North Korea: Legislative Basis for U.S.
Economic Sanctions
Dianne E. Rennack
Specialist in Foreign Policy Legislation
September 29, 2010
Congressional Research Service
7-5700
www.crs.gov
R41438
CRS Report for Congress
P
repared for Members and Committees of Congress

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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 the following consequences for U.S.-North Korea relations:
• Trade is minimal and mostly limited to food, medicine, and other humanitarian-
related 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 most restricted country
group for exports, imports require a license, and 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 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.
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.

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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 ........................................................................................................................ 5
Nonmarket Economy ...................................................................................................... 6
Proliferator...................................................................................................................... 6
Aid ....................................................................................................................................... 7
Nonmarket Economy ...................................................................................................... 8
Arms Sales and Arms Transfers............................................................................................. 9
Access to Assets.................................................................................................................. 10
Declaration of National Emergency............................................................................... 10
Proliferation of Weapons of Mass Destruction ............................................................... 11
Counterfeiting and Money-Laundering.......................................................................... 12
Concluding Observations .......................................................................................................... 13

Tables
Table C-1. North Korean Entities Cited for Proliferation Activities Under U.S. Law.................. 20

Appendixes
Appendix A. Selected CRS Products Relating to North Korea ................................................... 14
Appendix B. North Korea—Economic Sanctions Currently Imposed in Furtherance of
U.S. Foreign Policy or National Security Objectives............................................................... 15
Appendix C. North Korean Entities Cited for Proliferation Activities Under U.S. Law .............. 20
Appendix D. North Korean Individuals Cited for Prohibited Activities Under U.S. Law ............ 27

Contacts
Author Contact Information ...................................................................................................... 27

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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
law has been applied to North Korea in the following ways in response to the North Korean
government’s objectionable activities: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
• North Korea is cited by the United Nations Security Council3 for its nuclear
weapons and ballistic missiles pursuits, withdrawal from the Treaty on the Non-
Proliferation 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. 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 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).
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North Korea: Legislative Basis for U.S. Economic Sanctions

• 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
designation of North Korea as a supporter of international terrorism, the Six Party Talks collapsed
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 sunk 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:

4 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

…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.5
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.6 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 may
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:
• 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
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 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.
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 to no longer be characterized as a state sponsor
of acts of international terrorism, and Secretary of State Rice, in October 2008, removed the
terrorism designation, the Department of Commerce continues to restrict exports to North 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,
national security-controlled items, items on the Commerce Control List (CCL),7 and service or
repair of such items. A U.S. exporter intending to ship any good 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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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 1718.8
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.9
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 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.
9 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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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.12
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
country is also denied preferential trade treatment under the Generalized System of Preferences
(GSP), pursuant to the Trade Act of 1974.14 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.15
Proliferator
On several occasions, North Korean entities have been found to be in violation of U.S. missile
nonproliferation laws.16 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.
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),17 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 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).
16 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).
17 “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. Section 38(a)(1) of the Arms
(continued...)
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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.19 Under the current Department of State, Foreign Operations, and
Related Programs Appropriations Act,20 North Korea is generally denied direct foreign aid,
economic support funds (ESF) for energy-related programs, and direct loans, credits, insurance
and guarantees of the Export-Import Bank. The prohibitions on direct foreign aid to North Korea
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 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.
19 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….”
20 Division F of the Consolidated Appropriations Act, 2010 (P.L. 111-117; 123 Stat. 3034 at 3312). See particularly
sec. 7007—Prohibition Against Direct Funding for Certain Countries (123 Stat. 3345); and sec. 7071(f)—Asia/North
Korea (123 Stat. 3390). 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 available for broadcasting into the country; $3.5 million in economic support funds is available for
programs promoting democracy, human rights, and governance; and ESF may be used 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 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...)
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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 1998,23 under which the administration has identified North Korea as a
“country of particular concern” since 2001; and the Trafficking Victims Protection Act of 2000,24
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 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, North Korea is denied assistance
“unless specifically appropriated for that purpose.”26
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.27
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.28
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 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 Marxist-
Leninist states.
28 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 Acts, to make these other laws inapplicable to North Korea.29
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.30
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.31
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.32
Again, the President has the authority to change these regulations by removing North Korea from
the list of restricted countries.

29 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....”
30 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).
31 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).
32 27 CFR Part 447.52, also authorized under sec. 38 of the Arms Export Control Act.
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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 1950.33 At the same time, however, he
found that—34
…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, 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.

