Archive for the ‘USA’ Category

FinCEN designates Latvian Bank for North Korea links

Wednesday, February 14th, 2018

UPDATE 1 (2018-2-19): According to the AFP:

The European Central Bank said Monday it has frozen payments by the third-largest bank in tiny Baltic state Latvia, as its finances have deteriorated in the wake of money laundering allegations from Washington.

“Temporarily, and until further notice, a prohibition of all payments by ABLV bank on its financial liabilities has been imposed, and is now in effect,” the ECB said in a statement.

It is the first time the ECB has used its power to impose a moratorium since taking on eurozone-wide banking supervision responsibilities in 2014.

The US Department of the Treasury last week named ABLV “an institution of primary money laundering concern” and accused it of connections to North Korea’s weapons development programme.

ABLV’s financial position, which had previously been stable, has rapidly deteriorated since as it found its access to the financial system cut off, even threatening the bank’s survival.

In late September 2017, the bank’s balance sheet stood at around 3.6 billion euros ($4.5 billion), with 1.0 billion euros of loans and 2.7 billion in deposits.

Just two days before the ECB’s moratorium, Latvian supervisor FCMC issued a statement saying the bank’s capital and liquidity ratios — key indicators of a bank’s financial health — were in good shape.

The ECB decision on Monday comes after Latvian central bank governor Ilmars Rimsevics, who sits on the ECB governing council, was arrested Saturday by the country’s Corruption Prevention Bureau (KNAB).

A source familiar with the case told AFP there was no connection between the ABLV case and the governor’s arrest.

ORIGINAL POST (2018-2-14): According to the FinCEN press release:

FinCEN Finds the Bank Orchestrates Money Laundering Schemes, Obstructs Regulatory Enforcement, and Has Conducted Activity Linked to North Korea

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) today issued a finding and notice of proposed rulemaking (NPRM), pursuant to Section 311 of the USA PATRIOT Act, seeking to prohibit the opening or maintaining of a correspondent account in the United States for, or on behalf of, ABLV Bank. FinCEN is proposing this action based on its finding set out in the NPRM that ABLV is a foreign bank of primary money laundering concern.

“FinCEN will continue to take action against foreign banks that disregard anti-money laundering safeguards and become conduits for widespread illicit activity,” said Steven T. Mnuchin, Secretary of the Treasury. “Deficient practices at banks foster a wide array of illicit conduct, including activity linked to North Korea’s weapons program and corruption connected to Russia and Ukraine. FinCEN is committed to protecting the U.S. financial system from these types of risks.”

As described in the finding, ABLV has institutionalized money laundering as a pillar of the bank’s business practices. ABLV’s management permits the bank and its employees to orchestrate money laundering schemes; solicits high-risk shell company activity that enables the bank and its customers to launder funds; maintains inadequate controls over high-risk shell company accounts; and seeks to obstruct enforcement of Latvian anti-money laundering and combating the financing of terrorism (AML/CFT) rules in order to protect these business practices.

ABLV’s failure to implement, and disregard for, effective AML/CFT and sanctions policies and procedures have made the bank attractive to a range of illicit actors engaged in organized crime, weapons proliferation, corruption, and sanctions evasion. Illicit financial activity at the bank includes transactions for parties connected to UN-designated entities, some of which are involved in North Korea’s procurement or export of ballistic missiles. In addition, ABLV has facilitated transactions for corrupt politically exposed persons and has funneled billions of dollars in public corruption and asset stripping proceeds through shell company accounts. ABLV failed to mitigate the risk stemming from these accounts, which involved large-scale illicit activity connected to Azerbaijan, Russia, and Ukraine.

Section 311 actions alert the U.S. financial sector to foreign institutions, such as ABLV, that are of primary concern and through the public rulemaking process, if necessary, cut them off from the U.S. financial sector.

Here is coverage in the Korea Herald:

Last year, an investigation by the US Federal Bureau of Investigation and Treasury found that five other Latvian banks, which mainly serve nonresident clients, violated the United Nations Security Council’s sanctions against North Korea and rules on anti-money laundering and the financing of terrorism.

