 24,
2009 (74 F.R. 30457), and again on June 14, 2010 (75 F.R. 34317).
3
Executive Order 13551, “Blocking Property of Certain Persons With Respect to North Korea,” 75 F.R. 53837, August
30, 2010; and Executive Order 13570, “Prohibiting Certain Transactions With Respect to North Korea,” 76 F.R. 22291,
April 20, 2011.President Obama cited sec. 5 of the United Nations Participation Act of 1945 (P.L. 79-264; 22 U.S.C.
287c) authorities in addition to those provided in NEA and IEEPA.
4
United Nations Security Council Resolution 1718 (2006), October 14, 2006 (U.N. document S/Res/1718 (2006);
United Nations Security Council Resolution 1874 (2009), June 12, 2009 (U.N. document S/Res/1874 (2009).
2
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North Korea: Legislative Basis for U.S. Economic Sanctions
2000, and a national emergency declared by President George H. W. Bush
relating to the proliferation of such weapons;
•
North Korea is not cooperating fully with U.S. antiterrorism efforts, the State
Department has determined, under terms of the Arms Export Control Act; and
•
North Korea has detonated a nuclear explosive device, President George W. Bush
has determined, pursuant to the Arms Export Control Act, the Atomic Energy
Act, and the Export-Import Bank Act of 1945.
At the President’s discretion, North Korea also could be subject to economic sanctions provided
in three provisions of law addressing human rights conditions: the Foreign Assistance Act of
1961, the International Religious Freedom Act of 1998, and the Trafficking Victims Protection
Act of 2000.
The United States’ concerns about North Korea’s pursuit of nuclear weapons capability emerged
in the 1980s when that country’s nuclear weapons program became apparent. In the 1990s, the
two countries negotiated an Agreed Framework to freeze North Korea’s plutonium-based nuclear
energy program and provide heavy fuel oil until light-water reactors could be brought on-line, all
funded to varying degrees by the European Union, Japan, South Korea, and the United States. In
October 2002, it came to light in negotiations between U.S. and North Korean government
officials that North Korea was pursuing a uranium-based nuclear weapons capability. Diplomacy
over North Korea’s nuclear weapons program then entered a new phase; the Agreed Framework
was abandoned and the United States, North Korea, South Korea, China, Japan, and Russia
convened a new forum—the Six Party Talks. Despite several steps forward, including the United
States ending decades-long sanctions imposed at the outset of the 1950-1953 conflict and its
designationdelisting of North Korea as a supporter of international terrorism, the Six Party Talks collapsed
in in
late 2008.
During this period and continuing today, North Korea engaged in a number of acts that the
international community has deemed provocative. Over July 5-6, 2006, and again in April 2009,
North Korea tested short-range and long-range ballistic missiles with varying degrees of success,
the first tests since 1998. On October 8, 2006, and again on May 25, 2009, North Korea reported
that it had detonated a nuclear explosive device. The international community responded to the
missile tests and nuclear detonations by taking the issue to the U.N. Security Council, which
adopted resolutions that condemned the weapons tests and called on member states to impose
economic sanctions.
On March 26, 2010, a South Korean Navy ship, the Cheonan, was struck by a torpedo while
sailing in the West Sea. The ship sunksank and 46 crew members were killed. The South Korean
Ministry of National Defense formed a Civilian-Military Joint Investigation Group—with
participants from five other nations including the United States—which found that the Cheonan
was torpedoed by a North Korean submarine. North Korea denied involvement. The U.N.
Security Council, in a presidential statement, condemned the attack, and acknowledged both the
findings of the Investigation Group and the disavowal by North Korea.4
President Obama assigned responsibility to North Korea for the sinking of the Cheonan when, on
August 30, 2010, he announced he was expanding the scope of the national emergency declared
in 2006, and the United States was taking additional steps to curtail economic activity with North
Korea:
45
5
Civilian-Military Joint Investigation Group, On the Attack Against the ROK Ship Cheonan, Ministry of National
Defense, Republic of Korea, September 2010; U.N. Security Council, Presidential Statement (U.N. document,
S/PRST/2010/13, July 9, 2010).
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North Korea: Legislative Basis for U.S. Economic Sanctions
…President Obama assigned responsibility to North Korea for the sinking of the Cheonan when, on
August 30, 2010, he announced he was expanding the scope of the national emergency declared
in 2008, and the United States was taking additional steps to curtail economic activity with North
Korea:
the continued actions and policies of the Government of North Korea, manifested most
recently by its unprovoked attack that resulted in the sinking of the Republic of Korea Navy
ship Cheonan and the deaths of 46 sailors in March 2010; its announced test of a nuclear
device and its missile launches in 2009; its actions in violation of UNSCRs 1718 and 1874,
including the procurement of luxury goods; and its illicit and deceptive activities in
international markets through which it obtains financial and other support, including money
laundering, the counterfeiting of goods and currency, bulk cash smuggling, and narcotics
trafficking, destabilize the Korean peninsula and imperil U.S. Armed Forces, allies, and
trading partners in the region, and thereby constitute an unusual and extraordinary threat to
the national security, foreign policy, and economy of the United States.56
President Obama’s explicit identification of all features of North Korea’s objectionable behavior
constituting the threat is unusual compared to other invocations of IEEPA authorities.67 The statute
requires only that the President find that a threat to U.S. national security, foreign policy, or
economy exists, and that its source is “in whole or substantial part outside the United States….”
Justifying the declaration of the emergency based on North Korea’s attack of the Cheonan and
other acts of regional destabilization, pursuit of weapons of mass destruction and the means to
deliver them, noncompliance with U.N. requirements, money laundering, counterfeiting,
smuggling, and narcotics trafficking, accomplishes a number of goals:
•
It confirms the United States’ full support of and participation in implementation
of the U.N. Security Council resolutions.
•
It provides a clear list of concerns members of the U.S. diplomatic corps maymight
raise and emphasize when speaking with North Korea’s trading partners and
benefactors.
•
It states indisputable goals for North Korea to strive toward, meet, and surpass.
It should be noted, however, that each of these forms of objectionable behavior likely would be
grounds, under current law, for restricting trade, aid, arms sales, and access to assets even if the
national emergency were to be revoked.
U.S. Economic Sanctions Currently in Place
Contrary to commonly expressed views, the United States does not maintain a comprehensive
embargo against North Korea. The U.S. government does not prohibit travel to North Korea, for
example, nor does it deny trade in basic goods. United States economic sanctions imposed on
North Korea, as a result both of requirements in U.S. law and decisions made in the executive
branch to exercise discretionary authorities, have the following impact:
6
Executive Order 13551, “Blocking Property of Certain Persons With Respect to North Korea,” 75 F.R. 53837,
September 1, 2010.
7
50 U.S.C. 1701 notes.
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•
Trade is minimal and mostly limited to food, medicine, and humanitarian-related
goods. North Korea is in the most restricted export control country group, has no
other humanitarianrelated goods. North Korea has no advantageous trade status, and is outright
denied certain goods—including luxury
goods—and trade financing, primarily due to its proliferation activities. Imports
5
Executive Order 13551, “Blocking Property of Certain Persons With Respect to North Korea,” 75 F.R. 53837,
September 1, 2010.
6
50 U.S.C. 1701 notes.
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require a license, and using a
due to its proliferation activities. The Department of Commerce places North
Korea in the two most restricted country groups for exports; imports require a
license from the Treasury Department’s Office of Foreign Assets Control; using a
North Korea-flagged vessel for any transaction is
prohibited.
•
Aid is minimal and mostly limited to refugees fleeing North Korea,; broadcasting
into the country,; nongovernmental organization programs dedicated to
democracy promotion, human rights, and governance,; emergency food aid,; and
aid related to disabling and dismantling the country’s nuclear weapons program.
By law, U.S. representatives in the international financial institutions (IFI) are
required to vote against any support for North Korea due to its nuclear weapons
ambitions. Human rights and environmental activities would also likely result in
U.S. objections to participation in the IFI.
•
Arms sales and arms transfers are fully denied.
•
Access to assets of certain individuals and entities, should such assets come
under U.S. jurisdiction, is blocked.
Trade
The United States curtails trade with North Korea for reasons of regional stability, that country’s
support for acts of international terrorism (though North Korea is no longer designated as a state
sponsor of terrorism), lack of cooperation with U.S. antiterrorism efforts, proliferation, and its
status as a Communist country and a nonmarket economy. The United States also prohibits
transactions relating to trade with certain North Korean entities identified as those who procure
luxury goods, launder money, smuggle bulk cash, engage in counterfeiting goods and currency,
and traffic in illicit narcotics.
National Emergency Because of Threat to U.S. National Security
Trade with North Korea is significantly restricted because of that country’s demonstrated pursuit
of nuclear weapons and the means to deliver them. Though President Bush, in June 2008,
determined that North Korea had cleared the bar toand would no longer be characterized as a state sponsor
sponsor of acts of international terrorism, and Secretary of State Rice, in October 2008, removed the
the terrorism designation, the Department of Commerce continues to restrict exports to North Korea
Korea for anti-terrorism reasons.
Commerce’s primary means of controlling exports is through the administration of Export
Administration Regulations (EAR), in which goods to be controlled for a variety of reasons—
national security, foreign policy, short supply, compliance with international agreements, to name
a few—are categorized. Recipient countries are also characterized, from allies for which little
licensing is required, to rogue states for which export licensing is all but completely denied.
Commerce identifies North Korea among the most restricted trade destinations—Country Group
E:1, Terrorist Supporting Countries—which severely limits its access to computers, software,
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North Korea: Legislative Basis for U.S. Economic Sanctions
national security-controlled items, items on the Commerce Control List (CCL),78 and service or
repair of such items. A U.S. exporter intending to ship any goodgoods subject to the Export
Administration Regulations (EAR), except for food and medicine not on the CCL, is required to
obtain an export license.
7
The Secretary of Commerce establishes and administers the Commerce Control List (CCL), goods controlled for
national security reasons, pursuant to sec. 5(c) of the Export Administration Act of 1979 (P.L. 96-72; 50 U.S.C. App.