33 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).
34 Executive Order 13466, “Continuing Certain Restrictions With Respect to North Korea and North Korean
Nationals,” 73 F.R. 36787, June 26, 2008.
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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.35 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
...36
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

35 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.
36 Executive Order 13382, Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters
(June 28, 2005; 70 F.R. 38567).
37 For details, see Appendix C. 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.”38 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-$200 million annually from narcotics trafficking. The
finding authorizes the Secretary of the Treasury to require “special measures”39 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.40 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.41
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 Order 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:42
• 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.
38 Pursuant to 31 U.S.C. 5318A, as enacted by the USA PATRIOT Act (§ 311 of P.L. 107-56; 115 Stat. 298). 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
39 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 payable-
through 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.
40 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).
41 Senate Committee on Banking, Housing and Urban Affairs hearings, September 12, 2006, testimony of Treasury
Deputy Under Secretary Daniel Glaser. Congressional Quarterly.
42 Executive Order 13551, “Blocking Property of Certain Persons With Respect to North Korea,” 75 F.R. 53837,
September 1, 2010.
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North Korea: Legislative Basis for U.S. Economic Sanctions

• 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).
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.

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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. Manyin
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

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Appendix B. North Korea—Economic Sanctions Currently Imposed in
Furtherance of U.S. Foreign Policy or National Security Objectives
Statutory Basis
Authority
Authority to
Rationale Restriction [regulation]
to impose
lift or waive
General foreign policy reasons
Limits the export of goods or
Export Administration Act of
President, Secretary of
President, Secretary of
services
1979 (P.L. 96-72; 50 U.S.C. App.
Commerce, generally
Commerce, generally
2401 et seq.)
[15 CFR Part 730-774]
General foreign policy reasons
Limits proportionate share to
Sec. 307, Foreign Assistance Act
Statutory requirement
No waiver; exemption for
international organizations
of 1961 (P.L. 87-195; 22 U.S.C.
certain IAEA programs
which, in turn, expend funds in
2227)
North Korea
General foreign policy reasons
Prohibits assistance from
Sec. 8044, Department of
Statutory requirement
No waiver
defense appropriations
Defense Appropriations Act,
2010 (P.L. 111-118; 123 Stat.
3438)
General foreign policy reasons
Prohibits bilateral assistance
Sec. 7007, Department of State,
Statutory requirement
No waiver
Foreign Operations, and Related
Programs Appropriations Act,
2010 (P.L. 111-117; 123 Stat.
3345)
Diplomatic relations severed
Prohibits most foreign aid and
Sec. 620(t), Foreign Assistance
Statutory requirement
No waiver
agricultural sales under P.L. 480
Act of 1961 (P.L. 87-195; 22
U.S.C. 2370(t))
National security controls,
Limits the export of goods or
Sec. 5, Export Administration
President President
Communism
services
Act of 1979 (P.L. 96-72; 50
U.S.C. App. 2404)
[15 CFR Part 730-774]
Communism
Prohibits foreign aid
Sec. 620(f), Foreign Assistance
Statutory requirement
President
Act of 1961 (P.L. 87-195; 22
U.S.C. 2370(f))
CRS-15

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Statutory Basis
Authority
Authority to
Rationale Restriction [regulation]
to impose
lift or waive
Communism
Limits proportionate share to
Sec. 307, Foreign Assistance Act
Statutory requirement
No waiver; exemption for
international organizations
of 1961 (P.L. 87-195; 22 U.S.C.
certain IAEA programs
which, in turn, expend funds in
2227)
North Korea
Communism
Prohibits Export-Import Bank
Sec. 2(b)(2), Export-Import Bank Statutory requirement
President
funding to Marxist-Leninist
Act of 1945 (P.L. 79-173; 12
states
U.S.C. 635(b)(2))
Communism
Prohibits support in the IFIs
Sec. 43, Bretton Woods
Statutory requirement
Secretary of the Treasury
Agreements Act (P.L. 79-171; 22
U.S.C. 286aa)
Communism
Limits the export of goods or
Sec. 5(b), Export Administration
Statutory requirement
President
services
Act of 1979 (P.L. 96-72; 50
U.S.C. App. 2404(b))
Communism
Denies favorable trade terms
Sec. 401, Trade Act of 1974 (19
Statutory requirement
President
U.S.C. 2431)
Nonmarket economy and
Denies favorable trade terms
Sec. 402, Trade Act of 1974 (19
Statutory requirement
President
emigration
U.S.C. 2432)
Nonmarket economy and
Denies favorable trade terms
Sec. 409, Trade Act of 1974 (19
President President
emigration
U.S.C. 2439)
Communism and market
Denies favorable trade terms
Sec. 406, Trade Act of 1974 (19
President President
disruption
U.S.C. 2436)
Communism
Prohibits the acquisition of
Sec. 205, State Department
Secretary of State
Secretary of State
property in U.S. for diplomatic
Basic Authorities Act (P.L. 84-
mission
885; 22 U.S.C. 4305)
Terrorism, failure to cooperate
Prohibits transactions related to
Sec. 40A, Arms Export Control
President
President, at annual review, or
with U.S. efforts
defense articles and defense
Act (P.L. 90-629; 22 U.S.C.
waived by the President if he
services
2781)
finds it “important to the
national interests of the United
States.”
Excessive military expenditure,
Prohibits the cancellation or
Sec. 501, Miscel aneous
Statutory requirement
President
human rights violations
reduction of certain debt
Appropriations, 2000 (H.R.
3425, enacted by reference in
P.L. 106-113; 22 U.S.C. 2395a
note)
CRS-16