Latvia’s Financial and Capital Market Commission confirmed the banks’ illicit activity and assigned it financial penalties totaling 3.5 million euros ($4.3 million).

It is the third time the US government has imposed sanctions against a foreign bank for dealing with North Korea.

In 2005, Macau-based Banco Delta Asia had some $25 million in North Korean funds frozen under US sanctions, as 24 companies including Chinese banks stopped dealing with the North, putting Pyongyang under severe financial strain. The US also blacklisted China’s Bank of Dandong in June last year for laundering money for North Korea.

“We have made clear to countries and companies around the world that they can choose to trade with North Korea or the United States, but not both,” the US Treasury’s Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker said in an anti-money laundering and financial crimes conference in New York on Tuesday.

“We will target not only companies that actually know they are being exploited, but also those that should know. We are resolved that anyone who knowingly aids North Korea faces being cut off from the US financial system.”

Read the full story here:
Latvian bank faces US sanctions for dealing with NK
Kim So-hyun
Korea Herald
2018-2-14

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UN security council adopts sanctions banning imports of wide range of North Korean goods

Saturday, August 5th, 2017

Benjamin Katzeff Silberstein:?

On Saturday August 5th, the United Nations Security Council approved a resolution banning member states from importing North Korean export goods such as minerals and seafood products, and from hiring North Korean laborers. Wall Street Journal:

U.S. Ambassador Nikki Haley praised the council?s solidarity, saying more days like this one were needed at the United Nations. She also personally thanked China for helping move the resolution from talk to action. The U.S., which had drafted and put forward the resolution, negotiated for more than a month with China over the text and final measures targeting Pyongyang.

?This resolution is the single largest economic sanctions package ever leveled against the North Korean regime,? said Ms. Haley, adding the council had put the country and its leadership ?on notice? and ?what happens next is up to North Korea.?

President Donald Trump?said on Twitter, ?The United Nations Security Council just voted 15-0 to sanction North Korea. China and Russia voted with us. Very big financial impact!?

Both China and Russia urged a return to talks with North Korea and told the Security Council that the U.S. must abandon?its military exercises with South Korea?and dismantle?the missile-defense system in South Korea known as Thaad?because North Korea perceived that as a threat and it undermined the security of the region.

?We stress that additional restrictions cannot be an end to themselves, they need to be a tool to engage in dialogue,? said Russia?s new ambassador to the U.N., Vassily Nebenzia.

The nine-page resolution steps up trade restrictions with Pyongyang by aiming to cut off a third of its $3 billion annual export revenue. It bans North Korea from trading coal, iron, lead, iron and lead ore, and seafood.

The resolution also prohibits countries from hiring North Korean laborers and bans countries from entering or investing into new joint ventures with Pyongyang.

Diplomats and sanctions experts have long warned that export revenues, even remittances from foreign workers, are cycled back to North Korea?s military and nuclear programs.

A Security Council diplomat offered this estimate on North Korea?s foreign revenue earnings in 2017: $295 million from seafood; $251 million from iron and iron ore, and $400 million from coal trade.

North Koreans work in China, Russia and the Arab countries in the Persian Gulf in a variety of businesses ranging from factories to restaurants and nightclubs and are estimated to send home several billion dollars in revenue, a large portion of which the government claims, according to U.N. sanctions experts.

The new resolution restricts North Korea?s technology trade and tightens enforcement of sanctions on North Korean vessels by banning violators from entering ports around the world.

Under the resolution, North Korea?s Foreign Trade Bank, which handles foreign exchange, will be added the U.N.?s sanctions list that freezes the assets of targeted entities.

It remains to be seen whether the new sanctions will deter North Korea?s pursuit of advanced ballistic missiles and nuclear weapons or bring its leader Kim Jong Un to the negotiating table.

North Korea?s economy has managed to stay afloat largely because China, its main trade partner, and Russia and some African nations haven?t fully enforced existing U.N. sanctions. The U.S. Treasury in June sanctioned Chinese entities?primarily banks and shipping companies?and individuals for violating sanctions and conducting trade that contributed to North Korea?s military and nuclear program.