2404(c)).
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North Korea: Legislative Basis for U.S. Economic Sanctions
Commerce also identifies North Korea in the second most restrictive country group—Country
Group D. (U.S. exports to countries in Group D are restricted for reasons of national security
[D:1], nuclear activities [D:2], chemical and biological weapons activities [D:3], and missile
technology activities [D:4]). As a result, U.S. exporters are likely to be denied licenses to export
any controlled item if North Korea is the destination. In June 2007, Commerce eased licensing
requirements so that food, medicine, and humanitarian assistance items could be made available,
but at the same time imposed new licensing prohibitions on the export and reexport of luxury
goods to implement the terms of U.N. Security Council Resolution 1718.89
Thus, a U.S. company may apply for a license to export to North Korea, but for nearly all items
other than food and medicine, there is a presumption of denial. The EAR identify license
exceptions; those wishing to export to North Korea, however, are not eligible for these exceptions
except in highly circumscribed instances.910
The Office of Foreign Assets Control, within the Department of the Treasury, must approve any
U.S. importation from North Korea, and weighs all requests in the context of proliferation and
who in North Korea might profit. Generally, any transfer from the government of North Korea to
a person under U.S. jurisdiction is prohibited.10
United States persons are also prohibited from registering a vessel in North Korea, obtaining
authorization to fly the North Korean flag on a vessel, or own, lease, operate, or insure any vessel
so flagged. 11
Terrorism
North Korea is among those countries listed as being in violation of section 40A of the Arms
Export Control Act, which prohibits the selling or licensing of defense articles or defense services
to any country that the President finds “is not cooperating fully with United States antiterrorism
8
11 The President, in Executive Order 13570 of April
18, 2011, stated:
Except to the extent provided in statutes or in licenses, regulations, orders, or directives that
may be issued pursuant to this order, and notwithstanding any contract entered into or any
8
The Secretary of Commerce establishes and administers the Commerce Control List (CCL), goods controlled for
national security reasons, pursuant to sec. 5(c) of the Export Administration Act of 1979 (P.L. 96-72; 50 U.S.C. App.
2404(c)).
9
Department of Commerce. Bureau of Industry and Security. 15 CFR Parts 732, 738, 740, 742, 746, 772, and 774.
“North Korea: Imposition of New Foreign Policy Controls.” January 26, 2007; 72 F.R. 3722-3730. The notice
identifies luxury goods to include, in part:
…luxury automobiles; yachts; gems; jewelry; other fashion accessories; cosmetics; perfumes; furs;
designer clothing; luxury watches; rugs and tapestries; electronic entertainment software and
equipment; recreational sports equipment; tobacco; wine and other alcoholic beverages; musical
instruments; art; and antiques and collectible items, including but not limited to rare coins and
stamps. These and similar items have been imported by North Korea for the use and benefit of
government officials and their families, rather than for the good of the North Korean people.
This language generally is stated at 15 CFR Part 746.4(b)(1). See also Supplement No. 1 to 15 CFR Part 746—
Examples of Luxury Goods following 15 CFR Part 746.
910
15 CFR Part 746.4(b)(4) provides that licenses “are subject to a general policy of approval” if the intended export is a
humanitarian item “(e.g., blankets, basic footware, heating oil, and other items meeting subsistence needs) intended for
the benefit of the North Korean people; items in support of United Nations humanitarian efforts; and agricultural
commodities or medical devices items that are determined by BIS [Bureau of Industry and Security].” 15 CFR Part
746.4(c) provides that some licensing is possible for items used by news media, U.S. government, International Atomic
Energy Agency (IAEA), the European Atomic Energy Community (Euratom), safe operation of civil aircraft, operation
technology related to other legally exported commodities, and some gift parcels if no luxury goods are included.
10
31 CFR Part 500.586.
11
Executive Order 13466, “Continuing Certain Restrictions With Respect to North Korea and North Korean
Nationals,” 73 F.R. 36787, June 26, 2008; 31 CFR Part 500.586.
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11
31 CFR Part 500.586.
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license or permit granted prior to the date of this order, the important into the United States,
directly or indirectly, of any goods, services, or technology from North Korea is prohibited.12
United States persons seeking to import a product from North Korea must determine, and inform
OFAC, whether the product to be imported is produced by
•
“a foreign person whose actions triggered” import sanctions for certain missile
proliferation activities;
•
“an activity of the government of North Korea relating to the development or
production of any missile equipment or technology; or”
•
“an activity of the government of North Korea affecting the development or
production of electronics, space systems or equipment, and military aircraft.”13
The regulations do not define what might be related to the development or production of
materials used in missiles, electronics, space systems, military aircraft, and related technology.
United States persons are also prohibited from registering a vessel in North Korea; obtaining
authorization to fly the North Korean flag on a vessel; or owning, leasing, operating, or insuring
any vessel so flagged. 14
Terrorism
North Korea is among those countries listed as being in violation of section 40A of the Arms
Export Control Act, which prohibits the selling or licensing of defense articles or defense services
to any country that the President finds “is not cooperating fully with United States antiterrorism
efforts.” The President is required to make such a determination annually, and the prohibition
may be waived on grounds that it is in the national interest to do so. 1215
Nonmarket Economy
The Trade Agreement Extension Act of 1951 required the suspension of Most-Favored-Nation
trade status (MFN, which is now known as Normal Trade Relations (NTR)) for all
Communist countries except Yugoslavia. As a result, North Korea was denied MFN trade status
on September 1, 1951.
North Korea remains listed in the headnotes of the Harmonized Tariff Schedule of the United
States (HTSUS) as a Rate of Duty Column 2 country (along with Cuba). As a result, while trade
is not prohibited with North Korea under the relevant trade laws, tariffs are set at the highest rates
for imports from that country. 13 A side result of being denied MFN or NTR status is that any such
16 A side result of being denied MFN or NTR status is that any such
12
Section1, Executive Order 13570, 76 F.R. 22291, April 18, 2011.
31 CFR Part 500.586(b)(2)(i).
14
Executive Order 13466, “Continuing Certain Restrictions With Respect to North Korea and North Korean
Nationals,” 73 F.R. 36787, June 26, 2008; 31 CFR Part 500.586. See also 31 CFR Part 510, issued November 4, 2010.
15
22 U.S.C. 2781. The most recent certification, issued by the Secretary of State on May 5, 2010 (75 F.R. 28848),
includes Cuba, Eritrea, Iran, North Korea, Syria, and Venezuela. This section of law was added to the Arms Export
Control Act in late 1996; North Korea has been included on the list each year since its inception.
16
Harmonized Tariff Schedule of the United States, general note 3(b).
13
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country is also denied preferential trade treatment under the Generalized System of Preferences
(GSP), pursuant to the Trade Act of 1974.1417 As a nonmarket economy found to deny its citizens
the right or opportunity to emigrate, North Korea is not eligible to participate in any U.S.
government program that makes credit, credit guarantees, or investment guarantees available, nor
may the President enter into any commercial agreement with the country.1518
Proliferator
On several occasions, North Korean entities have been found to be in violation of U.S. missile
nonproliferation laws. 1619 Once a finding is made, the imposition of sanctions is mandatory, though
sanctions may be waived if the President finds it “essential to the national security of the United
States” to do so. The severity of the sanction depends on the type of material or technology
transferred. The duration of the sanction also depends on the material or technology involved;
generally sanctions are imposed for two years or more.
Sanctions include, at a minimum, a denial of contracts with agencies of the U.S. government,
denial of licenses for items on the U.S. Munitions List (USML),1720 and, at a maximum, a denial of
all licenses for importing into the United States for the foreign person or entity.
12
22 U.S.C. 2781. The most recent certification, issued by the Secretary of State on May 5, 2010 (75 F.R. 28848),
includes Cuba, Eritrea, Iran, North Korea, Syria, and Venezuela. This section of law was added to the Arms Export
Control Act in late 1996; North Korea has been included on the list each year since its inception.
13
Harmonized Tariff Schedule of the United States, general note 3(b).
14
Section 502(b)(1) of P.L. 93-618 (19 U.S.C. 2461).
15
Because North Korea is a nonmarket economy, 21 all relevant activities of the government of
North Korea are also sanctioned when entities in North Korea are found to have engaged in
proliferation under U.S. law.
With the nuclear weapons test of October 8, 2006, President Bush exercised the authority granted
his office to cut off all foreign aid except humanitarian and food aid, deny sales or transfers of
defense articles and defense services, deny export licenses for items on the USML, deny foreign
military financing, deny credit underwritten or provided by government coffers, withhold U.S.
support in the international financial institutions, deny export licenses for dual-use items, and
17
Section 502(b)(1) of P.L. 93-618 (19 U.S.C. 2461).
Section 402 of the Trade Act of 1974, popularly referred to as the Jackson-Vanik amendment (19 U.S.C. 2432), and
sec. 409 of that Act (19 U.S.C. 2439).
1619
Section 73 of the Arms Export Control Act (P.L. 90-629; 22 U.S.C. 2797b), sec. 11B of the Export Administration
Act (P.L. 96-72; 50 U.S.C. App. 2410b), and secs. 2 and 3 of the Iran, North Korea, and Syria Nonproliferation Act of
2000 (P.L. 106-178; 50 U.S.C. 1701 note), as amended. North Korea was added to the latter Act on October 13, 2006,
with the signing into law of the North Korea Nonproliferation Act of 2006 (P.L. 109-353; 120 Stat. 2015). See
Appendices C and D for lists of North Korean entities and individuals, respectively, cited for proliferation activities,
and the country in which the trading partner was likely based (when available).
1720
“In furtherance of world peace and the security and foreign policy of the United States, the President is authorized to
control the import and export of defense articles and defense services and to provide foreign policy guidance to persons
of the United States involved in the export and import of such articles and services.” To accomplish this, the President
is authorized to designate items to be controlled—the United States Munitions List (USML). Section 38(a)(1) of the
Arms Export Control Act (P.L. 90-629; 22 U.S.C. 2778(a)(1)). The USML may be found at 22 CFR Part 121.1.
