Understanding North Korea sanctions: U.S. Sanctions Executive Orders
U.N. Security Council sanctions resolutions
U.S. sanctions Executive Orders: Executive orders are the single most important tool for the enforcement of sanctions. Generally —
- Sanctions executive orders are promulgated under the authority of the International Emergency Economic Powers Act, 50 U.S.C. 1705 et seq. Under the IEEPA, Congress gives the President the power to declare a national security emergency, and to block certain property as necessary to address that emergency.
- Violations of the IEEPA are punishable under sec. 206 of that act, by 20 years in prison, a $1 million fine, and a $200,000 civil penalty).
- Sanctions executive orders are enforced by the Treasury Department’s Office of Foreign Assets Control, or OFAC.
- Designation under one of these EOs blocks the property of the person designated. This can apply to any property or interests in property held by a U.S. person or otherwise within U.S. jurisdiction, although generally, it affects dollar-denominated transactions and accounts, which rely on correspondent banking through U.S. financial institutions to transfer funds from a buyer to a seller.
- Persons designated under these executive orders are added to the Treasury Department’s List of Specially Designated Nationals, or SDN List. This index tells you which E.O. was used to designate a target on the SDN List.
- Although the EOs may appear to have broad, sweeping language, only the specific persons designated and added to the SDN List are blocked.
- Banks are required to block SDN-listed persons and implement Know-Your-Customer compliance programs to prevent blocked persons from circumventing sanctions or laundering money. Nearly all governments have KYC laws.
- The Treasury Department’s Financial Crimes Enforcement Network, or FINCEN, works with the banking industry to oversee and enforce anti-money laundering (AML) guidelines and procedures.
- Banks that fail to put sufficient compliance programs into effect may face criminal penalties running into the billions of dollars in egregious cases, civil penalties under other Title 31 provisions, and the complete suspension of their access to the dollar-based financial system under section 311 of the Patriot Act.
The executive orders that apply or could potentially apply to North Korea include —
- 13224 (2001) – for persons designating for engaging in, or providing material support for, terrorism. No North Korean persons are designated under this EO. I have published evidence of the North Korean government’s recent and repeated sponsorship of acts of terrorism.
- 13382 (2005) – for persons involved in or supporting WMD development and proliferation. Roughly 60 North Korean targets are designated under this EO.
- 13466 (2008) – a placeholder, maintaining the block on assets previously blocked, signed by President Bush when he lifted Trading With the Enemy sanctions against North Korea after the 2007 agreed framework
- 13551 (2010) – North Korea-specific sanctions for proliferation, arms dealing, and money laundering.
- 13581 (2011) – Transnational criminal organizations. No North Korean targets are designated under this EO.
- 13570 (2011) – Requiring an OFAC license to import goods or services from North Korea, directly or indirectly.
- 13687 (2015) – Blocking persons designated as officials of the North Korean government or ruling party, or for assisting or supporting them. Potentially broad, but little-used in practice.
- 13694 (2015) – Cyber sanctions. No North Korean persons are designated under this EO.
- 13722 (2016) – North Korea-specific sanctions for persons designated as involved in or facilitating human rights abuses, censorship, arms dealing, WMD proliferation, labor exports, cyberattacks, or certain mineral exports. Bans new investment in North Korea and authorizes sectoral sanctions against North Korea’s mining, energy, transportation, and banking industries. Partially implements the NKSPEA, and expands on it in certain respects.
U.S. sanctions regulations & general licenses