US Sanctions on North Korea

Overview

In addition to the enforcement of UN sanctions, the United States (US) has a wide range of bilateral sanctions on the Democratic People’s Republic of Korea (DPRK) related to DPRK’s form of government and economic system, nuclear weapons and ballistic missile programmes, narcotics trafficking and illicit activities such as money laundering. While many of the US sanctions on the DPRK originated in the contemporary period in response to the DPRK’s increased testing related to its nuclear weapons and ballistic missile programmes, some sanctions date back to the Korean War. The US sanctions on North Korea are also complicated, in some instances, by multiple authorities that prohibit certain activities or requirements for North Korea to engage in reforms in multiple areas for the DPRK to receive sanctions relief.

While different US presidents have issued executive orders (EO) further strengthening sanctions on North Korea for various issues, these EOs and other actions are largely based in a specific set of US legislative acts related to general US authorities or legislation specifically related to North Korea. These include:

• International Emergency Powers Act
• National Emergencies Act
• Iran, North Korea, and Syria Nonproliferation Act of 2000
• North Korea Sanctions and Policy Enhancement Act of 2016
• Korean Interdiction and Modernization of Sanctions Act (title III of the Countering America’s Adversaries Through Sanctions Act; P.L. 115-44)
• Otto Warmbier North Korea Nuclear Sanctions and Enforcement Act of 2019 (division F, title LXXI, Sections 7101-7155, National Defense Authorization Act for FY2020)

 1. Implementation of the UNSC Sanctions Resolutions concerning the DPRK[1] 

The United States implements sanctions from UN Security Council Resolutions (UNSCRs) by drawing on existing US statutory authorities. The president, or designated authorities[2], utilise existing US law to ensure the implementation of sanctions in UNSCRs, which the president often does through an Executive Order (EO) to bring the US into compliance.

There are several US laws that underpin the president’s ability to enforce UNSCRs. These include the United Nations Participation Act of 1945; the National Emergencies Act (NEA); the International Emergency Economic Powers Act (IEEPA); and the North Korea Sanctions and Policy Enhancement Act of 2016 (NKSPEA); All of these acts either work together to provide the basis for presidential actions that allow the US to implement UN sanctions or have added additional authority for the president to utilise.

The United Nations Participation Act of 1945 provides the foundation for the implementation of UN sanctions. Section 5 of the Act provides the president the authority to adopt measures approved under Article 41 of the UN Charter through the agencies and under the rules and regulations that he deems most appropriate.

The NEA establishes the president’s ability to declare a national emergency, which allows the president to declare a national emergency and vests the president with all extraordinary powers delegated by Congress, including those under IEEPA. All national emergencies expire after 1 year unless the president notifies Congress and in the Federal Record publishes their intent to maintain the national emergency.

IEEPA is one of the primary tools that the president uses to implement financial sanctions under UNSCRs. It provides the president the authority to regulate international economic transactions, including to block transactions or freeze assets, in cases where a national emergency has been declared under the NEA. The authority under IEEPA can be removed through the termination of the national emergency authorizing the action or a joint resolution of Congress terminating the national emergency.

The authorities provided in the United National Participation Act and IEEPA are supplemented by authorities provided in the NKSPEA to deal with UN sanctions pertaining to finance, fuel, travel, trade, and other matters. The NKSPEA authorised designations of those trading in UN sanctioned items such as coal, iron, iron ore, seafood, textiles, as well as exceeding UN limits on the export of crude and refined petroleum products.[3] It also requires the designation of individuals that facilitate the use of DPRK labour or vessels.

To implement provisions related to travel bans and non-proliferation, The Immigration and Nationality Act of 1952; the Arms Export Control Act; the North Korea, Syria, Non-proliferation Act; and the Ports and Waterways Safety Act as amended by the Korean Interdiction and Modernization of Sanctions Act[4] (KIMS Act) also provide authority to deal UN sanctions related to travel, non-proliferation, and vessels.

Financial sanctions against North Korea are addressed in EOs 13466, 13551, 13722, and 13810. President George W. Bush issued EO 13466 to fulfil the United States agreement to remove North Korea from the Trading with the Enemy Act (TWEA). It kept in place all blocks on North Korean property from prior to the removal from TWEA and prohibited transactions by US individuals or in the US to evade sanctions.