21
Section 74(a)(8)(B) of the Arms Export Control Act (P.L. 90-629; 22 U.S.C. 2797c(a)(8)(B)) applies restrictions to a
government of a country deemed to be a nonmarket economy when an entity under the jurisdiction of that government
engages in missile proliferation activities, because the separation between government and commerce is not distinct.
Section 74 provides, in part: “…in the case of countries with non-market economies … the term ‘person’ means … all
activities of that government relating to the development or production of any missile equipment or technology; and …
all activities of that government affecting the development or production of electronics, space systems or equipment,
and military aircraft….”
18
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North Korea: Legislative Basis for U.S. Economic Sanctions
withhold Export-Import Bank support.22. Section 38(a)(1) of the Arms
(continued...)
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North Korea: Legislative Basis for U.S. Economic Sanctions
Because North Korea is a nonmarket economy, all relevant activities of the government of North
Korea are also sanctioned when entities in North Korea are found to have engaged in proliferation
under U.S. law.
With the nuclear weapons test of October 8, 2006, President Bush exercised the authority granted
his office to cut off all foreign aid except humanitarian and food aid, deny sales or transfers of
defense articles and defense services, deny export licenses for items on the USML, deny foreign
military financing, deny credit underwritten or provided by government coffers, withhold U.S.
support in the international financial institutions, deny export licenses for dual-use items, and
withhold Export-Import Bank support.18 At the time, the United States already maintained a fairly
comprehensive sanctions regime on North Korea, thus most of these relationships were already
broken or limited.
Aid
North Korea’s access to U.S. foreign assistance is limited in annual foreign operations
appropriations measures.1923 Under the current Department of State, Foreign Operations, and
Related Related
Programs Appropriations Act,20 24 North Korea is generally denied direct foreign aid,
economic economic
support funds (ESF) for energy-related programs, and direct loans, credits, insurance
and and
guarantees of the Export-Import Bank. The prohibitions on direct foreign aid to North Korea
also also
make that country ineligible for Millennium Challenge Account programs. 21
(...continued)
Export Control Act (P.L. 90-629; 22 U.S.C. 2778(a)(1)).
18
25
At the President’s discretion, North Korea is also subject to the economic sanctions provided in
three provisions of law addressing human rights conditions: the Foreign Assistance Act of 1961,26
under which North Korea is annually castigated for its human rights record; the International
22
Section 102 of the Arms Export Control Act (P.L. 90-629; 22 U.S.C. 2799aa-1), popularly referred to as the Glenn
amendment; sec. 2(b)(4) of the Export-Import Bank Act of 1945 (P.L. 79-173; 12 U.S.C. 635(b)(4)); and the current
Department of State, Foreign Operations, and Related Programs Appropriations Act, 2010 (division F of the
Consolidated Appropriations Act, 2010; P.L. 111-117; 123 Stat. 3034 at 3312), relating to Export-Import Bank
funding. On December 7, 2006, President Bush determined that North Korea, a non-nuclear-weapon state, had
detonated a nuclear explosive device, citing sec. 102(b) of the Arms Export Control Act and sec. 129 of the Atomic
Energy Act. Presidential Determination No. 2007-07. Public Papers of the President. December 18, 2006.
1923
When appropriations law prohibits the availability of foreign aid, however, numerous exceptions to the law allow aid
to be made available for targeted programs. Thus, programs in nonproliferation, demining, child survival, conservation
and biodiversity, food aid, debt buybacks, health and disease prevention, unanticipated contingencies, international
disaster assistance, and antiterrorism, may be funded or supported in spite of country-specific restrictions. The
President also is authorized, under sec. 614 of the Foreign Assistance Act of 1961 (22 U.S.C. 2364) to furnish foreign
aid “without regard to any provision of this Act, the Arms Export Control Act, any law relating to receipts and credits
accruing to the United States, and any Act authorizing or appropriating funds for use under this Act….”
2024
Division F of the Consolidated Appropriations Act, 2010 (P.L. 111-117; 123 Stat. 3034 at 3312), as continued by
sec. 1101(a)(6) of the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (P.L. 112-10; 125
Stat. 38). See particularly ). See particularly
sec. 7007—Prohibition Against Direct Funding for Certain Countries (123 Stat. 3345); and
sec. 7071(f)—Asia/North
Korea (123 Stat. 3390). Korea (123 Stat. 3390). Section 2120(d)(6) of P.L. 112-10 removes a discretionary restriction
on food aid for FY2011 stated in the FY2010 Act, which read, in part: “(6) … the Secretary of State shall report to the
Committees on Appropriations the amount the Secretary determines the Government of North Korea owes the
Government of the United States for the unsupervised distribution of food assistance provided by the United States:
Provided, that the Secretary of State should reduce any assistance made available to the Government of North Korea by
such amount, unless the Secretary reports … that the Government of North Korea provided such food assistance to
eligible recipients as intended ….”
Subsequent to its nuclear tests, North Korea would also be denied U.S. Export-Import Bank
support under this Act—
see title VI (123 Stat. 3341). Certain targeted populations and programs, however, are eligible
for foreign aid in FY2010: refugees from North Korea may be benefactors of U.S. migration and refugee assistance; up
to $8 million is availableIn the Korean Human Rights Act of 2004 (P.L. 108-333; 22 U.S.C. 7801 et seq.),
Congress authorized funding for FY2005 through 2012 for various aid and diplomacy programs for refugees from
North Korea (migration and refugee assistance); up to $8 million for broadcasting into the country; $3.5 million in
economic support funds is available for
for programs promoting democracy, human rights, and governance; and ESF may be usedEconomic Support
Funds to promote human rights,
address needs of North Korean refugees, improve accountability of humanitarian
assistance inside the country, improve
the flow of information into and out of the country, and promote a peaceful
reunification of the peninsula under a
democratic government, all pursuant to the North Korean Human Rights Act of 2004 (P.L. 108-333; 22 U.S.C. 7801 et
seq.).
21 democratic government.
25
Millennium Challenge Act of 2003 (division D of title VI of P.L. 108-199; 22 U.S.C. 7701 et seq.); Millennium
Challenge Corporation, “Report on Countries That Are Candidates for Millennium Challenge Account Eligibility in
Fiscal Year 2011 and Countries that Would Be Candidates But for Legal Prohibitions,” Notice of August 25, 2010 (75
(continued...)F.R. 52990).
26
Sections 116 and 502B of P.L. 87-195 (22 U.S.C. 2151n and 2304, respectively), as amended.
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North Korea: Legislative Basis for U.S. Economic Sanctions
At the President’s discretion, North Korea is also subject to the economic sanctions provided in
three provisions of law addressing human rights conditions: the Foreign Assistance Act of 1961,22
under which North Korea is annually castigated for its human rights record; the International
Religious Freedom Act of 1998,23Religious Freedom Act of 1998,27 under which the administration has identified North Korea as a
“country of particular concern” since 2001; and the Trafficking Victims Protection Act of 2000,2428
under which the administration has, since 2003, classified North Korea as a Tier 3 (most severe)
offender of standards pertaining to the trafficking of persons for slavery or sex trade. Because of
North Korea’s failure to comply with minimum standards relating to trafficking in persons,
President Obama, in 2010, strengthened the sanctions against North Korea to deny foreign
assistance and also to deny “funding for participation by officials or employees of such
governments in educational and cultural exchange programs for the subsequent fiscal
year….”25Any year.”29Any
sanctions imposed pursuant to these acts would be largely redundant, however,
with penalties
already prescribed to North Korea for the above-stated reasons.
Under the current Department of Defense Appropriations Act, 2011, North Korea is denied assistance
under that
act “unless specifically appropriated for that purpose.”2630
Nonmarket Economy
The Export-Import Bank Act of 1945 singles out Marxist-Leninist countries for denial of
guarantees, insurance, credit, or other Bank funding programs. North Korea is specifically cited
as a Marxist-Leninist country for purposes of the Export-Import Bank.2731
The Foreign Assistance Act of 1961 denies most non-humanitarian foreign assistance to any
Communist country. North Korea is among five countries so designated, though the law is not
limited to those countries named. 2832
Several laws deny benefits or assistance to Communist countries, but do not explicitly name any
particular state. Because North Korea has been denied such benefits or aid in the course of the
events of the early 1950s and thereafter, these other sections of law would probably be redundant
if applied to or cited for North Korea.
(...continued)
F.R. 52990).
22
Sections 116 and 502B of P.L. 87-195 (22 U.S.C. 2151n and 2304, respectively), as amended.
23
P.L. 105-292 (22 U.S.C. 6401 et seq.).
24
P.L. 106-386 (22 U.S.C. 7101 et seq.).
25
Sec. 110(d)(1)(A)(ii) of P.L. 106-386; Presidential Memorandum of September 13, 2010, relating to trafficking in
persons. White House press office. http://www.whitehouse.gov.
26
Section 8044 of the Department of Defense Appropriations Act, 2010 (P.L. 111-118; 123 Stat. 3438).
27
In some instances, the President may determine that, for purposes of a particular law, North Korea
is no longer a “Marxist-Leninist state.” If, however, all other aspects of the U.S.-North Korea
relationship were to improve, it would probably be necessary for Congress to remove North
Korea from the list set out in the Export-Import Bank Act and the Foreign Assistance Act of 1961,
27
28
P.L. 105-292 (22 U.S.C. 6401 et seq.).
P.L. 106-386 (22 U.S.C. 7101 et seq.).
29
Sec. 110(d)(1)(A)(ii) of P.L. 106-386; Presidential Determination No. 2011-15 of September 10, 2010 (75 F.R.
67017).
30
Section 8042 of the Department of Defense Appropriations, 2011 (division A of P.L. 112-10; 125 Stat. 68).
31
Section 2(b)(2) of P.L. 79-173 (12 U.S.C. 635(b)(2)); amended in 1986 to include this ban on funding to MarxistLeninist states.
