On January 2, 2015, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) blocked the property and interests in property of several North Korean entities and representatives operating outside North Korea. The designations followed the issuance of an Executive Order that authorized sanctions against the government of North Korea and the Worker’s Party of Korea, the country’s ruling political party. The Executive Order, which President Obama issued in response to the North Korean government’s recent cyber-attack targeting Sony Pictures Entertainment, authorizes OFAC to block the property and interests in property of the government of North Korea and the Worker’s Party of Korea, and all agencies and instrumentalities thereof; all officials of the North Korean government and the Workers’ Party of Korea; and any entities found to be materially supporting or providing goods and services to support the North Korean government.
Pursuant to the Executive Order, OFAC has added to the Specially Designated Nationals and Blocked Persons List (SDN List) several entities and individuals linked to the North Korean government. Given that U.S. business with North Korea is limited, OFAC appears to be targeting North Korean interests outside the country’s borders. Designated entities include:
- The Reconnaissance General Bureau, North Korea’s primary intelligence organization.
- Korea Mining Development Trading Corporation (KOMID), North Korea’s primary arms dealer and exporter, with operations in China, Russia, Iran, and Syria.
- Korea Tangun Trading Corporation, which is primarily responsible for procuring goods and technologies to support North Korea’s defense research and development programs, and has operations in China.
- Several individuals designated as SDNs that also operate outside North Korea.
U.S. persons, including U.S. citizens and U.S. companies, are prohibited from doing business with these designated entities, and must freeze any assets belonging to these SDNs over which they have control. While U.S. business with North Korea is not significant, U.S. companies should be aware of the potential impact that these designations could have on their own business interests and operations. Additional designations are expected in the near future, with recent reports indicating that the U.S. government is considering sanctions targeting North Korea’s links to the international financial system.