China?s Ambassador Liu Jieyi said his country denounced unilateral sanctions by the U.S. and said action against North Korea must be through the U.N. mechanism. Mr. Liu told the council he welcomed the U.S. position that it wasn?t?seeking regime change in North Korea.

?China has always been firmly opposed to chaos and conflict in the [Korean] peninsula,? Mr. Liu said.

Although China and Russia have pushed for a resumption of the six-party talks with North Korea, disagreement remains on how to bring Washington and Pyongyang to the table. China and Russia have called for a freeze-for-freeze plan under which North Korea would halt any more military or nuclear action and the U.S. would end its military exercises with South Korea.

Full article here:
North Korea Hit by $1 Billion Sanctions After Missile
Farnaz Fassihi
Wall Street Journal
2017-08-5

 

The UN summary of the resolution reads as follows:

The Security Council today further strengthened its sanctions regime against the Democratic People?s Republic of Korea, condemning in the strongest terms that country?s ballistic missile launches and reaffirming its decision that Pyongyang shall abandon all nuclear weapons and existing nuclear programmes in a complete, verifiable and irreversible manner.

Unanimously adopting resolution?2371?(2017) under Article?41, Chapter?VII of the United Nations Charter, the 15-nation Council decided that the Democratic People?s Republic of Korea shall not supply, sell or transfer coal, iron, iron ore, seafood, lead and lead ore to other countries.

Expressing concern that Democratic People?s Republic of Korea nationals working abroad were generating foreign export earnings to support the country?s nuclear and ballistic missile programmes, it also decided that all Member States shall not increase the total number of work authorizations for such persons in their jurisdictions, unless approved by the Security Council Committee established pursuant to resolution?1718?(2006).

Through the text, the Council decided that States shall prohibit the opening of new joint ventures or cooperative entities with the Democratic People?s Republic of Korea entities and individuals, or expand existing joint ventures through additional investments.? In addition, it decided that Pyongyang shall not deploy or use chemical weapons and urgently called for it to accede to the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and Their Destruction.

Also through the resolution, the Council named nine individuals and four entities to be subject to a travel ban and asset freeze already in place, as well as to request that the International Criminal Police Organization (INTERPOL) issue special notices with respect to designated individuals.

In addition, it reaffirmed that its provisions were not intended to have adverse humanitarian consequences for the civilian population of the Democratic People?s Republic of Korea, and that the Security Council Committee established pursuant to resolution?1718 (2006), on a case-by-case basis, exempt from sanctions those activities that would facilitate the work of international and non?governmental organizations engaged in assistance and relief activities for civilian benefit.

Furthermore, through the text, the Council called for the resumption of the Six-Party Talks between China, Democratic People?s Republic of Korea, Japan, Republic of Korea, Russian Federation and the United States towards the goal of a verifiable and peaceful denuclearization of the Korean Peninsula.

Speaking after the resolution?s adoption, the representative of the United States said the Council had put the Democratic People?s Republic of Korea?s dictator on notice by increasing the penalty of its ballistic missile activity to a whole new level.? All Member States must do more to put more pressure on that country, she said, adding that the United States would take defensive measures to protect itself and its allies, including through joint military exercises.

China?s representative said that, while today?s resolution had imposed further sanctions, it did not intend to negatively impact such non-military goods as food and humanitarian aid.? Calling on all parties to implement the resolution?s provisions fully and earnestly, he recalled that China and the Russian Federation on 4?July had put forward a road map to resolve the issue through two parallel tracks ? denuclearization and the establishment of a peace mechanism.? Recalling that the United States had recently indicated that it was not pushing for regime change or for the Korean Peninsula?s reunification, he said an escalation of military activities would be detrimental to all countries of the region.

Japan?s delegate said the sheer number and frequency of the Democratic People?s Republic of Korea?s nuclear and ballistic missile tests ?show how unprecedented and unacceptable these provocations are?.? Not only was the quantity outrageous, but the qualitative advancements were alarming.? Noting that today?s resolution would reduce the Democratic People?s Republic of Korea?s revenue by approximately $1?billion, he said all Member States must demonstrate renewed commitment to implement the Council?s decisions.