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Statutory Basis
Authority
Authority to
Rationale Restriction [regulation]
to impose
lift or waive
National emergency,
Blocks assets of named
International Emergency
President [Executive Order
President
proliferation of weapons of mass proliferators of weapons of mass Economic Powers Act (P.L. 95-
13382, June 28, 2005; 50 U.S.C.
destruction
destruction
223; esp. at 50 U.S.C. 1702);
1701 note]
National Emergencies Act (P.L.
94-412; 50 U.S.C. 1601 et seq.)
National emergency
Prohibits imports, exports,
International Emergency
President [Executive Order
President
transactions related to
Economic Powers Act (P.L. 95-
13466, June 26, 2008; 50 U.S.C.
transportation
223; esp. at 50 U.S.C. 1702);
1701 note]
National Emergencies Act (P.L.
94-412; 50 U.S.C. 1601 et seq.)
[31 CFR Part 500]
National emergency,
Blocks assets of, and
International Emergency
President [Executive Order
President
proliferation of weapons of mass transactions with or on behalf
Economic Powers Act (P.L. 95-
13551, August 30, 2010; 50
destruction, attack of the
of, named entities
223; esp. at 50 U.S.C. 1702);
U.S.C. 1701 note]
Cheonan, nuclear detonations,
missile launches, violation of
National Emergencies Act (P.L.
UNSCR resolutions,
94-412; 50 U.S.C. 1601 et seq.)
counterfeiting of goods and
currency, money laundering,
smuggling, narcotics trafficking,
destabilizing the region
Proliferation of weapons of mass Prohibits a range of
Sec. 73, Arms Export Control
President President
destruction: missiles
transactions—U.S. Government
Act (P.L. 90-629; 22 U.S.C.
contracts, export licenses,
2797b)
imports into United States
Proliferation of weapons of mass Prohibits foreign aid, military aid Sec. 101, Arms Export Control
President President
destruction: nuclear enrichment
Act (P.L. 90-629; 22 U.S.C.
transfers
2799aa)
CRS-17

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Statutory Basis
Authority
Authority to
Rationale Restriction [regulation]
to impose
lift or waive
Proliferation of weapons of mass Prohibits foreign aid (except
Sec. 102, Arms Export Control
President President
destruction: nuclear
humanitarian), military aid, USG
Act (P.L. 90-629; 22 U.S.C.
reprocessing transfers, nuclear
defense sales and transfers,
2799aa-1)
detonations
export licenses for USML goods
and services, U.S. Government-
backed credits, support in the
international banks, agricultural
credits or financing, U.S.
commercial bank financing,
licenses for export of certain
goods and services
Proliferation of weapons of mass Prohibits Export-Import Bank
Sec. 2(b)(4) of the Export-
Statutory requirement
President
destruction: nuclear detonations financing
Import Bank Act of 1945 (P.L.
79-173; 12 U.S.C. 635(b)(4))
Proliferation of weapons of mass Prohibits Economic Support
Sec. 7071(f) of the Department
Statutory requirement
No waiver
destruction: nuclear detonations
Funds for energy-related
of State, Foreign Operations,
[though not explicitly stated as
programs
and Related Programs
such]
appropriations Act, 2010 (P.L.
111-117; 123 Stat. 3390)
Proliferation of weapons of mass Prohibits Export-Import Bank
Title VI of the Department of
Statutory requirement
No waiver
destruction: nuclear detonations financing
State, Foreign Operations, and
Related Programs
Appropriations Act, 2010 (P.L.
111-117; 123 Stat. 3341)
Proliferation of weapons of mass Prohibits a range of
Sec. 11B, Export Administration
President President
destruction: missiles
transactions—contracts, export
Act (P.L. 96-72; 50 U.S.C. App.
licenses, imports into US
2410b)
Proliferation of weapons of mass Prohibits a range of
Sec. 3, Iran, North Korea, and
President President
destruction
transactions—arms sales and
Syria Nonproliferation Act of
exports, dual-use exports,
2000 (P.L. 106-178; 50 U.S.C.
procurement contracts,
1701 note)
assistance, imports, support in
the international banks, credit,
landing rights
CRS-18

