North Korea Sanctions
North Korea Sanctions
456. What does Executive Order (E.O.) 13722 do?
E.O. 13722 blocks the Government of North Korea and the Workers’ Party of Korea; prohibits the exportation and reexportation of goods, services (including financial services), and technology to North Korea; and prohibits new investment in North Korea. E.O. 13722 also adds new designation criteria, some of which are mandatory criteria from the North Korea Sanctions and Policy Enhancement Act of 2016.
457. Does Executive Order (E.O.) 13722 take into account United Nations Security Council Resolution (UNSCR) 2270 and domestic legislation?
Yes. E.O. 13722 implements certain U.S. obligations under UNSCR 2270 and certain provisions of the North Korea Sanctions and Policy Enhancement Act of 2016. U.S. sanctions against North Korea are generally broader than UN sanctions.
458. Does the blocking of the Government of North Korea and the Workers’ Party of Korea impact the ability of U.S. persons to do business with or conduct transactions with entities in which either party has an interest?
Yes. All property and interests in property of the Government of North Korea and the Workers’ Party of Korea are blocked. U.S. persons are generally prohibited from engaging in transactions with them without authorization from OFAC and must block property or interests in property that are in, or come within, the United States or the possession of a U.S. person.
459. What impact does the prohibition on the exportation or reexportation of goods, services, or technology under Executive Order (E.O.) 13722 have on the regulations of the Department of Commerce’s Bureau of Industry and Security (BIS)?
None. E.O. 13722 prohibits the exportation or reexportation, from the United States, or by a United States person, of any goods, services, or technology to North Korea. BIS maintains authority to license exports and reexports of goods and technology subject to the Export Administration Regulations to persons who are not Specially Designated National (SDNs) and involving the Government of North Korea and the Workers’ Party of Korea. In most instances, to export to designated individuals and entities, U.S. persons must obtain a license from both OFAC and BIS. Regulated financial entities processing a transaction in accordance with an OFAC or a BIS license are encouraged to request a copy of the license to ensure the transaction meets the terms, conditions, and criteria of the license.
460. Can U.S. persons do business with entities in North Korea?
No. Unless authorized pursuant to a general or specific license from OFAC and/or BIS, Executive Order (E.O.) 13722 prohibits new investment in North Korea by a U.S. person and the exportation or reexportation, from the United States, or by a U.S. person, of any goods, services, or technology to North Korea. E.O. 13810 (“Imposing Additional Sanctions with Respect to North Korea”) does not modify any of those prohibitions.
461. Has OFAC issued general licenses for the North Korea program?
Yes. Several general licenses are incorporated into Subpart E of the North Korea Sanctions Regulations. See OFAC’s webpage on North Korea for any additional general licenses.
462. Can U.S. persons continue to send money to family or friends in North Korea?
Yes. Section 510.511 of the North Korea Sanctions Regulations authorizes U.S. depository institutions (including banks), U.S.-registered brokers or dealers in securities, and U.S.-registered money transmitters to process non-commercial, personal remittances to or from North Korea, or for or on behalf of an individual ordinarily resident in North Korea, up to a maximum of $5,000 per year. Such transactions do not require further authorization from OFAC. This general license does not authorize any transactions by, to, or through a financial institution blocked pursuant to the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 C.F.R. part 544, or the Global Terrorism Sanctions Regulations, 31 C.F.R. part 594, or any person whose property and interests in property are blocked pursuant to any part of 31 C.F.R. chapter V other than part 510.
463. Can nongovernmental organizations (NGOs) provide assistance to North Korea? If so, what types of assistance can NGOs provide? Can NGOs conduct transactions with the Government of North Korea?