In response to UNSCRs 1718 and 1874, EO 13551 blocks the assets of DPRK citizens and entities in accordance to those resolutions and any individual found to provide training or other assistance in the trade or manufacture of arms, sanctions evasion, trade in luxury goods, and other activities prohibited by the UN.   

In addition to implanting UN sanctions, in some cases the president has been given the authority to supplement those sanctions under US law. The North Korea Sanctions Policy Enhancement Act, for example, extends the reach of UN sanctions by authorizing the president discretionary authority to designate any individual that assists either financially or materially individuals designated by the UN Security Council [Sec. 104(b)(1)]. Lifting the designations of individuals found to be assisting North Korea requires the president to certify to Congress that they are no longer engaged in UN sanctioned activities.

Notwithstanding any other provision of US law, the president or their designee may remove UN sanctions should the Security Council pass an appropriate resolution.  For example, the United States has designated North Korea as a “jurisdiction of primary money laundering.” This would require North Korea to meet US criteria for the removal of the designation (see section on US financial sanctions).

2. National Sanctions Against the DPRK 

The earliest US sanctions on North Korea date back to the Korean War and President Harry Truman’s issuance of Proclamation 8271. Under the authority granted by the Trading with the Enemy Act (TWEA), Truman declared a national emergency in response to the war. While President George W. Bush removed North Korea from most of the provisions related the TWEA, he did keep in place restrictions on property seized prior to June 16, 2000 and that remained blocked prior to EO 13466.

While President Bush removed the restrictions under TWEA, Congress and subsequent administrations have used legislation and new executive orders to sanction North Korea. The NEA and IEEPA confer wide latitude to the president to enact sanctions on North Korea, Congress has passed legislation to address specific concerns regarding the DPRK. Key legislative acts for the purpose of US sanctions on North Korea include the Iran, North Korea, and Syria Nonproliferation Act of 2000[5] (INKSNA), the NKSPEA, the KIMs Act, and the Otto Warmbier North Korea Nuclear Sanctions and Enforcement Act of 2019[6].

2.2  DPRK Nuclear and Ballistic Missile Programme

The DPRK faces US sanctions for its development of nuclear weapons. When North Korea conducted its first nuclear test in 2006, President George W. Bush issued a Presidential Determination that North Korea was a non-nuclear state and that its test made it subject to US sanctions. These include Section 102(b) (2) of the Arms Export Control Act, as amended (22 USC. 2799aa-1) and section 129 of the Atomic Energy Act of 1954, as amended (42 USC. 2158). The relevant section of the Arms Export Control Act prohibits economic assistance to the DPRK other than humanitarian assistance and food aid, as well as military aid, training or foreign military assistance credits.[7] The Atomic Energy Act prohibits the export of nuclear material or related equipment.

Previous North Korean activity in relations to ballistic missiles were in violation of Section 73 of the Arms Export Control Act and Congress added North Korea to Sections 2 and 3 of the amended Iran, North Korea, and Syria Non-proliferation Act. Both pieces of legislation expand the scope for the United States to sanction individuals or entities found transferring missile technology to North Korea.

The United States also uses Export Administration Regulations (EAR) to limit trade with North Korea for any good subject to an export license. Under the EAR the Commerce Department’s lists the DPRK on its Country Group D list for national security and weapons of mass destruction, as well a Country Group E for reasons of international terrorism. This means that other than for items related to food, medicine, or humanitarian assistance US firms are likely to be denied an export license for North Korea.

Executive Order 13810 also expanded the sanctions on North Korea for its nuclear weapons and ballistic missiles. The EO expanded the criteria under which an individual or entity is subject to being designated under US sanctions to include being engaged in activities such as construction, fishing, or mining, owning or operating ports, or other activities. The EO also extended the exterritorial reach of US financial sanctions and placed prohibitions on any plane or ship that departing North Korea being able to enter US airports and ports for 180 days after departure.

The NKSPEA expands the sanctions on designated individuals. Section 204 requires US agencies not enter contracts with individuals designated related to North Korea’s weapons programmes and that prospective contractors with the US government to certify that they have not engaged in these activities.