The Russian Federation?s representative, while calling on the Democratic People?s Republic of Korea to end its banned programmes, said progress would be difficult so long as it perceived a direct threat to its security. ?Emphasizing that military misadventures risked creating a disaster, he said sanctions must be a tool for engaging Pyongyang in constructive talks rather than to seek the country?s economic asphyxiation.

The Republic of Korea?s delegate said that Pyongyang?s missile provocations on 4?and 28?July, together with its nuclear programme, posed a grave threat to international peace and security.? Indeed, such reckless acts of defiance should be met with stronger measures, he said, adding that additional sanctions contained in resolution?2371?(2017) would significantly cut off the inflow of hard currency that would otherwise have been diverted to illicit weapons programmes.

Full article:
Security Council Toughens Sanctions Against Democratic People?s Republic of Korea,?Unanimously Adopting Resolution 2371 (2017)
United Nations Meetings Coverage
2017-08-05

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US tightens sanctions against DPRK’s UN diplomats

Wednesday, December 21st, 2016

According to Reuters:

The U.S. Treasury Department tightened sanctions against North Korean diplomats to the United Nations, requiring banks to get special permission before granting them accounts, the agency said in a notice posted online Tuesday.

The United States removed an exemption in the broad economic sanctions against Pyongyang that had allowed U.S. banks to service North Korean diplomats without getting specific permission from the Treasury Department Office of Foreign Assets Control (OFAC).

Banks will now have to obtain a special license from OFAC before opening bank accounts, processing transactions or extending credit for North Korean diplomats or their family members, OFAC said. North Korea’s U.N. mission did not immediately respond to a request for comment.

U.S. officials have long said North Korea uses the bank accounts of diplomats to help Pyongyang conduct business around the world, despite economic sanctions.

A U.S. intelligence official, speaking on condition of anonymity, said North Korea “seeks to alleviate its economic isolation” by bringing back currency from overseas “using all available avenues.”

For example, said another U.S. intelligence official, North Korea sells cigarettes and illegal drugs outside the country and use diplomatic packages to send the cash back home.

Washington has been ramping up economic sanctions against Pyongyang since a nuclear test and rocket launch this year, seen as provocations by the United States and its allies.

Under new U.N. sanctions adopted last month in response to North Korea’s fifth and largest nuclear test in September, countries are required to limit the number of bank accounts to one per North Korean diplomatic mission and one per diplomat.

Here is the official statement from OFAC:

Publication of Updated North Korea-related General License
12/20/2016

The Office of Foreign Assets Control (OFAC) has amended General License 1 pursuant to E.O. 13722 of March 15, 2016, “Blocking Property of the Government of North Korea and the Workers’ Party of Korea, and Prohibiting Certain Transactions With Respect to North Korea.” General License 1-A no longer authorizes U.S. financial institutions to open and operate accounts for the diplomatic mission of North Korea and its employees and their families. It now requires that funds transfers to or from the mission or its employees be conducted through an account at a U.S. financial institution that has been specifically licensed by OFAC.

I am generally behind on blog posts this year and plan to catch up, including coverage of sanctions, in the next.

The Reuters story can be found here:
U.S. tightens sanctions against North Korea’s U.N. diplomats
Joel Schectman; Additional reporting by Michelle Nichols in New York
Reuters
2016-12-20

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US Treasury “311s” North Korea

Thursday, June 2nd, 2016

Here is the statement from the Treasury Department:

Treasury Takes Actions To Further Restrict North Korea’s Access to The U.S. Financial System

6/1/2016

Action Responds to the Threat that North Korea Poses to the Global Financial System; the United States Calls on International Partners to Similarly Takes Steps toward Severing Banking Relationships with the Dangerous Regime

WASHINGTON – Today, the U.S. Department of the Treasury announced a Notice of Finding that the Democratic People’s Republic of Korea (North Korea) is a jurisdiction of “primary money laundering concern” under Section 311 of the USA PATRIOT Act. Treasury, through its Financial Crimes Enforcement Network (FinCEN), also released a notice of proposed rulemaking (NPRM) recommending a special measure to further isolate North Korea from the international financial system by prohibiting covered U.S. financial institutions from opening or maintaining correspondent accounts with North Korean financial institutions, and prohibiting the use of U.S. correspondent accounts to process transactions for North Korean financial institutions.

