North Korea


The US Departments of State, Treasury, and Homeland Security warned companies in a new advisory entitled, Risks for Businesses with Supply Chain Links to North Korea, that deceptive practices by North Korea to evade US, UN, and other sanctions could put them at risk of prohibited or sanctionable dealings with the North Korean regime.  The advisory published on July 24, 2018 follows February 2018 guidance from the US Treasury Department’s Office of Foreign Assets Control regarding certain deceptive shipping practices of North Korea to avoid US sanctions (see our prior blog post here).  The new advisory encourages companies to undertake enhanced due diligence within their supply chains to avoid prohibited or sanctionable: (i) sourcing of goods, services, or technology from North Korea and (ii) use of the labor of North Korean citizens or nationals, which is presumed to be forced labor, regardless of where such labor occurs.

On May 10, 2018, the Department of State published in the Federal Register a notice [Public Notice: 10407] that a determination has been made that a number of foreign persons have engaged in activities that warrant the imposition of measures pursuant to Section 3 of the Iran, North Korea, and Syria Nonproliferation Act (the “Act”; Pub. L. 109–353).

On 26 April 2018, the Official Journal published Commission Implementing Regulation (EU) 2018/640 of 25 April 2018 introducing prior Union surveillance of imports of certain aluminium products originating in certain third countries. The Regulation seeks to address the problem of significant oversupply of aluminium from the PRC and section 232 action by the United States. These activities may lead to substantial trade diversion and price depression on the Union market.

The US Government is considering adding digital currency addresses affiliated with individuals and entities identified to the List of Specially Designated Nationals and Blocked Persons (“SDN List”). This would put US persons on notice that doing business with those digital addresses may be prohibited, increasing compliance considerations for businesses delving into the world of virtual currency.

On March 5, 2018, the Department of State published in the Federal Register a determination [Public Notice: 10340], pursuant to Sections 306(a), 307(a), and 307(d) of the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, as amended (22 U.S.C. 5604(a) and Sec 5605(a)), that the Government of North Korea has used chemical weapons in violation of international law or lethal chemical weapons against its own nationals. The following is notice of sanctions to be imposed as required by law.

On March 1, 2018, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) announced the amendment and reissuance in their entirety of the North Korea Sanctions Regulations, 31 C.F.R. Part 510 (“NKSR”). The Final Rule can be found here. These changes to the NKSR took effect on March 5, 2018 upon publication in the Federal Register. OFAC also published 13 new FAQs, which can be found here.

As part of its continuing efforts to isolate North Korea from the world economy, on February 23, 2018, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) announced new sanctions measures targeting North Korea’s shipping industry and issued an advisory document entitled “North Korea Sanctions Advisory,” which highlights sanctions risks in the global shipping industry.