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Statutory Basis
Authority
Authority to
Rationale Restriction [regulation]
to impose
lift or waive
Human rights (trafficking in
Prohibits non-humanitarian
Sec. 110, Trafficking Victims
President
President, waiver if in the
persons)
foreign aid, cultural exchanges,
Protection Act of 2000 (P.L.
national interest
support in international financial
106-386; 22 U.S.C. 7107)
institutions
Counterfeiting, money-
Prohibits certain commercial
31 U.S.C. 5318A (general y
Secretary of the Treasury
Secretary of the Treasury
laundering
bank transactions
referred to by its amendatory
vehicle—Sec. 311, USA
PATRIOT Act)
CRS-19

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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. Law
North Korean Entity
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
Possible Trading Partner
Effective Date/Cite
1718 and 1874, appear in bold]a
(cited in same finding)
Activity/Statute
March 6, 1992
—Lyongaksan Machineries and Equipment
Ministry of Defense and Armed
Category I missile proliferation;
(57 F.R. 11767)
Export Corporation;
Forces (Iran)
contribution to MTCR nonadherent
—Changgwang Credit Corporation
§73(a)(2)(B), (C), AECA
§11B(b)(1)(B)(ii), (iii), EAA
June 23, 1992
—Lyongaksan Machineries and Equipment
—Syrian Scientific Research Center
Category I missile proliferation;
(57 F.R. 29924)
Export Corporation;
contribution to MTCR nonadherent
—Ministry of Defense (Syria)
—Changgwang Credit Corporation
§73(a)(2)(B), (C), AECA
§11B(b)(1)(B)(ii), (iii), EAA
May 24, 1996
—Changgwang Sinyong Corporation
—Ministry of Defense Armed Forces
Category II missile proliferation
(61 F.R. 29785)
(Korea Mining Development Trading
Logistics (Iran)
Bureau)
§73(a)(2)(A), AECA
—State Purchasing Office (Iran)
§11B(b)(1)(B)(i), EAA
August 6, 1997
—Lyongaksan General Trading
Unnamed entity cited on same date,
Category II missile proliferation
(62 F.R. 44302)
Corporation
separate findingb
§73(a)(2)(A), AECA
§11B(b)(1)(B)(i), EAA
August 6, 1997
—Korea Pugang Trading Corporation
Unnamed entity cited on same date,
Category II missile proliferation
(62 F.R. 44302)
separate finding
§73(a)(2)(A), AECA
§11B(b)(1)(B)(i), EAA
CRS-20