2832
Section 620(f) of P.L. 87-195 (22 U.S.C. 2370(f)). Consider also subsec. (h) of that section, which requires the
President to “adopt regulations and establish procedures to insure that United States foreign aid is not used in a manner
which, contrary to the best interests of the United States, promotes or assists the foreign aid projects or activities of any
country that is a Communist country for purposes of subsection (f).” Consider also sec. 5(b) of the Export
Administration Act of 1979 (P.L. 96-72; 50 U.S.C. App. 2404(b)), which requires the President to “establish as a list of
controlled countries those countries set forth in section 620(f) of the Foreign Assistance Act of 1961....”
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In some instances, the President may determine that, for purposes of a particular law, North Korea
is no longer a “Marxist-Leninist state.” If, however, all other aspects of the U.S.-North Korea
relationship were to improve, it would probably be necessary for Congress to remove North
Korea from the list set out in the Export-Import Bank Act and the Foreign Assistance Act of 1961,
or necessary for the President to exercise waiver authority made available to his office under
those Actsacts, to make these other laws inapplicable to North Korea.2933
Arms Sales and Arms Transfers
The International Traffic in Arms Regulations (ITAR), administered by the Department of
State, begins:
It is the policy of the United States to deny licenses and other approvals for exports and
imports of defense articles and defense services, destined for or originating in certain
countries. This policy applies to Belarus, Cuba, Eritrea, Iran, North Korea, Syria and
Venezuela. This policy also applies to countries with respect to which the United States
maintains an arms embargo (e.g., Burma, China, Liberia, and Sudan) or whenever an export
would not otherwise be in furtherance of world peace and the security and foreign policy of
the United States.3034
The first ITAR was issued on August 26, 1955; North Korea has been listed as a restricted
country from the ITAR’s inception. North Korea is also restricted under ITAR as the United
States denies North Korea conventional arms to comply with U.N. Security Council
requirements. 3135
Importing of defense articles and defense services is similarly restricted by the Department of
Justice’s Bureau of Alcohol, Tobacco, Firearms, and Explosives, the regulations of which state:
It is the policy of the United States to deny licenses and other approvals with respect to
defense articles and defense services originating in certain countries or areas. This policy
applies to Afghanistan, Belarus (one of the states composing the former Soviet Union),
Cuba, Iran, Iraq, Libya, Mongolia, North Korea, Sudan, Syria, and Vietnam. This policy
applies to countries or areas with respect to which the United States maintains an arms
embargo (e.g., Burma, China, the Democratic Republic of the Congo, Haiti, Liberia,
Rwanda, Somalia, Sudan, and UNITA (Angola)). It also applies when an import would not
be in furtherance of world peace and the security and foreign policy of the United States.3236
Again, the President has the authority to change these regulations by removing North Korea from
the list of restricted countries.
2933
For example: sec. 620(h) of the Foreign Assistance Act of 1961 (P.L. 87-195; 22 U.S.C. 2370(h)), secs. 502(b)(1)
and (b)(2)(A) of the Trade Act of 1974 (P.L. 93-618; 19 U.S.C. 2462(b)(2)(A)), sec. 5(b) of the Export Administration
Act of 1979 (P.L. 96-72; 50 U.S.C. App. 2404(b)), and sec. 43 of the Bretton Woods Agreements Act (P.L. 79-171; 22
U.S.C. 286aa), the latter of which requires the U.S. Executive Directors to the International Monetary Fund “to actively
oppose any facility involving use of Fund credit by any Communist dictatorship....”
3034
22 CFR Part 126.1(a), authorized pursuant to sec. 38 of the Arms Export Control Act (P.L. 90-629; 22 U.S.C. 2778).
3135
U.N. Security Council Resolution 1718 (2006), October 14, 2006 (U.N. document S/Res/1718 (2006)); U.N. Security
Council Resolution 1874 (2009), June 12, 2009 (U.N. document S/Res/1874 (2009)).
36).
32
27 CFR Part 447.52, also authorized under sec. 38 of the Arms Export Control Act.
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North Korea: Legislative Basis for U.S. Economic Sanctions
Access to Assets
Declaration of National Emergency
On June 26, 2008, when the Six Party Talks appeared to be making progress, President Bush
determined it was no longer in the national interest to continue certain restrictions imposed on
trade and transactions with North Korea, in place since 1950.3337 At the same time, however, he
found that—3438
…the current existence and risk of the proliferation of weapons-usable fissile material on the
Korean Peninsula constitute an unusual and extraordinary threat to the national security and
foreign policy of the United States, and I hereby declare a national emergency to deal with
that threat. I further find that, as we deal with that threat through multilateral diplomacy, it is
necessary to continue certain restrictions with respect to North Korea that would otherwise
be lifted pursuant to a forthcoming proclamation that will terminate the exercise of
authorities under the Trading With the Enemy Act…. Accordingly, I hereby order… the
following are blocked and may not be transferred, paid, exported, withdrawn, or otherwise
dealt in:
•
all property and interests in property of North Korea or a North Korean national that …
were blocked as of June 16, 2000,39 and remained blocked immediately prior to the date
of this order.
•
United States persons may not register a vessel in North Korea, obtain authorization for
a vessel to fly the North Korean flag, or own, lease, operate, or insure any vessel flagged
by North Korea.
Generally, the President has the authority to change regulations, as long as those changes meet the
requirements of any relevant law. He must also annually revisit his declaration of a state of
national emergency; it expires if the President does not renew it. He could allow the declaration
to expire, or he could lift it at any time. And Congress could terminate a declaration of national
emergency by passing a joint resolution under terms of the National Emergencies Act.
3337
The President. “Termination of the Exercise of Authorities Under the Trading With the Enemy Act With Respect to
North Korea,” Proclamation 8271 (June 26, 2008; 73 F.R. 36785). On December 16, 1950, President Truman invoked
authority granted his office under the Trading With the Enemy Act (TWEA) to declare that a U.S. national emergency
existed because of the outbreak of the Korean War (and events elsewhere, as “world conquest by communist
imperialism is a goal of the forces of aggression that have been loosed upon the world”) (Proclamation 2914; 15 F.R.
9029). A few days later, the Department of the Treasury issued Foreign Assets Control Regulations (FACR; 31 CFR
Part 500; 15 F.R. 9040, December 19, 1950, and subsequently amended) to forbid any financial transactions involving,
or on behalf of, North Korea and China, including transactions related to travel or the access to North Korean assets
that were subject to U.S. jurisdiction. Korea-related FACR have been modified on numerous occasions to take into
consideration new circumstances (i.e., transactions relating to technology not in existence at the time the regulations
were issued) or to ease restrictions in response to changing conditions (i.e., signing of the Agreed Framework,
emerging reports of famine, North Korea’s announced moratorium on missile testing).
3438
Executive Order 13466, “Continuing Certain Restrictions With Respect to North Korea and North Korean
Nationals,” 73 F.R. 36787, June 26, 2008. 31 CFR Part 510, November 4, 2010.
39
In 1999, President Clinton announced he would lift many restrictions on U.S. exports to and imports from North
Korea in areas other than those controlled for national security concerns; the Departments of Commerce, Treasury, and
Transportation issued new regulations a year later, effective June 16, 2000, to implement the new policy.
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Proliferation of Weapons of Mass Destruction
On June 28, 2005, President George W. Bush expanded the authority granted his office to address
the threat posed by the proliferation of weapons of mass destruction—authority first exercised by
President George H. W. Bush in 1990—to freeze assets and property of those engaged in the
proliferation of weapons of mass destruction. The 41st President had declared that the United
States faced a national emergency relating to weapons proliferation (in the absence, at the time, of
a reauthorized Export Administration Act), and thus took steps in 1990 to control the exports of
certain goods and services, and authorized a ban on foreign aid and credit, procurement contracts,
imports and exports, support in international financial institutions, and landing rights.3540 Fifteen
years later, the 43rd President’s executive order took additional steps to block property and assets
under U.S. jurisdiction of any person found, in part—
... to have engaged, or attempted to engage, in activities or transactions that have materially
contributed to, or pose a risk of materially contributing to, the proliferation of weapons of
mass destruction or their means of delivery (including missiles capable of delivering such
weapons), including any efforts to manufacture, acquire, possess, develop, transport, transfer
or use such items, by any person or foreign country of proliferation concern;
... to have provided, or attempted to provide, financial, material, technological or other
support for, or goods or services in support of, any activity or transaction described [above]
... or any person whose property and interests in property are blocked pursuant to this order
...3641
At its outset, Executive Order 13382 identified eight foreign entities as contributors to
proliferation, of which three were North Korean. The Department of the Treasury’s Office of
Foreign Assets Control (OFAC) subsequently added another 19 North Korean entities and four
individuals to this restricted list. In the same findings, OFAC identified entities operating out of
Switzerland, Iran, China, South Korea, Russia, Sudan, Syria, United Arab Emirates, Venezuela,
Belgium, and Belarus, as entities engaging in WMD proliferation.37
3542
40
Executive Order 12735 of November 16, 1990. On the same day, the President announced his intention to pocket
veto H.R. 4653—the Omnibus Export Amendments Act of 1990—with which Congress intended to reauthorize the
then-expired Export Administration Act of 1979. In his announcement, President Bush stated his intentions to curtail
significantly trade in goods and services that lent themselves to the proliferation of weapons of mass destruction. See
“Memorandum of Disapproval for the Omnibus Export Amendments Act of 1990,” Public Papers of the President,
November 16, 1990. 26 Weekly Comp. Pres. Doc. 1839. E.O. 12735 was subsequently overhauled by President Clinton
with the issuance of Executive Order 12938 (November 14, 1994; 59 F.R. 59099; 50 U.S.C. 1701 note). The national
emergency therein is renewed annually.
3641
Executive Order 13382, Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters
(June 28, 2005; 70 F.R. 38567).
3742
For details, see Appendix C0. See also, Department of the Treasury. Office of Foreign Assets Control.
“Nonproliferation: What
You Need to Know About Treasury Restrictions.” Information Bulletin, most recently updated
September 7, 2010,
http://www.treas.gov/offices/enforcement/ofac/programs/wmd/wmd.shtml. See also testimony of
Robert W. Werner,
Director of the Office of Foreign Assets Control, Department of the Treasury, before the House
Committee on
Financial Services, February 16, 2006.
