US Codex
Bill
Notes

Title II — Sanctions Against North Korean Proliferation, Human Rights Abuses, and Illicit Activities

S. 3012 · 113th Congress · Dec 12, 2014 · Lineage

II Sanctions Against North Korean Proliferation, Human Rights Abuses, and Illicit Activities

201. Determinations with respect to North Korea as a jurisdiction of primary money laundering concern

(a)
Findings— Congress makes the following findings:
(1)
The Under Secretary for Terrorism and Financial Intelligence, who is responsible for safeguarding the financial system against illicit use, money laundering, terrorist financing, and the proliferation of weapons of mass destruction, and has repeatedly expressed concern about North Korea’s misuse of the international financial system—
(A)
in 2006—
(i)
stated, “Given [North Korea’s] counterfeiting of U.S. currency, narcotics trafficking and use of accounts world-wide to conduct proliferation-related transactions, the line between illicit and licit North Korean money is nearly invisible.”; and
(ii)
urged financial institutions worldwide to “think carefully about the risks of doing any North Korea-related business”;
(B)
in 2011, stated that North Korea—
(i)
“remains intent on engaging in proliferation, selling arms as well as bringing in material”; and
(ii)
was “aggressively pursuing the effort to establish front companies.”; and
(C)
in 2013, stated—
(i)
in reference to North Korea’s distribution of high-quality counterfeit United States currency, that “North Korea is continuing to try to pass a supernote into the international financial system”; and
(ii)
the Department of the Treasury would soon introduce new currency with improved security features to protect against counterfeiting by the Government of North Korea.
(2)
The Financial Action Task Force, an intergovernmental body whose purpose is to develop and promote national and international policies to combat money laundering and terrorist financing, has repeatedly—
(A)
expressed concern at deficiencies in North Korea’s regimes to combat money laundering and terrorist financing;
(B)
urged North Korea to adopt a plan of action to address significant deficiencies in these regimes and the serious threat they pose to the integrity of the international financial system;
(C)
urged all jurisdictions to apply countermeasures to protect the international financial system from ongoing and substantial money laundering and terrorist financing risks emanating from North Korea;
(D)
urged all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with North Korea, including North Korean companies and financial institutions; and
(E)
called on all jurisdictions—
(i)
to protect against correspondent relationships being used to bypass or evade countermeasures and risk mitigation practices; and
(ii)
to take into account money laundering and terrorist financing risks when considering requests by North Korean financial institutions to open branches and subsidiaries in their respective jurisdictions.
(3)
On March 7, 2013, the United Nations Security Council unanimously adopted Resolution 2094, which—
(A)
welcomed the Financial Action Task Force’s—
(i)
recommendation on financial sanctions related to proliferation; and
(ii)
guidance on the implementation of such sanctions;
(B)
decided that United Nations Member States should apply enhanced monitoring and other legal measures to prevent the provision of financial services or the transfer of property that could contribute to activities prohibited by applicable United Nations Security Council resolutions; and
(C)
called on United Nations Member States to prohibit North Korean banks from establishing or maintaining correspondent relationships with banks in their respective jurisdictions to prevent the provision of financial services if such states have information that provides reasonable grounds to believe that such activities could contribute to—
(i)
activities prohibited by an applicable United Nations Security Council resolution; or
(ii)
the evasion of such prohibitions.
(b)
Sense of Congress regarding the designation of North Korea as a jurisdiction of primary money laundering concern— Congress—
(1)
acknowledges the efforts of the United Nations Security Council to impose limitations on, and to require the enhanced monitoring of, transactions involving North Korean financial institutions that could contribute to sanctioned activities;
(2)
urges the President, in the strongest terms—
(A)
to consider immediately designating North Korea as a jurisdiction of primary money laundering concern; and
(B)
to adopt stringent special measures to safeguard the financial system against the risks posed by North Korea’s willful evasion of sanctions and its illicit activities; and
(3)
urges the President to seek the prompt implementation by other states of enhanced monitoring and due diligence to prevent North Korea’s misuse of the international financial system, including by sharing information about activities, transactions, and property that could contribute to—
(A)
activities sanctioned by applicable United Nations Security Council resolutions; or
(B)
the evasion of such sanctions.
(c)
Determinations regarding North Korea—
(1)
In general— Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury, in consultation with the Secretary of State and Attorney General, and in accordance with section 5318A of title 31, United States Code, shall determine whether reasonable grounds exist for concluding that North Korea is a jurisdiction of primary money laundering concern.
(2)
Enhanced due diligence and reporting requirements— Except as provided in section 207, if the Secretary of the Treasury determines under this subsection that reasonable grounds exist for concluding that North Korea is a jurisdiction of primary money laundering concern, the Secretary, in consultation with the Federal functional regulators, shall impose 1 or more of the special measures described in paragraphs (1) through (5) of section 5318A(b) of title 31, United States Code, with respect to the jurisdiction of North Korea.
(3)
Report required—
(A)
In general— The Secretary of the Treasury shall submit a report to the appropriate congressional committees that contains the reasons for any determination under paragraph (1).
(B)
Form— The report submitted under subparagraph (A) shall be submitted in unclassified form, but may contain a classified annex.