Section 311 gives the Secretary of the Treasury the authority to identify a foreign jurisdiction to be a primary money laundering concern. Once identified, the Secretary can require U.S. financial institutions to take appropriate countermeasures. The special measure proposed in today’s NPRM would impose the most significant measure available to the Secretary under Section 311.

“The United States, the UN Security Council, and our partners worldwide remain clear-eyed about the significant threat that North Korea poses to the global financial system. The regime is notoriously deceitful in its financial transactions in order to continue its illicit weapons programs and other destabilizing activities,” said Adam J. Szubin, Acting Under Secretary for Terrorism and Financial Intelligence. “Today’s action is a further step toward severing banking relationships with North Korea and we expect all governments and financial authorities to do likewise pursuant to the new UN Security Council Resolution. It is essential that we all take action to prevent the regime from abusing financial institutions around the world – through their own accounts or other means.”

Reasons for This 311 Determination

Treasury is taking this action consistent with the North Korea Sanctions and Policy Enhancement Act, enacted on February 18, 2016, which requires Treasury to determine within 180 days whether reasonable grounds exist for concluding that North Korea is a jurisdiction of primary money laundering concern, and if so, to propose one or more special measures. In addition, the United Nations Security Council adopted Resolution 2270 on March 2, 2016, which in part requires UN Member States to sever correspondent banking relationships with North Korean financial institutions within 90 days of the adoption of the resolution.

North Korea is proposed for action under Section 311 because (1) North Korea uses state-controlled financial institutions and front companies to conduct international financial transactions that support the proliferation and development of WMD and ballistic missiles; (2) North Korea is subject to little or no bank supervision anti-money laundering or combating the financing of terrorism (“AML/CFT”) controls; (3) North Korea has no diplomatic relationship, and thus no mutual legal assistance treaty, with the United States and does not cooperate with U.S. law enforcement and regulatory officials in obtaining information about transactions originating in or routed through or to North Korea; and (4) North Korea relies on the illicit and corrupt activity of high-level officials to support its government.

Impact of the 311 Notice of Finding and the NPRM Special Measure

While current U.S. law already generally prohibits U.S. financial institutions from engaging in both direct and indirect transactions with North Korean financial institutions, this NPRM, if finalized, would require U.S. financial institutions to implement additional due diligence measures in order to prevent North Korean banking institutions from gaining improper indirect access to U.S. correspondent accounts. While North Korea’s financial institutions do not maintain correspondent accounts with U.S. financial institutions, North Korean financial institutions frequently conduct transactions on behalf of the North Korean government and state-controlled corporations. The NPRM, if finalized, would prohibit the use of third-country banks’ U.S. correspondent accounts to process transactions for North Korean financial institutions.

Italics added for emphasis.

The “Notice of Finding” is here, and is also worth reading.

According to the Wall Street Journal:

Treasury Department officials said they are moving to ban non-U.S. banks and entities from processing dollar transactions on behalf of North Korea, an arrangement known as a U-turn, in a move to block its international trade.

China is by far Pyongyang’s largest trading partner, and Chinese firms could be caught in the crosshairs, according to current and former U.S. officials.

Zhu Haiquan, the spokesman for China’s embassy in Washington, repeated Beijing’s warnings against what it considers “unilateral sanctions taken by any country.”

He added that “we should avoid any move that may further aggravate tensions” on the Korean peninsula, and said “the unilateral sanctions must not affect and harm the legitimate rights and interests of China.”

U.S. officials were pleased that China agreed in March to support the new U.N. sanctions, which could significantly impair North Korea’s ability to generate hard currency and ship its exports.

Still, U.S. officials have voiced skepticism that Beijing would significantly punish Pyongyang, a longtime ally. China has rebuked North Korea in the past for its nuclear and missile tests, only to increase investment and trade with the country.