Congress has also taken steps to tighten financial sanctions on North Korea. The Otto Warmbier North Korea Nuclear Sanctions and Enforcement Act of 2019 requires the blocking of assets any foreign financial institution that knowingly facilitates significant financial services for anyone designated under North Korea sanctions, while prohibiting US financial institutions from engaging in direct or indirect financial services with a designated individual. It also prohibits US support in international financial institutions for any government that fails to “adequately enforce” UN sanctions on North Korea.

2.3 Non-proliferation

The DPRK’s nuclear weapons and ballistic missile programmes are subject to US sanctions for proliferation. INKSNA provides the authority to sanction individuals involved in the acquisition or transfer of technology restricted under multilateral control lists and that could contribute to the development of weapons of mass destruction or ballistic missiles. INKSNA also provides authority to deny the export of dual use items under the Export Administration Act of 1979 or the Export Administration Regulations[8]. The president has the ability to remove these sanctions.

The DPRK has also violated US non-proliferation laws related to ballistic missiles on multiple occasions under the Arms Export Control Act and the Export Administration Act of 1979.[9] When the sections of the Export Administration Act expired (11A, 11B, and 11C) they were reauthorised in a notice in the Federal Register (84 F.R. 41881). Sanctions for these violations can include a prohibition on US government contracts or export licenses for arms on the US Munitions List to a denial of all import licenses.

The United States has also addressed the DPRK’s proliferation activities through executive orders. EO 17322 blocked the property of the North Korean government and the Workers Party of Korea. It also blocked the property of those who operate in parts of the North Korean economy such as mining or help the regime gain revenue through the sale of goods or services. These actions were taken in response to North Korea’s ballistic missile test of February 2016 and nuclear test of January 2016.

Lifting Sanctions Related to North Korea’s Nuclear Weapons and Ballistic Missile Programmes

Sanctions put in place under the authorities in the Arms Export Control Act; the Iran, North Korea, and Syria Nonproliferation Act of 2000; Export Administration Act; EO 13180; and the Atomic Energy Act can be lifted by the president. The president may waive the prohibition on support for foreign governments in international financial institutions under the Otto Warmbeir Act if there is a lack of capacity to enforce sanctions, steps are being taken to improve enforcement, or in it is in the national security interest.

2.4 Human Rights Violations

2.4a Human Rights Sanctions under the NKSPEA

The NKSPEA lays out specific criteria for sanctioning individuals in the DPRK for human rights violations. Section 104(a)(5) requires the mandatory designation of any individual that assists the North Korean government in serious human rights violations, while Section 304(b)(2) requires the designation of individuals responsible for or that facilitate censorship.

Removal of Human Rights Sanctions under the NKSPEA

Under Section 208 sanctions can be suspended for between 30 days and up to one year if the president determines it is in the national security interest or will further law enforcement. The sanction may be terminated under Section 402 if North Korea makes significant progress on its weapons of mass destruction programs and various human rights issues.  

2.4b Tariff Act of 1930 and NKSPEA

Section 307 of the Tariff Act of 1930 prohibits the importation of goods produced with convict and/or forced labour. The NKSPEA strengthened this prohibition by establishing a presumption that goods produced or mined in the DPRK are the product of forced labour.

Removal of Human Rights Sanctions under Tariff Act of 1930 and NKSPEA

The president can suspend sanctions between 30 days and up to one year if the president determines it is in the national security interest or will further law enforcement. Section 401 of NKSPEA also allows for the president to suspend sanctions for up to one year if there is verifiable evidence that living conditions have improved in political prison camps. These suspensions can be renewed in 180 day increments. The sanction may be terminated under Section 402 if North Korea makes significant progress on its weapons of mass destruction programs and various human rights issues. 

2.4c International Religious Freedom Act of 1998

The International Religious Freedom Act of 1998 was designed to help the United States promote religious freedom in countries that violate or tolerate violations of religious freedom. North Korea has been listed under the act as a “Country of Particular Concern” since 2001. In 2020, the Secretary of State choose the ongoing restrictions under the Trade Act of 1974, which prevents North Korea from receiving most favoured nation trading status. In practice this adds an additional requirement for North Korea to obtain most favoured nation trading status.