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North Korean Entity
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
Possible Trading Partner
Effective Date/Cite
1718 and 1874, appear in bold]a
(cited in same finding)
Activity/Statute
April 17, 1998
—Changgwang Sinyong Corporation
Khan Research Laboratories (Pakistan)
Category I missile proliferation;
(63 F.R. 24585)
(Korea Mining Development Trading
contribution to MTCR nonadherent
Corporation)
§73(a)(2)(B), (C), AECA
§11B(b)(1)(B)(ii), (iii), EAA
April 6, 2000
—Changgwang Sinyong Corporation
—Ministry of Defense and Armed
Category I missile proliferation;
(65 F.R. 20239)
Forces Logistics (MODAFL) (Iran)
contribution to MTCR nonadherent
—Aerospace Industries Organization
§73(a)(2)(B), (C), AECA
(AIO) (Iran);
§11B(b)(1)(B)(ii), (iii), EAA
—Shahid Hemmat Industrial Group
(SHIG) (Iran)
—SANAM Industrial Group (Iran)
(Determination was made for an
unnamed entity April 7, 2000)
January 2, 2001
—Changgwang Sinyong Corporation Iranian
entity/ies
WMD proliferation
(66 F.R. 4050)
§§2 and 3, INA
June 14, 2001
—Changgwang Sinyong Corporation Iranian
entity/ies
WMD proliferation
(66 F.R. 33988)
§§2 and 3, INA
August 16, 2002
—Changgwang Sinyong Corporation
Unnamed entity cited on same date,
Category II missile proliferation
(67 F.R. 54693)
separate finding
§73(a)(2)(A), AECA
§11B(b)(1)(B)(i), EAA
March 24, 2003
—Changgwang Sinyong Corporation
Unnamed entity cited on same date,
Category I missile proliferation;
(68 F.R. 16113)
separate finding
contribution to MTCR nonadherent
§73(a)(2)(B), (C), AECA
§11B(b)(1)(B)(ii), (iii), EAA
June 26, 2003
—Changgwang Sinyong Corporation Iranian
entity/ies
WMD proliferation
(68 F.R. 40011)
§§2 and 3, INA
CRS-21

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North Korean Entity
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
Possible Trading Partner
Effective Date/Cite
1718 and 1874, appear in bold]a
(cited in same finding)
Activity/Statute
July 25, 2003
—Changgwang Sinyong Corporation Unnamed
Category I missile proliferation,
(68 F.R. 44136)
contribution to MTCR nonadherent
§73(a)(2)(B), (C), AECA
§11B(b)(1)(B)(ii), (iii), EAA
April 1, 2004
—Changgwang Sinyong Corporation Iranian
entity/ies
WMD proliferation
(69 F.R. 18415)
§§2 and 3, INA
September 23, 2004
—Changgwang Sinyong Corporation Iranian
entity/ies
WMD proliferation
(69 F.R. 58212)
§§2 and 3, INA
November 24, 2004
—Changgwang Sinyong Corporation Iranian
entity/ies
WMD proliferation
(69 F.R. 69989)
§§2 and 3, INA
December 27, 2004
—Paeksan Associated Corporation
Iranian entity/ies
WMD proliferation
(70 F.R. 133)
§§2 and 3, INA
June 28, 2005
—Korea Mining Development Trading
N/A
WMD proliferation
(70 F.R. 38567)c,d
Corporation (Changgwang Sinyong
Corp.)
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
WMD proliferation
—Korea Complex Equipment Import Corp.
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

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North Korean Entity
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
Possible Trading Partner
Effective Date/Cite
1718 and 1874, appear in bold]a
(cited in same finding)
Activity/Statute
July 13, 2006
—Korea Ryongwang Trading Corporation
N/A
WMD proliferation
(71 F.R. 35857)
E.O. 13382; E.O. 12938; IEEPA; NEA
December 7, 2006
—Government of North Korea
N/A
Detonating a nuclear explosive device
(Presidential Determination
No. 2007-7; Public Papers of
§102(b)(2), AECA
the President, December 18,
§129 AEA
2006; 72 F.R. 1899)
December 28, 2006
—Korea Mining [and] Development
N/A [Iran mentioned in press accounts
WMD proliferation
(72 F.R. 606)
Corporation
around the same time]
§§2 and 3, INKSNA
September 26, 2007
—Korea Mining and Development
—Aerospace Industries Organization
WMD proliferation
(72 F.R. 54708)
Corporation
(AIO) (Iran)
E.O. 13382; E.O. 12938; IEEPA; NEA
—Shahid Hemmat Industrial Group
(SHIG) (Iran)

September 26, 2007
—Korea Mining and Development
—Aerospace Industries Organization
Category I missile proliferation;
(72 F.R. 54709)
Corporation
(AIO) (Iran)
contribution to MTCR nonadherent
—Shahid Hemmat Industrial Group
§73(a)(2)(B), (C), AECA
(SHIG) (Iran)
§11B(b)(1)(B)(ii), (iii), EAA
[cited in separate finding, see above]
CRS-23