On January 9, 2007, the Department of the Treasury announced that it had designated Bank Sepah, a state-owned
Iranian financial institution, as an entity materially contributing to Iran’s proliferation activities. Bank Sepah,
coincidentally, according to Treasury, is credited with transferring more than $500,000 for an associate of the Korean
Mining Development Corporation. That entity was cited on December 28, 2006, under the Iran, North Korea, and Syria
Nonproliferation Act of 2000, for exporting missile technology to Iran. Department of the Treasury. Press release.
Iran’s Bank Sepah Designated by Treasury: Sepah Facilitating Iran’s Weapons Program. January 9, 2007. HP-219;
Weisman, Steven. “U.S. Prohibits All Transactions with a Major Iranian Bank,” The New York Times. January 10,
(continued...)
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Counterfeiting and Money-Laundering
On September 12, 2005, the Treasury Department found that Banco Delta Asia—a Macau-based
bank in which North Korea had holdings of more than $ U.S. 50 million—was a “financial
institution of primary money laundering concern.”3843 The Treasury Department’s Financial Crimes
Enforcement Center (FinCen) found that North Korea may reap as much as $500 million annually
from counterfeiting, and another $100-to- million to $200 million annually from narcotics trafficking. The
The finding authorizes the Secretary of the Treasury to require “special measures”3944 on the part of
U.S. financial institutions and financial agencies that involve increased record keeping and
reporting on Banco Delta Asia’s transactions. Treasury issued a final rule, effective April 18,
2007, to impose the most stringent fifth special measure—to prohibit certain bank transactions—
and issued regulations to implement the rule.4045 The finding and initial proposed rulemaking had a
chilling effect on Banco Delta Asia’s international business relations. Department of the Treasury
officials testified that—
some two dozen financial institutions across the globe have voluntarily cut back or
terminated their business with North Korea, notably including institutions in China, Japan,
Vietnam, Mongolia, and Singapore. The result of these voluntary actions is that it is
becoming very difficult for the Kim Jong-Il regime to benefit from its criminal conduct.4146
North Korea’s funds held in Banco Delta Asia were released in 2007; Banco Delta Asia, however,
remains under the most stringent fifth special rule.
President Obama also addresses money laundering and counterfeiting in Executive Order 13551
as one of North Korea’s many objectionable behaviors to be deterred. The Orderorder requires the
access to property and interests in property be blocked for any individual or entity identified by
the Secretary of the Treasury to have, directly or indirectly:4247
•
imported, exported, or reexported to, into, or from North Korea any arms or related
materiel;
(...continued)
2007. p. 3. Korean Mining Development Corporation is cited multiple times under Executive Order 13882.
3843
Pursuant to 31 U.S.C. 5318A, as enacted by the USA PATRIOT Act (§Sec. 311 of P.L. 107-56; 115 Stat. 298). Effective
Effective September 12, 2005, the Treasury Department’s Financial Crimes Enforcement Network issued a finding (70
F.R.
55214) and a notice of proposed rulemaking (to amend 31 CFR Part 103; 70 F.R. 55217). Documentation on the
use of
this authority may be found at http://www.fincen.gov/statutes_regs/patriot/section311.html
3944
31 U.S.C. 5318A(b) defines “special measures” as (1) record keeping and reporting of certain financial transactions;
(2) collection of information relating to beneficial ownership; (3) collection of information relating to certain payablethrough accounts; (4) collection of information relating to certain correspondent accounts; and (5) prohibitions or
conditions on opening or maintaining in the United States correspondent accounts or payable-through accounts.
4045
Department of the Treasury. “Financial Crimes Enforcement Network; Amendment to the Bank Secrecy Act
Regulations—Imposition of Special Measure Against Banco Delta Asia, Including Its Subsidiaries Delta Asia Credit
Limited and Delta Asia Insurance Limited, as a Financial Institution of Primary Money Laundering Concern,” Final
Rule, 31 CFR Part 103 (72 F.R. 12730).
4146
Senate Committee on Banking, Housing and Urban Affairs hearings, September 12, 2006, testimony of Treasury
Deputy Under Secretary Daniel Glaser. Congressional Quarterly.
4247
Executive Order 13551, “Blocking Property of Certain Persons With Respect to North Korea,” 75 F.R. 53837,
September 1, 2010.
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•
provided training, advice, or other services or assistance, or engaged in financial
transactions, related to the manufacture, maintenance, or use of any arms or related
materiel to be imported, exported, or reexported to, into, or from North Korea, or
following their importation, exportation, or reexportation to, into, or from North Korea;
•
imported, exported, or reexported luxury goods to or into North Korea;
•
engaged in money laundering, the counterfeiting of goods or currency, bulk cash
smuggling, narcotics trafficking, or other illicit economic activity that involves or
supports the Government of North Korea or any senior official thereof;
•
materially assisted, sponsored, or provided financial, material, or technological support
for, or goods or services to or in support of, prohibited activities or any person whose
property and interests in property are blocked; or
•
be owned or controlled by, or to have acted or purported to act for or on behalf of, any
person whose property and interests in property are blocked.
Concluding Observations
The U.S. economic sanctions imposed on North Korea exemplify both the independent and
intertwined aspects of the relationship between the legislative and executive branches. Congress
defers the broadest power to the President, in the National Emergencies Act and the International
Emergency Economic Powers Act, to curtail trade and transactions between the United States and
North Korea. Congress authorizes the President to fine-tune the relationship with North Korea for
foreign policy and national security reasons with each waiver authority it incorporates into
legislation. At the same time, Congress closely influences the President’s choices by enacting
issue-driven legislation—addressing human rights matters or proliferation concerns, for
example—and by adopting North Korea-specific statutes—most particularly the North Korean
Human Rights Act of 2004 (P.L. 108-333), the North Korean Human Rights Reauthorization Act
of 2008 (P.L. 110-346), and the inclusion of North Korea into the Iran, North Korea, and Syria
Nonproliferation Act of 2000 (P.L. 106-178).48
As Congress and the President consider proposals to reform foreign aid, streamline export
controls, fund defense and international programs, keep proliferation regimes relevant, assess and
enter into treaties and international agreements, and participate in multilateral fora, the
effectiveness of economic sanctions as a foreign policy and national security tool is likely to be
considered. U.S. policy toward North Korea, expressed both unilaterally and in the United States’
position in multilateral fora, is further complicated by other considerations—not the least of
which include relations with other states in the region, security responsibilities with South Korea,
trade with China, a determination to keep key stakeholders engaged in nonproliferation efforts in
both North Korea and elsewhere, and finding the means to balance all U.S. foreign policy and
national security interests in a meaningful way.
48
In the 112th Congress, Members have introduced legislation to prohibit funding to establish a diplomatic presence in
North Korea and to, in effect, reimpose sanctions related to a terrorist designation under sec. 6(j) of the Export
Administration Act of 1979 (P.L. 96-72; 50 U.S.C. app. 2405(j)), sec. 620A of the Foreign Assistance Act of 1961
(P.L. 87-195; 22 U.S.C. 2371), and sec. 40(d) of the Arms Export Control Act (P.L. 90-629; 22 U.S.C. 2780(d)) (the
North Korea Sanctions and Diplomatic Nonrecognition Act of 2011; H.R. 1321).
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North Korea: Legislative Basis for U.S. Economic Sanctions
Appendix A. Selected CRS Products Relating to
North Korea
Overview
CRS Report R41259, North Korea: U.S. Relations, Nuclear Diplomacy, and Internal Situation,
by Emma Chanlett-Avery and Mi Ae Taylor
CRS Report RL30613, North Korea: Back on the Terrorism List?, by Mark E. Manyin
CRS Report R41043, China-North Korea Relations, by Dick K. Nanto and Mark E. Manyin
CRS Report RL31696, North Korea: Economic Sanctions Prior to Removal from Terrorism
Designation, by Dianne E. Rennack
Proliferation
CRS Report R40684, North Korea’s Second Nuclear Test: Implications of U.N. Security Council
Resolution 1874, coordinated by Mary Beth Nikitin and Mark E. Manyin
CRS Report RL34256, North Korea’s Nuclear Weapons: Technical Issues, by Mary Beth Nikitin,
CRS Report R41160, North Korea’s 2009 Nuclear Test: Containment, Monitoring, Implications,
by Jonathan Medalia
North Korea’s Economy
CRS Report RL34093, The Kaesong North-South Korean Industrial Complex, by Dick K. Nanto
and Mark E. ManyinMark E.
Manyin and Dick K. Nanto
CRS Report RL32493, North Korea: Economic Leverage and Policy Analysis, by Dick K. Nanto
and Emma Chanlett-Avery
CRS Report RL33324, North Korean Counterfeiting of U.S. Currency, by Dick K. Nanto
Foreign Aid
CRS Report R40095, Foreign Assistance to North Korea, by Mark E. Manyin and Mary Beth
Nikitin
CRS Report R41749, Non-Governmental Organizations Activities in North Korea, by Mi Ae
Taylor and Mark E. Manyin
Congressional Research Service
1415
Appendix B. North Korea—Economic Sanctions Currently Imposed in
Furtherance of U.S. Foreign Policy or National Security Objectives
Rationale
General foreign policy reasons
Restriction
Limits the export of goods or
services
Statutory Basis
[regulation]
Export Administration Act of
1979 (P.L. 96-72; 50 U.S.C. App.
2401 et seq.)
Authority
to impose
Authority to
lift or waive
President, Secretary of
Commerce, generally
President, Secretary of
Commerce, generally
[15 CFR Part 730-774]
General foreign policy reasons
Limits proportionate share to
international organizations
which, in turn, expend funds in
North Korea
Sec. 307, Foreign Assistance Act
of 1961 (P.L. 87-195; 22 U.S.C.
2227)
Statutory requirement
No waiver; exemption for
certain IAEA programs
General foreign policy reasons
Prohibits assistance from
defense appropriations
Sec. 80448042, Department of
Defense Appropriations Act,
2010 (P.L. 111-118; 123 Stat.