Removal of Human Rights Sanctions under the International Religious Freedom Act of 1998

The president can waive or choose to adjust the US sanction.

2.4d Other Human Rights Sanctions

The United States can also sanction North Korea for human rights violations under the Foreign Assistance Act of 1961 and the Victims of Trafficking and Violence Act of 2000. While the United States has not used these tools, sanctions under these laws would be largely redundant as the Victims of Trafficking and Violence Act prohibits non-humanitarian and non-trade related assistance.  The president may waive the sanctions under the Victims of Trafficking and Violence Act if the determine it would advance progress or is in the national interest. The Foreign Assistance Act of 1961 prohibits security assistance to countries that engage in gross human rights violations, though this can be waived if the president certifies that there are extraordinary circumstances requiring the assistance.

2.5 Cybercrimes

After the Sony hack EO 13687 expanded the ability of the United States to block assets and prohibit transactions against North Korean cyber-attacks. With the growing threat of malicious cyber-activities a new executive order providing the president with the ability to deal with these challenges was issued. EO 13694 extended the ability of the president to utilise the authorities under IEEPA to block the US based assets or transactions of those outside the United States. Both of these authorities were codified by Section 210 of the NKSPEA. These sanctions can be removed by certifying to Congress that the DPRK government or the individuals involved are no longer engaged in the proscribed behavior.  

2.6 Terrorism

While President Bush removed North Korea from the list of state sponsors of international terrorism in 2008, the DPRK was re-designated by the Trump administration State Department in 2017. Any state designated by the Secretary of Defense as a state sponsor of international terrorism is subject to restrictions under Section 620A(a) of the Foreign Assistance Act of 1961 and Section 40(f) of the Arms Export Control Act. As a designated state, North Korea faces restrictions on foreign assistance, controls over dual use items, a ban on arms exports, and financial restrictions. For North Korea to be removed from the list of state sponsors of international terrorism, the president must certify to Congress that North Korea has not engaged in acts of international terrorism over the last six months and has made assurances that it will not support such acts in the future. The president may also provide a waiver.    

2.7 Chemical Weapons

In determining that North Korea was responsible for the lethal nerve agent attack on Kim Jong Nam in 2017, the DPRK also became subject to US sanctions against the prohibition of the use of chemical weapons. The Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 requires the United States to terminate non-humanitarian assistance, terminate foreign military sales, licenses, and military sales financing, place restrictions on imports, prohibit bank loans or credit, and a downgrading of diplomatic relations. These sanctions can be removed with credible assurances that the country will not use chemical or biological weapons again, inspections with UN observers, and restitution is make for the attack. The president also has authority to waive these sanctions.

2.8 Sanctions on North Korea’s Political and Economic System

In addition to its development of nuclear weapons and ballistic missiles and other illicit activities, North Korea faces US sanctions due to the nature of its Communist political and economic system. These provisions restrict North Korea’s access to trade, finance, and many non-humanitarian goods, while also prohibiting the United States from supporting funding for North Korea in international financial organisations. They also limit North Korea’s ability to purchase property in the United States to establish a foreign mission.

The Trade Agreement Extension Act of 1951 required the United States to withdraw Normal Trade Relations (previously known as Most Favored Nation trade status) from any country with a Communist government, including North Korea. Additionally, the DPRK is ineligible for preferential trade treatment, investment guarantees, or US government credit under the Trade Act of 1974 due to its status as a nonmarket economy and its failure to allow emigration. The Export-Import Bank Act of 1945 also prohibits access to Bank funding and insurance programs due to North Korea’s Communist government, while the Bretton Woods Agreement Act prohibits the United States from supporting finance for the DPRK in international financial organisations.

The DPRK’s status as a Communist state makes it ineligible for most non-humanitarian assistance under the Foreign Assistance Act of 1961. The Foreign Assistance Act also places limits on US funding for international organisations that could spend funds on the DPRK.

The Arms Control Export Act also has restricted arms exports to nonmarket economies that have engaged in proliferation due to the lack of separation between the state and firms.

While not directly related to the DPRK’s political or economic system, EO 13570 prohibited the direct and indirect importation of goods and services from North Korea.