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North Korean Entity
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
Possible Trading Partner
Effective Date/Cite
1718 and 1874, appear in bold]a
(cited in same finding)
Activity/Statute
October 16, 2008
—Korea Mining and Development
—China Xinshidai Company (China)
WMD proliferation
(73 F.R. 63227)
Corporation
—China Shipbuilding and Offshore
§§2 and 3, INKSNA
—Korea Taesong Trading Company
International Corporation (China)
—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
—Korea Mining and Development
—Dalian Sunny Industries (LMMT
Category II missile proliferation
(74 F.R. 5881; 74 F.R. 6943))
Corporation
Economic and Trade Company) (China)
§73(a)(2)(A), AECA
—Moksong Trading Corporation
—Bel amax (China)
§11B(b)(1)(B)(i), EAA
—Sino-Ki
February 2, 2009
—Korea Mining and Development
—Shahid Bakeri Industrial Group (Iran)
WMD proliferation
(74 F.R. 5882)
Corporation
E.O. 13382; E.O. 12938; IEEPA; NEA
—Moksong Trading Corporation
—Sino-Ki
June 30, 2009
—Namchongang Trading Corporation N/A
WMD proliferation
(74 F.R. 35226)
E.O. 13382; E.O. 12938; IEEPA; NEA
CRS-24

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North Korean Entity
[those also designated by the U.N.
Sanctions Committee, subject to UNSCR
Possible Trading Partner
Effective Date/Cite
1718 and 1874, appear in bold]a
(cited in same finding)
Activity/Statute
July 30, 2009
—Korea Hyoksin Trading Corporation
N/A [Antares Shipping Company (IRISL
WMD proliferation
(74 F.R. 41783)
Benelux) (Belgium) identified around the
same date]
E.O. 13382; E.O. 12938; IEEPA; NEA
August 11, 2009
—Korea Kwangson Banking Corp (KKBC)
N/A [Antares Shipping Company (IRISL
WMD proliferation
(74 F.R. 41782)
Benelux) (Belgium) identified around the
same date]
E.O. 13382; E.O. 12938; IEEPA; NEA
September 3, 2009
—General Bureau of Atomic Energy
N/A
WMD proliferation
(74 F.R. 47636)
—Korea Tangun Trading Corporation
E.O. 13382; E.O. 12938; IEEPA; NEA
July 10, 2010
—Amroggang Development Bank
N/A
WMD proliferation
(75 F.R. 38212)
E.O. 13382; E.O. 12938; IEEPA; NEA
July 14, 2010
—Korea Mining [and] Development
—BelTechExport (Belarus)
WMD proliferation
(75 F.R. 40862)
Corporation
—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
—Green Pine Associated Corporation
N/A
Violation of U.N. Security Council
(75 F.R. 53837)
Resolutions 1718 and 1874
—Reconnaissance General Bureau
E.O. 13551; IEEPA; NEA; U.N. Participation Act
—Office 39
August 30, 2010
—Second Academy of Natural Sciences
N/A
WMD proliferation
(75 F.R. 54689)
—Second Economic Committee
E.O. 13382; E.O. 12938; IEEPA; NEA
—Munitions Industry Department
CRS-25

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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.”
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 arms-
related 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-26

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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
[those designated by the U.N.
Sanctions Committee, subject to
UNSCR 1718 and 1874, appear in
Effective Date/Cite
BOLD]
Activity/Statute
July 16, 2009
—Han Yu-ro (director of Korea
Violation of U.N. Security
Ryongaksan General Trading
Council Resolutions 1718 and
Identified only by United
Corporation)
1874
Nations
July 16, 2009
—Hwang Sok-hwa (director of
Violation of U.N. Security
General Bureau of Atomic Energy)
Council Resolutions 1718 and
Identified only by United
1874
Nations
October 2009
—Kim Tong-myong (Tanchon
WMD proliferation
Commercial Bank)
E.O. 13382; E.O. 12938; IEEPA; NEA
August 30, 2010 (Department of
—Ri Hong-sop (former director of
WMD proliferation
Treasury Press Release, TG-840)
Yongbyon Nuclear Research Center)
E.O. 13382; E.O. 12938; IEEPA; NEA
August 30, 2010 (Department of
—Ri Je-son (director of General
WMD proliferation
Treasury Press Release, TG-840)
Bureau of Atomic Energy)
E.O. 13382; E.O. 12938; IEEPA; NEA
August 30, 2010 (Department of
—Yun Ho-jin (director of
WMD proliferation
Treasury Press Release, TG-840)
Namchongang Trading Corporation)
E.O. 13382; E.O. 12938; IEEPA; NEA


Author Contact Information

Dianne E. Rennack

Specialist in Foreign Policy Legislation
drennack@crs.loc.gov, 7-7608


Congressional Research Service
27

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