202. Ensuring the consistent enforcement of United Nations Security Council resolutions and financial restrictions on North Korea

(a)
Findings— Congress finds that—
(1)
all member states and jurisdictions are obligated to implement and enforce applicable United Nations Security Council resolutions fully and promptly, including by blocking the property of, and ensuring that any property is prevented from being made available to, persons designated by the Security Council under applicable United Nations Security Council resolutions;
(2)
all states and jurisdictions share a common interest in protecting the international financial system from the risks of money laundering and illicit transactions emanating from North Korea;
(3)
the United States dollar and the euro are the world’s principal reserve currencies, and the United States and the European Union are primarily responsible for the protection of the international financial system from these risks;
(4)
the cooperation of the People’s Republic of China, as North Korea’s principal trading partner, is essential to—
(A)
the enforcement of applicable United Nations Security Council resolutions; and
(B)
the protection of the international financial system;
(5)
the report of the Panel of Experts established pursuant to United Nations Security Council Resolution 1874 (adopted on June 11, 2013) expressed concern about the ability of banks in—
(A)
states with less effective regulators; and
(B)
states that are unable to afford effective compliance to detect and prevent illicit transfers involving North Korea;
(6)
North Korea has historically exploited inconsistencies between jurisdictions in the interpretation and enforcement of financial regulations and applicable United Nations Security Council resolutions to circumvent sanctions and launder the proceeds of illicit activities;
(7)
Amroggang Development Bank, Bank of East Land, and Tanchon Commercial Bank have been designated by the Secretary of the Treasury, the United Nations Security Council, and the European Union as having materially contributed to the proliferation of weapons of mass destruction;
(8)
Korea Daesong Bank and Korea Kwangson Banking Corporation have been designated by the Secretary of the Treasury and the European Union as having materially contributed to the proliferation of weapons of mass destruction;
(9)
the Foreign Trade Bank of North Korea has been designated by the Secretary of the Treasury for facilitating transactions on behalf of persons linked to its proliferation network, and for serving as “a key financial node”; and
(10)
Daedong Credit Bank has been designated by the Secretary of the Treasury for activities prohibited by applicable United Nations Security Council resolutions, including the use of deceptive financial practices to facilitate transactions on behalf of persons linked to North Korea’s proliferation network.
(b)
Sense of Congress— It is the sense of Congress that the President should intensify diplomatic efforts in appropriate international fora, such as the United Nations, and bilaterally, to develop and implement a coordinated, consistent, multilateral strategy for protecting the global financial system against risks emanating from North Korea, including—
(1)
the cessation of any financial services whose continuation is inconsistent with applicable United Nations Security Council resolutions;
(2)
the cessation of any financial services to persons, including financial institutions, that present unacceptable risks of facilitating money laundering and illicit activity by the Government of North Korea;
(3)
the blocking by all states and jurisdictions, in accordance with the legal process of the state or jurisdiction in which the property is held, of any property required to be blocked under applicable United Nations Security Council resolutions; and
(4)
the blocking of any property derived from illicit activity, or from the misappropriation, theft, or embezzlement of public funds by, or for the benefit of, officials of the Government of North Korea.

203. Proliferation prevention sanctions

(a)
Export of certain goods or technology— A validated license shall be required for the export of any goods or technology otherwise covered under section 6(j) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)). No defense exports may be approved for the Government of North Korea.
(b)
Transactions in lethal military equipment—
(1)
In general— The President shall withhold assistance under the Foreign Assistance Act of 1961 (22 U.S.C. 2151 et seq.) to the government of any country that provides lethal military equipment to the Government of North Korea.
(2)
Applicability— The prohibition under this subsection with respect to a foreign government shall terminate on the date that is 1 year after the date on which the restriction under paragraph (1) may have been applied.
(c)
Waiver— The Secretary of State may waive the prohibitions under this section with respect to a country if the Secretary determines that it is in the national interest of the United States to do so.
(d)
Exception— The prohibitions under this section shall not apply to the provision of assistance for human rights, democracy, rule of law, or emergency humanitarian assistance.

