Significant new sanctions in response to weapons tests

September 2017

In light of recent ballistic missile and nuclear weapons tests by the Democratic People’s Republic of Korea (“DPRK”), the US and the UN have recently  imposed significant new sanctions against DPRK.

 
UN Security Council Resolution 2371 of 5th August 2017

On 5th August 2017 the UN Security Council (“UNSC”) passed Resolution 2371, which imposed the following sanctions:

  • DPRK shall not supply, sell or transfer coal, iron and iron ore. All Member States shall prohibit the procurement of such material from the DPRK by their nationals, or using their flag vessels or aircraft, and whether or not originating in the territory of the DPRK.
  • DPRK shall not supply, sell or transfer seafood. All Member States shall prohibit the procurement of such items from the DPRK by their nationals, or using their flag vessels or aircraft, whether or not originating in the territory of the DPRK.
  • DPRK shall not supply, sell or transfer lead and lead ore. All Member States shall prohibit the procurement of such items from the DPRK by their nationals, or using their flag vessels or aircraft, whether or not originating in the territory of the DPRK.
  • Member States shall prohibit, by their nationals or in their territories, the opening of new joint ventures or cooperative entities with DPRK entities or individuals.
  • Authorizes the UNSC to designate vessels related to activities prohibited by relevant resolutions, and prohibits port calls by designated vessels and chartering of DPRK flagged vessels.

In addition the Resolution imposes asset freezes against various entities and individuals.

  
UN Security Council Resolution 2375 of 11th September 2017

On 11th September 2017 the UNSC passed Resolution 2375, which imposed the following sanctions:

  • A ban on the supply, sale or transfer of all condensates and natural gas liquids to the DPRK.
  • A limit on the supply, sale or transfer to DPRK for all refined petroleum products - 500,000 barrels during an initial period of three months (1st October 2017 to 31st December 2017), and 2 million barrels per year during a period of 12 months beginning on 1st January 2018 and annually thereafter.
  • Restricts the supply, sale or transfer of crude oil to the DPRK in any period of 12 months after the adoption of the Resolution to a maximum of the amount the Member State supplied in the period of 12 months prior to the adoption of the Resolution;
  • A ban on the export by the DPRK of textiles (including fabrics and partially or fully completed apparel products);
  • A ban on Member States from providing work authorizations for DPRK nationals, other than those for which written contracts have been finalized prior to the adoption of the Resolution;
  • A ban on all joint ventures or cooperative entities or expanding existing joint ventures with DPRK entities or individuals;
  • Directs the UNSC to designate vessels transporting prohibited items from the DPRK;
  • Calls on Member States to inspect vessels with the consent of the flag State, if there are reasonable grounds to believe that the vessels are carrying cargo prohibited under relevant UN Resolution(s);

In addition the Resolution imposes asset freezes against various entities and individuals.

 
EU Designations

On 15th September 2017 the EU designated one individual and 3 entities in connection with DPRK:

  • Pak Yon Sik
  • Central Military Commission of the Worker's Party of Korea (CMC)
  • Organization and Guidance Department (OGD)
  • Propaganda and Agitation Department (PAD)

 
US Executive Order 13810 of 20th September 2017

On 20 September 2017 US President Trump issued Executive Order 13810, which stated that:

  • All property and interests in property in the US, or within the possession or control of any US person are blocked, as determined by the Secretary of the Treasury, in consultation with the Secretary of State:
    (i) to operate in the construction, energy, financial services, fishing, information technology, manufacturing, medical, mining, textiles, or transportation industries in North Korea;
    (ii) to own, control, or operate any port in North Korea, including any seaport, airport, or land port of entry;
    (iii) to have engaged in at least one significant importation from or exportation to North Korea of any goods, services, or technology;
    (iv) to be a North Korean person, including a North Korean person that has engaged in commercial activity that generates revenue for the Government of North Korea or the Workers’ Party of Korea;
    (v) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to this order; or
    (vi) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order.
  • No aircraft in which a foreign person has an interest that has landed at a place in North Korea may land at a place in the United States within 180 days after departure from North Korea.
  • No vessel in which a foreign person has an interest that has called at a port in North Korea within the previous 180 days, and no vessel in which a foreign person has an interest that has engaged in a ship to-ship transfer with such a vessel within the previous 180 days, may call at a port in the US.
  • All funds in the US, or that are in the possession or control of any US person, that originate from, are destined for, or pass through a foreign bank account that is owned or controlled by a North Korean person, or have been used to transfer funds in which any North Korean person has an interest, are blocked. No US person, wherever located, may approve, finance, facilitate, or guarantee any such transaction by a foreign person.
  • The imposition of sanctions is authorised on a foreign financial institution that: 
    (i) knowingly conducted or facilitated any significant transaction on behalf of any person whose property and interests in property are blocked pursuant to Executive Orders 13551, 13687, 13722 or this order, or of any person whose property and interests in property are blocked pursuant to Executive Order 13382 in connection with North Korea-related activities; or 
    (ii) knowingly conducted or facilitated any significant transaction in connection with trade with North Korea.

 
US Designations on 26th September 2017

Also as a result of North Korea’s recent weapons tests, OFAC has designated for asset freeze 9 North Korean banks and 26 linked individuals in various places including China, UAE, Libya and Russia. The designations are intended to further limit North Korea’s access to the international financial system.

http://unscr.com/en/resolutions/doc/2371
http://unscr.com/en/resolutions/doc/2375
http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1506423698988&uri=CELEX:32017R1568
https://www.treasury.gov/resource-center/sanctions/Programs/Documents/13810.pdf
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20170926_33.aspx