Lastly, Communist countries as defined under the Foreign Assistance Act of 1961 are prohibited from purchasing property for missions in the United States under Section 206 of State Department Basic Authorities Act of 1956.[10]

Removal of sanctions related to North Korea’s political and economic status

Most sanctions related to North Korea’s political and economic status can be waived by either the president, secretary of the treasury, or secretary of state except for the limits on funds for international organisations that may spend on the DPRK.

2.9 US Financial System

The United States also has sanctions directly targeting North Korea’s access to the US financial system. The NKSPEA required the Treasury Department to determine by August 2016 whether were reasonable reasons to consider North Korea a justification of primary money laundering concern. In response, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a new rule prohibiting US banks from providing correspondents for North Korean financial institutions and processing transactions of correspondent accounts at foreign banks that involve financial institution from the DPRK.

Subsequent to designating North Korea a jurisdiction of primary money laundering concern, EO 13810 also authorised the Secretary of the Treasury to block funds that are either determined to come from North Korea or transferred to it through the US financial system. Prior to that designation, EO 13551 also took steps to limit North Korea’s access to the US financial system by authorising property to be blocked by for individuals that engage in money laundering, counterfeiting, and other illicit activities.

2.10 Sanctions Removal

As noted in the previous sections, the president or specifically designated members of the executive branch can waive sanctions under many US laws. However, sanctions removal can be more complicated.

In many cases, there are multiple sources for a sanction on North Korea. The Trade Agreement Extension Act suspended North Korea’s MFN rights due to the Communist nature of its government, while Tariff Act of 1974 prohibits preferential trade arrangements due to North Korea’s nonmarket economy and prohibitions on emigration. If EO 13570, which prohibits most trade with North Korea, were suspended imports from the DPRK would face the highest level of US tariffs in the absence of political and economic reforms. North Korea’s lack of religious freedom is also a barrier to receiving PNTR. Removing these barriers in the absence of those reforms would require Congress to grant permanent normal trade relations through an act of Congress.

Similar challenges can be seen in the NKSPEA which requires progress in multiple areas for the removal of sanctions covered under the legislation.

As a result, the ability to remove US sanctions should be considered in a broader context. This includes which sanctions can be waived or suspended through executive authority; where multiple or concurrent authorities might leave certain restrictions in place even if one sanction is suspended or removed; what steps are legally required for the president to certify that the DPRK is eligible for their permeant removal; and where new Congressional legislation may be required.

3. List of Relevant US Laws and Regulations 

3.1 US Legislation, Public Law, Declarations, or Code

3 US Code § 301: https://www.govinfo.gov/app/details/USCODE-2011-title3/USCODE-2011-title3-chap4-sec301

Atomic Energy Act: https://www.govinfo.gov/content/pkg/COMPS-1630/pdf/COMPS-1630.pdf

Bretton Woods Agreement Act: https://www.govinfo.gov/content/pkg/COMPS-10334/pdf/COMPS-10334.pdf

Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (USC. 5601 et seq.):  https://uscode.house.gov/view.xhtml?path=/prelim@title22/chapter65&edition=prelim

Democratic People's Republic of Korea (DPRK) Designation as a State Sponsor of Terrorism: https://www.federalregister.gov/documents/2017/11/27/2017-25547/democratic-peoples-republic-of-korea-dprk-designation-as-a-state-sponsor-of-terrorism-sst

Export Administration Act of 1979: https://www.govinfo.gov/content/pkg/STATUTE-93/pdf/STATUTE-93-Pg503.pdf#page=1.

FinCEN Imposition of Special Measure Against North Korea as a Jurisdiction of Primary Money Laundering Concern: https://www.federalregister.gov/documents/2016/11/09/2016-27049/imposition-of-special-measure-against-north-korea-as-a-jurisdiction-of-primary-money-laundering (this authority is based in the USA PATRIOT Act: https://www.govinfo.gov/content/pkg/PLAW-107publ56/pdf/PLAW-107publ56.pdf).