Yes. Section 510.512(a) of the North Korea Sanctions Regulations authorizes NGOs to export or reexport services to North Korea that would otherwise be prohibited in support of the following activities: (1) activities to support humanitarian projects to meet basic human needs in North Korea, including drought, flood, and disaster relief; the distribution of food, medicine, and clothing intended to be used to relieve human suffering; the provision of shelter; the provision of clean water, sanitation, and hygiene assistance; the provision of health-related services; assistance for individuals with disabilities; and environmental programs; (2) activities to support democracy building in North Korea, including rule of law, citizen participation, government accountability, universal human rights and fundamental freedoms, access to information, and civil society development projects; (3) activities to support non-commercial development projects directly benefiting the North Korean people, including preventing infectious disease and promoting maternal/child health, sustainable agriculture, and clean water assistance; and (4) activities to support environmental protection, including the preservation and protection of threatened or endangered species and the remediation of pollution or other environmental damage. Additionally, section 510.512(c) authorizes U.S. depository institutions, U.S.-registered brokers or dealers in securities, and U.S.-registered money transmitters to process transfers of funds on behalf of U.S. or third-country NGOs, including to or from North Korea, in support of the activities identified above.
In most instances, to export or reexport goods, services, or technology to designated individuals and entities, U.S. persons must obtain a license from both OFAC and the Bureau of Industry and Security of the Department of Commerce (BIS). A license from BIS is required to export or reexport any item subject to the Export Administration Regulations (15 CFR parts 730 through 744) (EAR) to North Korea, except food and medicine classified as EAR99. Section 510.512(b) authorizes NGOs to export or reexport from a third country to North Korea food and medicine in support of the activities listed above, provided that the food and medicine are not subject to the EAR. The exportation or reexportation by a U.S. person to North Korea from a third country of items that are not subject to the EAR and that are not food or medicine requires a specific license from OFAC.
Section 510.512(d) authorizes NGOs to conduct limited transactions with the Government of North Korea that are necessary for the above-described activities, such as payment of reasonable and customary taxes and other fees. Partnerships and partnership agreements between NGOs and the Government of North Korea or other blocked persons that are necessary for NGOs to provide authorized services are not permitted without a specific license from OFAC.
*For guidance on specific questions with respect to charitable donations or NGOs, and the scope of section 510.512, please contact OFAC.
464. Can I travel to North Korea?
While OFAC sanctions do not prohibit U.S. persons from traveling to or from North Korea, as of September 1, 2017, U.S. passports are invalid for travel into, in, or through North Korea. However, in limited circumstances, applicants may be eligible for a Special Validation Passport from the State Department that will allow them to travel for specific purposes. See travel.state.gov for additional details. U.S. persons who intend to travel to North Korea via a Special Validation Passport do not require OFAC authorization to engage in activities that are exempt pursuant to 50 U.S.C. § 1702(b), such as travel to or from any country or the importation or exportation of informational materials. All other activities outside the scope of this exemption would require a specific license from OFAC, unless otherwise authorized by OFAC. See, for example, FAQ 558 for additional information regarding news reporting organizations and journalists.
465. What is an example of a person who forms part of the household of an employee of the official mission of the Government of North Korea or of an employee of the United Nations?
Section 510.510 of the North Korea Sanctions Regulations authorizes the provision of goods or services in the United States to employees of the official mission of the Government of North Korea to the United Nations or employees of the United Nations, their families, or other persons forming part of their household. Persons forming part of their household could include spouses, domestic partners, and dependent children.
525. What sanctions authority does Executive Order (E.O.) 13810 provide?
E.O. 13810 provides the Secretary of the Treasury, in consultation with the Secretary of State, additional tools to disrupt North Korea’s ability to fund its weapons of mass destruction (WMD) and ballistic missile programs. Specifically, E.O. 13810: (1) establishes several new designation criteria; (2) prohibits vessels and aircraft that have called or landed at a port or place in North Korea in the previous 180 days, and vessels that engaged in a ship-to-ship transfer with such a vessel in the previous 180 days, from entering the United States; (3) provides authority to block any funds transiting accounts linked to North Korea that come within the United States or possession of a United States person; and (4) provides authority to impose sanctions on a foreign financial institution that knowingly conducted or facilitated on or after the date of the order (i) any significant transaction on behalf of certain blocked persons or (ii) any significant transaction in connection with trade with North Korea. The sanctions applicable to foreign financial institutions can be restrictions on correspondent or payable-through accounts or full blocking sanctions.
The prohibitions in E.O. 13810 are implemented in the North Korea Sanctions Regulations, 31 C.F.R. part 510. See particularly §§ 510.201(a) and (d), 510.208, and 510.210. Section 510.518 allows vessels in distress to call at a U.S. port and aircraft to make a nontraffic stop or an emergency landing in the United States. A nontraffic stop includes a stop for any purpose other than taking on or discharging cargo, passengers, or mail.