3438, 2011
(P.L. 112-10; 125 Stat. 68)
Statutory requirement
No waiver
General foreign policy reasons
Prohibits bilateral assistance
Sec. 7007, Department of State,
Foreign Operations, and Related
Programs Appropriations Act,
2010 (P.L. 111-117; 123 Stat.
3345), as continued by sec.
1101(a)(6), P.L. 112-10 (125
Stat. 104)
Statutory requirement
No waiver
Diplomatic relations severed
Prohibits most foreign aid and
agricultural sales under P.L. 480
Sec. 620(t), Foreign Assistance
Act of 1961 (P.L. 87-195; 22
U.S.C. 2370(t))
Statutory requirement
No waiver
National security controls,
Communism
Limits the export of goods or
services
Sec. 5, Export Administration
Act of 1979 (P.L. 96-72; 50
U.S.C. App. 2404)
President
President
Statutory requirement
President
[15 CFR Part 730-774]
Communism
CRS-1516
Prohibits foreign aid
Sec. 620(f), Foreign Assistance
Act of 1961 (P.L. 87-195; 22
U.S.C. 2370(f))
Rationale
Restriction
Statutory Basis
[regulation]
Authority
to impose
Authority to
lift or waive
Communism
Limits proportionate share to
international organizations
which, in turn, expend funds in
North Korea
Sec. 307, Foreign Assistance Act
of 1961 (P.L. 87-195; 22 U.S.C.
2227)
Statutory requirement
No waiver; exemption for
certain IAEA programs
Communism
Prohibits Export-Import Bank
funding to Marxist-Leninist
states
Sec. 2(b)(2), Export-Import Bank
Act of 1945 (P.L. 79-173; 12
U.S.C. 635(b)(2))
Statutory requirement
President
Communism
Prohibits support in the IFIs
Sec. 43, Bretton Woods
Agreements Act (P.L. 79-171; 22
U.S.C. 286aa)
Statutory requirement
Secretary of the Treasury
Communism
Limits the export of goods or
services
Sec. 5(b), Export Administration
Act of 1979 (P.L. 96-72; 50
U.S.C. App. 2404(b))
Statutory requirement
President
Communism
Denies favorable trade terms
Sec. 401, Trade Act of 1974 (19
U.S.C. 2431)
Statutory requirement
President
Nonmarket economy and
emigration
Denies favorable trade terms
Sec. 402, Trade Act of 1974 (19
U.S.C. 2432)
Statutory requirement
President
Nonmarket economy and
emigration
Denies favorable trade terms
Sec. 409, Trade Act of 1974 (19
U.S.C. 2439)
President
President
Communism and market
disruption
Denies favorable trade terms
Sec. 406, Trade Act of 1974 (19
U.S.C. 2436)
President
President
Communism
Prohibits the acquisition of
property in U.S. for diplomatic
mission
Sec. 205, State Department
Basic Authorities Act (P.L. 84885; 22 U.S.C. 4305)
Secretary of State
Secretary of State
Terrorism, failure to cooperate
with U.S. efforts
Prohibits transactions related to
defense articles and defense
services
Sec. 40A, Arms Export Control
Act (P.L. 90-629; 22 U.S.C.
2781)
President
President, at annual review, or
waived by the President if he
finds it “important to the
national interests of the United
States.”
Excessive military expenditure,
human rights violations
Prohibits the cancellation or
reduction of certain debt
Sec. 501, Miscellaneous
Appropriations, 2000 (H.R.
3425, enacted by reference in
P.L. 106-113; 22 U.S.C. 2395a
note)
Statutory requirement
President
CRS-1617
Rationale
Restriction
National emergency,
proliferation of weapons of mass
destruction
Blocks assets of named
proliferators of weapons of mass
destruction
Statutory Basis
[regulation]
International Emergency
Economic Powers Act (P.L. 95223; esp. at 50 U.S.C. 1702);
Authority
to impose
Authority to
lift or waive
President [Executive Order
13382, June 28, 2005; 50 U.S.C.
1701 note]
President
President [Executive Order
13466, June 26, 2008; 50 U.S.C.
1701 note]
President
International Emergency
Economic Powers Act (P.L. 95223; esp. at 50 U.S.C. 1702);
President [Executive Order
13551, August 30, 2010; 50
U.S.C. 1701 note]
President
National Emergencies Act (P.L.
94-412; 50 U.S.C. 1601 et seq.)
[expands on the national
emergency declared in E.O.
13466]
National Emergencies Act (P.L.
94-412; 50 U.S.C. 1601 et seq.)
National emergency
Prohibits imports, exports,
transactions related to
transportation
International Emergency
Economic Powers Act (P.L. 95223; esp. at 50 U.S.C. 1702);
National Emergencies Act (P.L.
94-412; 50 U.S.C. 1601 et seq.)
[31 CFR Part 500]
National emergency,
proliferation of weapons of mass
destruction, attack of the
Cheonan, nuclear detonations,
missile launches, violation of
UNSCR resolutions,
counterfeiting of goods and
currency, money laundering,
smuggling, narcotics trafficking,
destabilizing the region
Blocks assets of, and
transactions with or on behalf
of, named entities
Proliferation of weapons of mass
destruction: missiles
Prohibits a range of
transactions—U.S. Government
contracts, export licenses,
imports into United States
Sec. 73, Arms Export Control
Act (P.L. 90-629; 22 U.S.C.
2797b)
President
President
Proliferation of weapons of mass
destruction: nuclear enrichment
transfers
Prohibits foreign aid, military aid
Sec. 101, Arms Export Control
Act (P.L. 90-629; 22 U.S.C.
2799aa)
President
President
CRS-17
International Emergency
Economic Powers Act (P.L. 95223; esp. at 50 U.S.C. 1702);
National Emergencies Act (P.L.
94-412; 50 U.S.C. 1601 et seq.)
Statutory Basis
[regulation]
Authority
to impose
Authority to
lift or waive
Rationale
RestrictionTo ensure implementation of
import restrictions agreed to in
the U.N. Security Council
“Except to the extent provided
in statutes or in licenses,
regulations, orders, or directives
that may be issued pursuant to
this order…” prohibits
“importation into the United
States, directly or indirectly, of
any goods, services, or
technology from North Korea”
International Emergency
Economic Powers Act (P.L. 95223; esp. at 50 U.S.C. 1702);
President [Executive Order
13570, April 18, 2011; 50 U.S.C.
1701 note]
National Emergencies Act (P.L.
94-412; 50 U.S.C. 1601 et seq.)
[expands on the national
emergency declared in E.O.
13466]
Prohibits a range of
transactions—U.S. Government
contracts, export licenses,
imports into United States
Sec. 73, Arms Export Control
Act (P.L. 90-629; 22 U.S.C.
2797b)
Proliferation of weapons of mass
destruction: missiles
CRS-18
Sec. 5, United Nations
Participation Act of 1945 (P.L.
79-264; 22 U.S.C. 287c)
[31 CFR Part 510]
Sec. 5, United Nations
Participation Act of 1945 (P.L.
79-264; 22 U.S.C. 287c)
President
President
President
Statutory Basis
[regulation]
Authority
to impose
Authority to
lift or waive
Rationale
Restriction
Proliferation of weapons of mass
destruction: nuclear enrichment
transfers
Prohibits foreign aid, military aid
Sec. 101, Arms Export Control
Act (P.L. 90-629; 22 U.S.C.
2799aa)
President
President
Proliferation of weapons of mass
destruction: nuclear
reprocessing transfers, nuclear
detonations
Prohibits foreign aid (except
humanitarian), military aid, USG
defense sales and transfers,
export licenses for USML goods
and services, U.S. Governmentbacked credits, support in the
international banks, agricultural
credits or financing, U.S.
commercial bank financing,
licenses for export of certain
goods and services
Sec. 102, Arms Export Control
Act (P.L. 90-629; 22 U.S.C.
2799aa-1)
President
President
Proliferation of weapons of mass
destruction: nuclear detonations
Prohibits Export-Import Bank
financing
Sec. 2(b)(4) of the ExportImport Bank Act of 1945 (P.L.
79-173; 12 U.S.C. 635(b)(4))
Statutory requirement
President
Proliferation of weapons of mass
destruction: nuclear detonations
[though not explicitly stated as
such]
Prohibits Economic Support
Funds for energy-related
programs
Sec. 7071(f) of the Department
of State, Foreign Operations,
and Related Programs
appropriations Act, 2010 (P.L.
111-117; 123 Stat. 3390); as
continued by sec. 1101(a)(6),
P.L. 112-10 (125 Stat. 104)
Statutory requirement
No waiver
Proliferation of weapons of mass
destruction: nuclear detonations
Prohibits Export-Import Bank
financing
Title VI of the Department of
State, Foreign Operations, and
Related Programs
Appropriations Act, 2010 (P.L.
111-117; 123 Stat. 3341); as
continued by sec. 1101(a)(6),
P.L. 112-10 (125 Stat. 104)
Statutory requirement
No waiver
Proliferation of weapons of mass
destruction: missiles
Prohibits a range of
transactions—contracts, export
licenses, imports into US
Sec. 11B, Export Administration
Act (P.L. 96-72; 50 U.S.C. App.
2410b)
President
President
CRS-19
Rationale
Restriction
Statutory Basis
[regulation]
Authority
to impose
Authority to
lift or waive
Proliferation of weapons of mass
destruction
Prohibits a range of
transactions—arms sales and
exports, dual-use exports,
procurement contracts,
assistance, imports, support in
the international banks, credit,
landing rights
Sec. 3, Iran, North Korea, and
Syria Nonproliferation Act of
2000 (P.L. 106-178; 50 U.S.C.
1701 note)
President
President
CRS-18
Rationale
Restriction
Statutory Basis
[regulation]
Authority
to impose
Authority to
lift or waive
Human rights (trafficking in
persons)
Prohibits non-humanitarian
foreign aid, cultural exchanges,
support in international financial
institutions
Sec. 110, Trafficking Victims
Protection Act of 2000 (P.L.