The issue is likely to be among the topics discussed when Messrs. Kerry and Lew meet top Chinese officials in Beijing for the Strategic and Economic Dialogue, a series of annual bilateral meetings.

According to the New York Times:

As a practical matter, that would largely affect Chinese banks, which facilitate North Korea’s financial transactions with Beijing, its largest trading partner. It could also affect some institutions in the nominally autonomous Chinese regions of Macau and Hong Kong, as well as in Singapore, where Pyongyang has often gone to hide the true nature of its banking activities, and to pay for missiles, nuclear fuel and the huge infrastructure it has built around those programs.

It is hard to assess how much the action will hurt North Korea. Such sanctions against financial institutions doing business with Iran proved effective because Tehran had billions of dollars in monthly oil and other energy exports that could be choked off; North Korea has none. Oftentimes Pyongyang deals in cash. Until a few years ago it was one of the largest counterfeiters of $100 bills. But that once-lucrative fraud was largely cut off by the redesign of the $100 bill.

Banks in the United States are already prohibited from doing business with financial institutions in North Korea. But the recommended rules would require them to perform additional due diligence to ensure they are not inadvertently transacting with North Korean financial institutions or the Pyongyang government through shell companies or other fictitious entities.

Notice of the new rules has been published by the Federal Register. Feel free to comment if you like.

Josh also writes a walk-through of how this works.

Here is information from Choson Exchange.

Troy Stangarone writes about the sanctions for KEI.

The UK also strengthened financial sanctions against the DPRK.

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DPRK and FATF (UPDATED)

Tuesday, May 17th, 2016

UPDATE 10 (2106-5-19): Wendy Zeldin has published an analysis of the DPRK’s AML statue at the Library of Congress Global Legal Monitor. Here is a simplified version of her report:

On April 20, 2016, the Presidium of the Supreme People’s Assembly of the Democratic People’s Republic of Korea (DPRK) issued a decree on the adoption of the Law on Anti-Money Laundering and Combating Financing of Terrorism. The Law has 40 articles divided among six chapters. According to the decree, the former Law on Anti-Money Laundering, which was adopted on October 25, 2006, no longer has any binding force.

The subjects covered by the new Law are:

-the Law’s objectives, the establishment of a national coordinating committee for anti-money laundering and combating financing of terrorism (AML/CFT) actions, and the scope of the Law’s application;
-the obligations of reporting institutions on verification of customer identification data, the establishment of an internal reporting system for large or suspicious transactions, and the reporting procedures for such types of transactions and confidentiality;
-the placement in and status of the financial intelligence unit (FIU) in the government structure, the FIU’s obligations and powers, and the operation of its database, among other matters;
-AML/CFT supervisory and regulatory institutions, obligations and powers of the Financial Supervisory Bureau, the tasks of customs agencies, and the obligations and powers of law enforcement institutions;
-the principles of international cooperation, the institutions involved in international cooperation, and the types of international cooperation for AML/CFT purposes; and
the property subject to sanctions and handling of complaints in connection with AML/CFT activities and the settlement of such complaints.

Expert observers are of the view that the adoption of the new Law indicates North Korea’s desire to join the Financial Action Task Force (FATF), the international AML organization. More specifically, they suggest, it seems that North Korea is seeking to become a full member of the Asia Pacific Group on Money Laundering (APG), a regional body of the FATF that North Korea joined as an observer in July 2014. However, the FATF has blacklisted North Korea, along with Iran. North Korea and Iran are identified by the FATF as being among 13 “high risk and non-cooperative jurisdictions” and the only two for which there is a “call for action.”

The blacklisting entails enhanced monitoring of and restrictions on financial access of North Korean financial institutions by the international financial system, according to Tristan Webb, former senior DPRK research analyst for the Foreign and Commonwealth Office of the United Kingdom. (Choi, supra.) In addition, according to article 34 of Resolution 2270 of the United Nations Security Council, adopted in March in response to North Korea’s nuclear test of January 6, 2016, “States shall prohibit financial institutions within their territories or subject to their jurisdiction from opening new representative offices or subsidiaries, branches or banking accounts in the DPRK.” Webb noted that even if the DPRK meets the FATF standards, the financial sanctions will not necessarily be lifted.