204. Procurement sanctions

(a)
In general— Except as provided in this section, the United States Government may not procure, or enter into any contract for the procurement of, any goods or services from any designated person.
(b)
Federal Acquisition Regulation—
(1)
In general— The Federal Acquisition Regulation issued pursuant to section 1303 of title 41, United States Code, shall be revised to require that each person that is a prospective contractor submit a certification that such person does not engage in any of the conduct described in section 104(a).
(2)
Applicability— The revision referred to in paragraph (1) shall apply with respect to contracts for which solicitations are issued on or after the date that is 90 days after the date of the enactment of this Act.
(c)
General Services Administration—
(1)
Inclusion on list— The Administrator of General Services shall include, on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs maintained by the Administrator under part 9 of the Federal Acquisition Regulation, each person that is debarred, suspended, or proposed for debarment or suspension by the head of an executive agency on the basis of a determination of a false certification under subsection (b).
(2)
Contract termination; suspension— If the head of an executive agency determines that a person has submitted a false certification under subsection (b) after the date on which the Federal Acquisition Regulation is revised to implement the requirements of this section, the head of such executive agency shall—
(A)
terminate a contract with such person; or
(B)
debar or suspend such person from eligibility for Federal contracts for a period of not more than 2 years.
(3)
Applicable procedures— Any debarment or suspension under paragraph (2)(B) shall be subject to the procedures that apply to debarment and suspension under the Federal Acquisition Regulation under subpart 9.4 of part 9 of title 48, Code of Federal Regulations.
(d)
Clarification regarding certain products— The remedies specified in subsections (a) through (c) shall not apply with respect to the procurement of any eligible product (as defined in section 308(4) of the Trade Agreements Act of 1979 (19 U.S.C. 2518(4)) of any foreign country or instrumentality designated under section 301(b) of such Act (19 U.S.C. 2511(b)).
(e)
Rule of construction— Nothing in this subsection may be construed to limit the use of other remedies available to the head of an executive agency or any other official of the Federal Government on the basis of a determination of a false certification under subsection (b).
(f)
Executive agency defined— In this section, the term executive agency has the meaning given such term in section 133 of title 41, United States Code.

205. Enhanced inspection authorities

(a)
Report required— Not later than 180 days after the date of the enactment of this Act, and annually thereafter, the President shall submit a report to the appropriate congressional committees that identifies foreign ports and airports whose inspections of ships, aircraft, and conveyances originating in North Korea, carrying North Korean property, or operated by the Government of North Korea are not sufficient to effectively prevent the facilitation of any of the activities described in section 104(a).
(b)
Enhanced customs inspection requirements— The Secretary of Homeland Security may require enhanced inspections of any cargo landed in the United States or entering the stream of interstate commerce that has been transported through a port or airport identified by the President under subsection (a).
(c)
Seizure and forfeiture— A vessel, aircraft, or conveyance used to facilitate any of the activities described in section 104(a) under the jurisdiction of the United States may be seized and forfeited under—
(1)
chapter 46 of title 18, United States Code; or
(2)
under the Tariff Act of 1930 (19 U.S.C. 1202 et seq.).

206. Travel sanctions

The Secretary of State may deny a visa to, and the Secretary of Homeland Security, pursuant to section 104, may deny entry into the United States of, any alien who is—
(1)
a designated person;
(2)
a corporate officer of a designated person; or
(3)
a principal shareholder with a controlling interest in a designated person.

207. Exemptions, waivers, and removals of designation

(a)
Exemptions—
(1)
In general— The following activities shall be exempt from sanctions under sections 104 and 206:
(A)
Activities subject to the reporting requirements under title V of the National Security Act of 1947 (50 U.S.C. 413 et seq.), or to any authorized intelligence activities of the United States.
(B)
Any transaction necessary to comply with United States obligations under the Agreement between the United Nations and the United States of America regarding the Headquarters of the United Nations, signed June 26, 1947, and entered into force on November 21, 1947, or under the Vienna Convention on Consular Relations, signed April 24, 1963, and entered into force on March 19, 1967, or under other international agreements.
(C)
Any financial transaction for which the exclusive purpose is to import agricultural products, medicine, or medical devices into North Korea if such supplies or equipment—
(i)
are designated as “EAR 99” under the Export Administration Regulations (15 C.F.R. 730 et seq.); and
(ii)
are not controlled under—
(I)
the Export Administration Act of 1979 (50 U.S.C. App. 2401 et seq.), as continued in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.);
(II)
the Arms Export Control Act (22 U.S.C. 2751 et seq.);
(III)
part B of title VIII of the Nuclear Proliferation Prevention Act of 1994 (22 U.S.C. 6301 et seq.); or
(IV)
the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (22 U.S.C. 5601 et seq.).
(2)
Export administration regulations defined— In this subsection, the term Export Administration Regulations means the regulations set forth in subchapter C of chapter VII of title 15, Code of Federal Regulations (15 C.F.R. 730 et seq.) and maintained and amended under the authority of the International Emergency Economic Powers Ac (50 U.S.C. 1701 et seq.).
(b)
Waiver— The President may waive, for 1-year renewable periods, the application of the sanctions authorized under section 104, 204, 205, or 206 if the President submits to the appropriate congressional committees a written determination that the waiver meets 1 or more of the following requirements:
(1)
The waiver is important to the national security interests of the United States.
(2)
The waiver will further the enforcement of this Act or is for an important law enforcement purpose.
(3)
The waiver is for an important humanitarian purpose, including any of the purposes described in section 4 of the North Korean Human Rights Act of 2004 (22 U.S.C. 7802).
(c)
Financial services for humanitarian and consular activities— The President may promulgate such regulations, rules, and policies as may be necessary to facilitate the provision of financial services by a foreign financial institution that is not controlled by the Government of North Korea in support of the activities subject to exemption under this Act.