106-386; 22 U.S.C. 7107)
President
President, waiver if in the
national interest
Counterfeiting, moneylaundering
Prohibits certain commercial
bank transactions
31 U.S.C. 5318A (generally
referred to by its amendatory
vehicle—Sec. 311, USA
PATRIOT Act)
Secretary of the Treasury
Secretary of the Treasury
CRS-1920
Appendix C. North Korean Entities Cited for Proliferation Activities Under
U.S. Law
Table C-1. North Korean Entities Cited for Proliferation Activities Under U.S. Activities in Violation of U.S.
Law
North Korean Entity
Effective Date/Cite
March 6, 1992
(57 F.R. 11767)
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
1718 and 1874, appear in bold]a
—Lyongaksan Machineries and Equipment
Export Corporation;
Possible Trading Partner
(cited in same finding)
Ministry of Defense and Armed
Forces (Iran)
—Changgwang Credit Corporation
Activity/Statute
Category I missile proliferation;
contribution to MTCR nonadherent
§73(a)(2)(B), (C), AECA
§11B(b)(1)(B)(ii), (iii), EAA
June 23, 1992
(57 F.R. 29924)
—Lyongaksan Machineries and Equipment
Export Corporation;
—Changgwang Credit Corporation
—Syrian Scientific Research Center
—Ministry of Defense (Syria)
Category I missile proliferation;
contribution to MTCR nonadherent
§73(a)(2)(B), (C), AECA
§11B(b)(1)(B)(ii), (iii), EAA
May 24, 1996
(61 F.R. 29785)
August 6, 1997
(62 F.R. 44302)
—Changgwang Sinyong Corporation
(Korea Mining Development Trading
Bureau)
—Lyongaksan General Trading
Corporation
—Ministry of Defense Armed Forces
Logistics (Iran)
—State Purchasing Office (Iran)
Unnamed entity cited on same date,
separate findingb
Category II missile proliferation
§73(a)(2)(A), AECA
§11B(b)(1)(B)(i), EAA
Category II missile proliferation
§73(a)(2)(A), AECA
§11B(b)(1)(B)(i), EAA
August 6, 1997
(62 F.R. 44302)
—Korea Pugang Trading Corporation
Unnamed entity cited on same date,
separate finding
Category II missile proliferation
§73(a)(2)(A), AECA
§11B(b)(1)(B)(i), EAA
CRS-20
North Korean Entity
Effective Date/Cite
April 17, 1998
(63 F.R. 24585)
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
1718 and 1874, appear in bold]a
—Changgwang Sinyong Corporation
(Korea Mining Development Trading
Corporation)
Possible Trading Partner
(cited in same finding)
Khan Research Laboratories (Pakistan)
Activity/Statute
Category I missile proliferation;
contribution to MTCR nonadherent
§73(a)(2)(B), (C), AECA
§11B(b)(1)(B)(ii), (iii), EAA
CRS-21
North Korean Entity
Effective Date/Cite
April 6, 2000
(65 F.R. 20239)
—Changgwang Sinyong Corporation[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
1718 and 1874, appear in bold]a
—Changgwang Sinyong Corporation
Possible Trading Partner
(cited in same finding)
Activity/Statute
—Ministry of Defense and Armed
Forces Logistics (MODAFL) (Iran)
Category I missile proliferation;
contribution to MTCR nonadherent
—Aerospace Industries Organization
(AIO) (Iran);
§73(a)(2)(B), (C), AECA
—Shahid Hemmat Industrial Group
(SHIG) (Iran)
§11B(b)(1)(B)(ii), (iii), EAA
—SANAM Industrial Group (Iran)
(Determination was made for an
unnamed entity April 7, 2000)
January 2, 2001
(66 F.R. 4050)
—Changgwang Sinyong Corporation
June 14, 2001
(66 F.R. 33988)
—Changgwang Sinyong Corporation
August 16, 2002
(67 F.R. 54693)
—Changgwang Sinyong Corporation
Iranian entity/ies
WMD proliferation
§§2 and 3, INA
Iranian entity/ies
WMD proliferation
§§2 and 3, INA
Unnamed entity cited on same date,
separate finding
Category II missile proliferation
§73(a)(2)(A), AECA
§11B(b)(1)(B)(i), EAA
March 24, 2003
(68 F.R. 16113)
—Changgwang Sinyong Corporation
Unnamed entity cited on same date,
separate finding
Category I missile proliferation;
contribution to MTCR nonadherent
§73(a)(2)(B), (C), AECA
§11B(b)(1)(B)(ii), (iii), EAA
June 26, 2003
(68 F.R. 40011)
CRS-21
—Changgwang Sinyong Corporation
Iranian entity/ies
WMD proliferation
§§2 and 3, INA
North Korean Entity
Effective Date/Cite
July 25, 2003
(68 F.R. 44136)
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
1718 and 1874, appear in bold]a
—Changgwang Sinyong Corporation
Possible Trading Partner
(cited in same finding)
Unnamed
Activity/Statute
—Changgwang Sinyong Corporation
July 25, 2003
(68 F.R. 44136)
—Changgwang Sinyong Corporation
Iranian entity/ies
WMD proliferation
§§2 and 3, INA
Unnamed
Category I missile proliferation,
contribution to MTCR nonadherent
§73(a)(2)(B), (C), AECA
§11B(b)(1)(B)(ii), (iii), EAA
CRS-22
North Korean Entity
Effective Date/Cite
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
1718 and 1874, appear in bold]a
April 1, 2004
(69 F.R. 18415)
—Changgwang Sinyong Corporation
September 23, 2004
(69 F.R. 58212)
—Changgwang Sinyong Corporation
November 24, 2004
(69 F.R. 69989)
—Changgwang Sinyong Corporation
December 27, 2004
(70 F.R. 133)
—Paeksan Associated Corporation
June 28, 2005
(70 F.R. 38567)c,d
—Korea Mining Development Trading
Corporation (Changgwang Sinyong
Corp.)
Possible Trading Partner
(cited in same finding)
Iranian entity/ies
Activity/Statute
WMD proliferation
§§2 and 3, INA
Iranian entity/ies
WMD proliferation
§§2 and 3, INA
Iranian entity/ies
WMD proliferation
§§2 and 3, INA
Iranian entity/ies
WMD proliferation
§§2 and 3, INA
N/A
WMD proliferation
E.O. 13382; E.O. 12938; IEEPA; NEA
—Korea Ryonbong General Corporation
—Tanchon Commercial Bank
(Changgwang Credit Bank)
October 21, 2005e
—Hesong Trading Corp.
N/A
—Korea Complex Equipment Import Corp.
WMD proliferation
E.O. 13382; E.O. 12938; IEEPA; NEA
—Korea International Chemical Joint Venture
Company
—Korea Kwangsong Trading Corp.
—Korea Pugang Trading Corp.
—Korea Ryonha Machinery Joint Venture
—Tosong Technology Trading Corp.
CRS-22
July 13, 2006
(71 F.R. 35857)
CRS-23
—Korea Ryongwang Trading Corporation
N/A
WMD proliferation
E.O. 13382; E.O. 12938; IEEPA; NEA
North Korean Entity
Effective Date/Cite
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
1718 and 1874, appear in bold]a
Possible Trading Partner
(cited in same finding)
N/A
Activity/Statute
July 13, 2006
(71 F.R. 35857)
—Korea Ryongwang Trading Corporation
Activity/Statute
December 7, 2006
(Presidential Determination
No. 2007-7; Public Papers of
the President, December 18,
2006; 72 F.R. 1899)
—Government of North Korea
December 28, 2006
(72 F.R. 606)
—Korea Mining [and] Development
Corporation
N/A [Iran mentioned in press accounts
around the same time]
WMD proliferation
September 26, 2007
(72 F.R. 54708)
—Korea Mining and Development
Corporation
—Aerospace Industries Organization
(AIO) (Iran)
WMD proliferation
E.O. 13382; E.O. 12938; IEEPA; NEA
N/A
§129 AEAN/A
§102(b)(2), AECA
§129 AEA
—Shahid Hemmat Industrial Group
(SHIG) (Iran)
September 26, 2007
(72 F.R. 54709)
—Korea Mining and Development
Corporation
§§2 and 3, INKSNA
E.O. 13382; E.O. 12938; IEEPA; NEA
—Aerospace Industries Organization
(AIO) (Iran)
Category I missile proliferation;
contribution to MTCR nonadherent
—Shahid Hemmat Industrial Group
(SHIG) (Iran)
§73(a)(2)(B), (C), AECA
[cited in separate finding, see above]
CRS-2324
Detonating a nuclear explosive device
§102(b)(2), AECA
—Shahid Hemmat Industrial Group
(SHIG) (Iran)
September 26, 2007
(72 F.R. 54709)
WMD proliferation
§11B(b)(1)(B)(ii), (iii), EAA
North Korean Entity
Effective Date/Cite
October 16, 2008
(73 F.R. 63227)
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
1718 and 1874, appear in bold]a
—Korea Mining and Development
Corporation
—Korea Taesong Trading Company
Possible Trading Partner
(cited in same finding)
Activity/Statute
—China Xinshidai Company (China)
WMD proliferation
—China Shipbuilding and Offshore
International Corporation (China)
§§2 and 3, INKSNA
—Huazhong CNC (China)
—Islamic Revolutionary Guard Corps
(Iran)
—Yolin/Yullin Tech, Inc., Ltd. (South
Korea)
—Rosoboronexport (Russia)
—Sudan Master Technology (Sudan)
—Sudan Technical Center Company
(Sudan)
—Army Supply Bureau (Syria)
—R and M International FZCO (United
Arab Emirates)
—Venezuelan Military Industries
Company (Venezuela)
February 2, 2009
(74 F.R. 5881; 74 F.R. 6943))
—Korea Mining and Development
Corporation
—Dalian Sunny Industries (LMMT
Economic and Trade Company) (China)
—Moksong Trading Corporation
—Bellamax (China)
—Sino-Ki
February 2, 2009
(74 F.R. 5882)
—Korea Mining and Development
Corporation
—Shahid Bakeri Industrial Group (Iran)
Category II missile proliferation
§73(a)(2)(A), AECA
§11B(b)(1)(B)(i), EAA
WMD proliferation
E.O. 13382; E.O. 12938; IEEPA; NEA
—Moksong Trading Corporation
—Sino-Ki
June 30, 2009
(74 F.R. 35226)
CRS-2425
—Namchongang Trading Corporation
N/A
WMD proliferation
E.O. 13382; E.O. 12938; IEEPA; NEA
North Korean Entity
Effective Date/Cite
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
1718 and 1874, appear in bold]a
July 30, 2009
