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US Government Announces New Economic Sanctions Against North Korea
Practical Law Legal Update w-001-7571 (Approx. 5 pages)
US Government Announces New Economic Sanctions Against North Korea
by Practical Law Commercial Transactions
| Law stated as of 23 Mar 2016 • USA (National/Federal) |
President Obama has issued an Executive Order implementing stricter economic sanctions against North Korea. These sanctions further limit trade and travel to and from North Korea, with a particular emphasis on limiting economic benefits to the North Korean Government or the Workers’ Party of Korea. Additionally, the US Department of Treasury’s Office of Foreign Asset Control (OFAC) has updated its general license exceptions and Specially Designated Nationals List regarding North Korea.
On March 15, 2016, President Obama issued Executive Order 13711, which tightened economic sanctions on trade with North Korea. The order implements provisions of the:
- North Korea Sanctions and Policy Enhancement Act of 2016 (Public Law 114-122).
- United Nations Security Council Resolution (UNSCR) 2270 of March 2, 2016.
The order, which implements sanctions previously adopted by the United Nations and US Congress, blocks transfers, payments, imports/exports, withdrawals, and other dealings between the US and North Korea, particularly activity that benefits the Government of North Korea or the Workers’ Party of Korea.
Blocked Activity Within or Benefitting North Korea
The order blocks people in the US, or who own or control US property or interests, from dealing with the Government of North Korea or the Workers’ Party of Korea, including:
- Operating in the below-listed industries, (see Determination Pursuant to Subsection 2(a)(i) of E.O. 013711):
- transportation;
- mining;
- energy; and
- financial services.
- Selling, supplying, transferring, or purchasing metal, graphite, coal, or software from North Korea or in a way that would benefit North Korea.
- Engaging in or facilitating human rights abuses by North Korea.
- Exporting workers from North Korea.
- Undermining cybersecurity efforts on behalf of North Korea.
- Engaging in or facilitating censorship by North Korea.
Owning, controlling, or acting on behalf of individuals in violation of the rules is prohibited, as are attempted, but unsuccessful, violations.
Blocked Trade Into North Korea
The order further blocks people under US jurisdiction, including those operating outside the US, from:
- Exporting goods, services, or technology to North Korea.
- Making new investments in North Korea.
- Approving, financing, facilitating, or guaranteeing foreign transactions that would violate this order if committed by a US person.
Immigration and Travel Restrictions
The Executive Order also suspends entry into the US of nonimmigrants and immigrants who violate the rules in the order regarding blocked activity within or benefitting North Korea.
OFAC General Licenses Authorizing Certain Activities
On March 16, 2016, OFAC issued nine general licenses to authorize activities that are otherwise prohibited by the new North Korea sanctions. These licenses authorize:
- The North Korean mission to the United Nations (General License No. 1).
- Provision of certain legal services (General License No. 2).
- Entries into certain accounts for normal service charges (General License No. 3).
- Noncommercial, personal remittances (General License No. 4).
- Services in support of nongovernmental organizations’ activities (General License No. 5).
- Third-country diplomatic and consular funds transfers (General License No. 6).
- Transactions related to telecommunications and mail (General License No. 7).
- Transactions related to patents, trademarks, and copyrights (General License No. 8).
- Emergency medical services (General License No. 9).
Additions to OFAC’s List of Specially Designated Nationals
OFAC also updated its list of Specially Designated Nationals for North Korea as a result of the enhanced sanctions. The complete list of individuals, entities, and vessels added to the list can be found on the Treasury Department website.
For more general information on US sanctions, see Practice Note, Export Regulation: OFAC Economic and Trade Sanctions.