On Thursday, President Trump issued a wide-ranging Executive Order expanding the sanctions on North Korea. First, it expands the castegories of persons whom Treasury can designate for asset freezes to include:
(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.
Section 2 imposes a 180-day ban from accessing ports in the US for any vessel or airplane that visits a DPRK port.
Section 3 freezes all funds in which DPRK persons have an interest, as well as prohibiting any facilitation or other services in this regard.
Section 4 is the big one – it sets up secondary sanctions on foreign financial institutions who:
(i) knowingly conducted or facilitated any significant transaction on behalf of any person whose property and interests in property are blocked pursuant to Executive Order 13551 of August 30, 2010, Executive Order 13687 of January 2, 2015, Executive Order 13722 of March 15, 2016, 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.
And here are the sanctions which can be imposed:
(1) prohibit the opening and prohibit or impose strict conditions on the maintenance of correspondent accounts or payable-through accounts in the United States; or
(ii) block all property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of such foreign financial institution, and provide that such property and interests in property may not be transferred, paid, exported, withdrawn, or otherwise dealt in.
There also are new and updated FAQs, a new General License which authorizes the following exception to the aircraft and vessel restrictions:
(I) The vessel is in distress and seeks refuge in the United States;
(2) The vessel’s call at a pmi in North Korea was due solely to its distress and the
resulting need to seek refuge;
(3) The aircraft is engaging in a nontraffic stop or an emergency landing in the United States; or
Note to paragraph (a)(3): A nontraffic stop is a stop for any purpose other than taking on or discharging cargo, passengers, or mail.
(4) The aircraft’s landing in North Korea was due solely to an emergency.
General License 3-A was also amended so that accounts frozen under the new Executive Order could still have certain fees deducted.
Mr. Watchlist will make a separate post of the new and updated FAQs.