(74 F.R. 41783)
—Korea Hyoksin Trading Corporation
August 11, 2009
(74 F.R. 41782)
—Korea Kwangson Banking Corp (KKBC)
September 3, 2009
(74 F.R. 47636)
—General Bureau of Atomic Energy
July 10, 2010
(75 F.R. 38212)
—Amroggang Development Bank
July 14, 2010
(75 F.R. 40862)
—Korea Mining [and] Development
Corporation
Possible Trading Partner
(cited in same finding)
Activity/Statute
N/A [Antares Shipping Company (IRISL
Benelux) (Belgium) identified around the
same date]
WMD proliferation
N/A [Antares Shipping Company (IRISL
Benelux) (Belgium) identified around the
same date]
WMD proliferation
N/A
WMD proliferation
—Korea Tangun Trading Corporation
E.O. 13382; E.O. 12938; IEEPA; NEA
E.O. 13382; E.O. 12938; IEEPA; NEA
E.O. 13382; E.O. 12938; IEEPA; NEA
N/A
WMD proliferation
E.O. 13382; E.O. 12938; IEEPA; NEA
—BelTechExport (Belarus)
WMD proliferation
—Karl Lee (China; individual)
§§2 and 3, INKSNA
—Dalian Sunny Industries (LMMT)
(China)
—Shanghai Technical By-Products
International (China)
—Zibo Chemet Equipment Company
(China)
—Defense Industries Organization
(Iran)
—Shahid Bakeri Industries Group (Iran)
August 30, 2010
(75 F.R. 53837)
—Green Pine Associated Corporation
N/A
—Reconnaissance General Bureau
E.O. 13551; IEEPA; NEA; U.N. Participation Act
—Office 39
August 30, 2010
(75 F.R. 54689)
—Second Academy of Natural Sciences
—Second Economic Committee
—Munitions Industry Department
CRS-2526
Violation of U.N. Security Council
Resolutions 1718 and 1874
N/A
WMD proliferation
E.O. 13382; E.O. 12938; IEEPA; NEA
North Korean Entity
Effective Date/Cite
September 27, 2010
(75 F.R. 61246)
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
1718 and 1874, appear in bold]a
—Green Pine Associated Corporation
Possible Trading Partner
(cited in same finding)
N/A
—Office 39
April 19, 2011
(Treasury Department Press
Release)
—Korea Daesong Bank
N/A
—Korea Daesong General Trading
Corporation
—Bank of East Land (Dongbang Bank)
Violation of U.N. Security Council
Resolutions 1718 and 1874
E.O. 13551; IEEPA; NEA; U.N. Participation Act
—Reconnaissance General Bureau
November 18, 2010
(75 F.R. 71794)
Activity/Statute
Violation of U.N. Security Council
Resolutions 1718 and 1874
E.O. 13551; IEEPA; NEA; U.N. Participation Act
N/A
Violation of U.N. Security Council
Resolutions 1718 and 1874
E.O. 13551; IEEPA; NEA; U.N. Participation Act
Notes:
MTCR = Missile Technology Control Regime
WMD = Weapons of Mass Destruction
AECA = Arms Export Control Act (P.L. 90-629)
EAA = Export Administration Act of 1979 (P.L. 96-72)
AEA = Atomic Energy Act (P.L. 83-703)
INA = Iran Nonproliferation Act of 2000 (P.L. 106-178)
ISNA = Iran and Syria Nonproliferation Act of 2000 (P.L. 106-178, INA, as amended by P.L. 109-112, 11/22/2005)
INKSNA = Iran, North Korea, and Syria Nonproliferation Act of 2000 (P.L. 106-178, ISNA, as further amended by P.L. 109-353, 10/13/2006)
E.O. = Executive Order
IEEPA = International Emergency Economic Powers Act (P.L. 95-223)
NEA = National Emergencies Act (P.L. 94-412)
OFAC = Office of Foreign Assets Control, Department of the Treasury
N/A = Not Available
a.
The United Nations Sanctions Committee, on April 24, 2009, and on July 16, 2009, identified entities and individuals subject to sanctions adopted in UNSCR 1718
(2006). This table lists only North Korean entities, though both the United Nations and the Department of the Treasury have also identified a number of individuals.
The United Nations also identifies Hong Kong Electronics, an entity located in Iran, which, the U.N. Sanctions Committee describes as “owned or controlled by, or
acts or purports to act for on behalf of Tanchon Commercial Bank and KOMID (Korea Mining [and] Development Corporation). Hong Kong Electronics has
transferred millions of dollars of proliferation-related funds on behalf of Tanchon Commercial Bank and KOMID … since 2007. Hong Kong Electronics has facilitated
the movement of money from Iran to the DPRK on behalf of KOMID.”
b.
Section 654 of the Foreign Assistance Act of 1961 (22 U.S.C. 2414) requires the President to publish determinations and findings in the Federal Register. In instances
where publication would be harmful to U.S. national security, however, “only a statement that a determination or finding has been made by the President, including the
name and section of the Act under which it was made, shall be published.”
CRS-27
c.
In testimony before the House Committee on Financial Services, Subcommittee on Oversight and Investigations, OFAC Director Robert Werner identified the Korea
Mining Development Trading Corporation as “Pyongyang’s premier arms dealer and main exporter of goods and equipment related to ballistic missiles and
conventional weapons”; “the North Korean defense conglomerate Korea Ryonbong General Corporation ... ” as a specialist “in acquisition for North Korean defense
industries and support to Pyongyang’s military-related sales ... identified in export control watch lists in the United States and among U.S. allies ... ”; and “Tanchon
Commercial Bank, headquartered in Pyongyang, inherited from the Korea Changgwang Credit Bank Corporation ... the role as the main North Korean financial agent
for sales of conventional arms, ballistic missiles, and good[s] related to the assembly and manufacture of such weapons. Since the late 1980s, Tanchon’s predecessor,
[Changgwang ... ]collected revenue from weapons-related sales that were concentrated in a handful of countries mainly located in the Mid-East and several African
states. These revenues provide North Korea with a significant portion of its export earnings and financially aid Pyongyang’s own weapons development and armsrelated purchases.” Capitol Hill Hearing Testimony, Congressional Quarterly. February 16, 2006.
d.
On March 30, 2006, the Department of the Treasury announced it would add Kohas AG, a Swiss company, and its president, Jakob Steiger, on the Blocked Entities list
under E.O. 13382, because of its financial ties to Korea Ryonbong General Corporation. A subsidiary of Ryonbong owns nearly half the outstanding shares of Kohas.
Department of the Treasury, Office of Foreign Assets Control. Amendment of final rule. 31 CFR Chapter v. 71 F.R. 39708 (July 13, 2006). Effective June 27, 2006.
Aversa, Jeannine. “U.S. Freezes Assets of Swiss Company Tied to North Korea,” Associated Press. March 30, 2006. Stuart Levey, Under Secretary for Terrorism and
Financial Intelligence, Department of the Treasury. Testimony before Senate Committee on Banking, Housing, and Urban Affairs, April 4, 2006, Congressional Quarterly.
e.
In his February 16, 2006 testimony before the House Committee on Financial Services, Subcommittee on Oversight and Investigations, OFAC Director Werner
identified Hesong Trading Corporation and Tosong Technology Trading Corporation as owned or controlled by parent company Changgwang Sinyong Corporation.
He further cited Korea Ryonbong General Corporation as the parent company of the remaining six entities identified for purposes of E.O. 13382.
CRS-2628
North Korea: Legislative Basis for U.S. Economic Sanctions
Appendix D. North Korean Individuals Cited for
Prohibited Activities Under U.S. Law
North Korean Individual
Effective Date/Cite
July 16, 2009
[those designated by the U.N.
Sanctions Committee, subject to
UNSCR 1718 and 1874, appear in
BOLD]
Activity/Statute
—Han Yu-ro (director of Korea
Ryongaksan General Trading
Corporation)
Violation of U.N. Security
Council Resolutions 1718 and
1874
—Hwang Sok-hwa (director of
General Bureau of Atomic Energy)
Violation of U.N. Security
Council Resolutions 1718 and
1874
—Kim Tong-myong (Tanchon
Commercial Bank)
WMD proliferation
August 30, 2010 (Department of
Treasury Press Release, TG-840)
—Ri Hong-sop (former director of
Yongbyon Nuclear Research Center)
WMD proliferation
August 30, 2010 (Department of
Treasury Press Release, TG-840)
—Ri Je-son (director of General
Bureau of Atomic Energy)
WMD proliferation
August 30, 2010 (Department of
Treasury Press Release, TG-840)
—Yun Ho-jin (director of
Namchongang Trading Corporation)
WMD proliferation
September 27, 2010 (OFAC
Notice; 75 F.R. 61246)
—Kim, Yong Chol
Violation of U.N. Security
Council Resolutions 1718 and
1874
Identified only by United
Nations
July 16, 2009
Identified only by United
Nations
October 2009
E.O. 13382; E.O. 12938; IEEPA; NEA
E.O. 13382; E.O. 12938; IEEPA; NEA
E.O. 13382; E.O. 12938; IEEPA; NEA
E.O. 13382; E.O. 12938; IEEPA; NEA
E.O. 13551; IEEPA; NEA; UNPA
Author Contact Information
Dianne E. Rennack
Specialist in Foreign Policy Legislation
drennack@crs.loc.gov, 7-7608
Congressional Research Service
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