Foreign Assistance Act of 1961 (P.L. 87-195):  https://www.foreign.senate.gov/imo/media/doc/Foreign%20Assistance%20Act%20Of%201961.pdf

Iran, North Korea, and Syria Non-proliferation Act: https://www.govinfo.gov/content/pkg/PLAW-109publ353/pdf/PLAW-109publ353.pdf Iran Nonproliferation Act of 2000: https://www.govinfo.gov/content/pkg/PLAW-106publ178/html/PLAW-106publ178.htm

Immigration and Nationality Act of 1952: https://www.govinfo.gov/content/pkg/STATUTE-66/pdf/STATUTE-66-Pg163.pdf t

International Economic Emergency Powers Act[11]: https://home.treasury.gov/system/files/126/ieepa.pdf

International Religious Freedom Act of 1998: https://www.congress.gov/bill/105th-congress/house-bill/2431/text

National Defense Authorization Act FY2020 (P.L. 116-92): https://www.congress.gov/116/plaws/publ92/PLAW-116publ92.pdf

National Emergencies Act: https://www.govinfo.gov/content/pkg/HMAN-112/pdf/HMAN-112-pg1119.pdf

North Korea Sanctions Policy Enhancement Act:  https://www.congress.gov/bill/114th-congress/house-bill/757/text?r=19&s=1

P.L. 117-103: https://www.congress.gov/117/plaws/publ103/PLAW-117publ103.pdf

State Department Basic Authorities Act of 1956: https://www.govinfo.gov/content/pkg/COMPS-1088/pdf/COMPS-1088.pdf

Tariff Act of 1930: https://www.govinfo.gov/content/pkg/USCODE-2020-title19/pdf/USCODE-2020-title19-chap4.pdf

Trade Act of 1974: https://www.govinfo.gov/content/pkg/STATUTE-88/pdf/STATUTE-88-Pg1978-2.pdf

Trade Agreement Extension Act of 1951: https://history.state.gov/historicaldocuments/frus1951v01/comp12subch3#:~:text=The%20period%20during%20which%20the,Sec.

United Nations Participation Act of 1945: https://www.govinfo.gov/content/pkg/COMPS-1090/pdf/COMPS-1090.pdf

United States Innovation and Competition Act of 2021 (not yet passed): https://www.congress.gov/bill/117th-congress/senate-bill/1260?q=%7B%22search%22%3A%5B%22s.1260%22%2C%22s.1260%22%5D%7D&s=3&r=1

Victims of Trafficking and Violence Act of 2000: https://www.govinfo.gov/content/pkg/PLAW-106publ386/pdf/PLAW-106publ386.pdf. 

3.2 Executive Orders and Other Presidential Actions

EO 12938 (Strengthens Export Restrictions and Sanctions Related to WMD): https://www.archives.gov/files/federal-register/executive-orders/pdf/12938.pdf

E0 13810 (Prohibition of Entry into US Ports and Airports): https://home.treasury.gov/system/files/126/13810.pdf

EO 13466 (Removal from TWEA and Maintenance of Certain Sanctions): https://home.treasury.gov/system/files/126/nkeo.pdf

EO 13551 (Addresses money laundering and other illicit behaviors): https://irp.fas.org/offdocs/eo/eo-13551.pdf

EO 13570 (Prohibiting Transactions with North Korea): https://home.treasury.gov/system/files/126/04182011_nk_eo.pdf

EO 13687 (Response to North Korean cyber activity): https://www.govinfo.gov/content/pkg/DCPD-201500002/pdf/DCPD-201500002.pdf

EO 13694 (Expansion of authorities related to malicious cyber activity): https://www.federalregister.gov/documents/2015/04/02/2015-07788/blocking-the-property-of-certain-persons-engaging-in-significant-malicious-cyber-enabled-activities

EO 13722: https://home.treasury.gov/system/files/126/nk_eo_20160316.pdf

EO 13810 (Further limits DPRK access to US financial system): https://home.treasury.gov/system/files/126/13810.pdf

84 F.R. 41881 (Continuing Export Administration Act restrictions): https://www.federalregister.gov/documents/2019/08/15/2019-17735/continuation-of-the-national-emergency-with-respect-to-export-control-regulations

Presidential Determination on Sanctions Against North Korea for Detonation of a Nuclear Explosive Device: https://www.federalregister.gov/documents/2007/01/16/07-133/presidential-determination-on-sanctions-against-north-korea-for-detonation-of-a-nuclear-explosive