526. How does the Secretary of the Treasury make a determination about funds blocked from certain foreign bank accounts pursuant to section 3 of Executive Order (E.O) 13810 and implemented in 31 C.F.R. § 510.201(d)? How are U.S. persons expected to know which funds are blocked?
Section 3 of E.O. 13810, as implemented in 31 C.F.R. § 510.201(d), authorizes the Secretary of the Treasury to determine that a foreign bank account is owned or controlled by a North Korean person or has been used to transfer funds in which any North Korean person has an interest, and to require the blocking of funds that originate from, are destined for, or pass through that account. OFAC will either publish notice in the Federal Register or provide notice directly to affected parties. Absent such a determination or notice from Treasury, this provision does not create any immediate compliance obligations on U.S. persons.
555. What activities by foreign financial institutions can subject them to sanctions under the revised North Korea Sanctions Regulations (NKSR) incorporating the provisions of Executive Order (E.O.) 13810?
Foreign financial institutions have for some time been prohibited from engaging in most North Korea-related transactions that transit the U.S. financial system. In addition, as described in § 510.201(a)(3)(vi) of the NKSR, sanctionable activities of a foreign financial institution include, on or after September 21, 2017, knowingly conducting or facilitating any significant transaction:
- On behalf of any person whose property and interests in property are blocked pursuant to E.O. 13551, E.O. 13687, E.O. 13722, or E.O. 13810, or of any person whose property and interests in property are blocked pursuant to E.O. 13382 in connection with North Korea-related activities; or
- In connection with trade with North Korea.
556. When are the prohibitions and strict conditions on foreign financial institutions’ correspondent accounts or payable-through accounts in the United States pursuant to Executive Order (E.O.) 13810 effective?
Pursuant to E.O. 13810 and the North Korea Sanctions Regulations, a finding by the Treasury Department that a foreign financial institution knowingly engages in one or more of the sanctionable activities is necessary before the Treasury Department can prohibit or impose strict conditions on the opening or maintaining in the United States of correspondent accounts or payable-through accounts for that foreign financial institution. Such a finding also allows the Treasury Department the option of blocking the foreign financial institution. This authority is in addition to that granted Treasury’s Financial Crimes Enforcement Network (FinCEN) under section 311 of the USA PATRIOT Act.
557. How will U.S. and foreign financial institutions (FFIs) know that the Treasury Department has imposed prohibitions or strict conditions on FFIs’ correspondent accounts or payable-through accounts in the United States pursuant to § 510.210 of the North Korea Sanctions Regulations (NKSR)?
If, pursuant to the NKSR, Treasury decides to impose strict conditions on maintaining U.S. correspondent accounts or U.S. payable-through accounts for an FFI, or decides to prohibit the opening or maintaining of U.S. correspondent accounts or U.S. payable-through accounts for an FFI, Treasury will add the name of the FFI, together with the actual strict condition or conditions to be imposed, to the Correspondent Account or Payable-Through Account Sanctions (CAPTA) List on OFAC’s website (www.ofac.treasury.gov), and published in the Federal Register. (The CAPTA list will be included in the Consolidated Sanctions List Data Files, and will be available for download in all Consolidated Sanctions List data file formats.)
If the Treasury Department decides instead to block the property and interests in property of the FFI, the institution’s name will be placed on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List).
558. Are news reporting organizations and journalists authorized to conduct activities in North Korea?
News reporting organizations do not require OFAC authorization to engage in activities that are exempt pursuant to 50 U.S.C. § 1702(b), such as travel to or from any country or the importation or exportation of informational materials. All other activities would require a specific license from OFAC. For example, it is prohibited for journalists to employ North Korean government guides or purchase North Korean-origin technology without a specific license. The exemptions contained in IEEPA, 50 U.S.C. § 1702(b), do not apply to transactions involving persons blocked by the United Nations pursuant to United Nations Security Council Resolutions. As of September 1, 2017, U.S. passports are invalid for travel into, in, or through North Korea. However, in limited circumstances, applicants may be eligible for a Special Validation Passport from the State Department that will allow them to travel for specific purposes. See travel.state.gov for for additional details.