Adoption of the new Law alone will not lead to full APG membership; North Korea will also have to “reveal annual reports for three years for the purpose of monitoring to judge its sincerity,” according to Rhee Yoojin, a research fellow with the Korea Development Bank based in Seoul. (Id.) On the other hand, although the Law’s adoption does not necessarily mean that North Korea will institute an open door policy or aggressive economic reforms, “it does signify its desire to overcome international sanctions” that have prevented foreign financial organizations from seeking to enter the country, Rhee stated.

UPDATE 9 (2016-5-17): KCNA announces that the DPRK has passed a law on anti-money laundering:

Law on AML/CFT Adopted in DPRK

Pyongyang, May 17 (KCNA) — The Law of the Democratic People’s Republic of Korea on Anti-Money Laundering and Combating Financing of Terrorism was adopted.

The Presidium of the Supreme People’s Assembly of the DPRK promulgated a decree on the adoption of the law on April 20.

The Law on AML/CFT consists of 6 chapters with 40 articles.

Chapter 1 (Articles 1-6) defines the fundamentals of the law such as its objective, principle in the AML/CFT efforts, the establishment of the National Coordinating Committee and the scope of application.

Chapter 2 (Article 7-24) specifies the obligations and principles of reporting institutions concerning the verification of identification data obtained from the customer, establishment of internal reporting system of large or suspicious transactions, reporting large or suspicious transactions and confidentiality.

Affiliation and status of the financial intelligence unit (FIU), obligations and powers of FIU, operation of database, etc. are stipulated in Chapter 3 (Articles 25-28).

Chapter 4 (Articles 29-31) concerning the supervisory and regulatory institutions clarifies the obligations and powers of the Financial Supervisory Bureau, functions of customs and obligations and powers of law enforcement institutions.

Principles in international cooperation, institutions involved in international cooperation, types of international cooperation for AML/CFT purposes are defined in Chapter 5 (Articles 32-34).

Chapter 6 (Articles 35-40) stipulates the property subject to sanctions, complaints in respect of AML/CFT and their settlement.

The Law on Anti-Money Laundering adopted on Oct. 25, Juche 95 (2006) has no binding force any longer, the decree said.

UPDATE 8 (2015-6-29):  FATF says member states should pay “special attention” to financial transactions with North Korea. According to VOA:

The Paris-based Financial Action Task Force last week reaffirmed its earlier decision to put the community country on its watch list because of North Korea’s “failure to address the significant deficiencies in its anti-money laundering and combating the financing of terrorism,” the task force said in a public statement released on its website. It said that failure poses “serious threat … to the integrity of the international financial system.”

The task force had a plenary meeting last week in Brisbane, Australia.

“The FATF reaffirms its 25 February 2011 call on its members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with the [Democratic People’s Republic of Korea], including DPRK companies and financial institutions,” it said.

The group also expressed concern about the North’s noncompliance with its recommendations to fight money laundering.

In an apparent attempt to ease financial sanctions by the United States and the United Nations, the North promised steps to address money laundering concerns. In July 2014, Pyongyang announced it had joined the Asian affiliate of the anti-money laundering body as an observer. Later, the North sent a letter to the FATF indicating its commitment to implementing actions recommended by the group.

The FATF, created in 1989, has 36 members, comprising 34 member countries and territories and two regional organizations.

UPDATE 7 (2015-3-16): Following the FATFs statement regarding the DPRK on February 27, the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a new advisory.

Read the full advisory here (PDF)

Here is coverage in Yonhap.

UPDATE 6 (2015-2-17): The FATF has issued another statement on North Korea:

The Financial Action Task Force (FATF) is the global standard setting body for anti-money laundering and combating the financing of terrorism (AML/CFT). In order to protect the international financial system from money laundering and financing of terrorism (ML/FT) risks and to encourage greater compliance with the AML/CFT standards, the FATF identified jurisdictions that have strategic deficiencies and works with them to address those deficiencies that pose a risk to the international financial system.

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/FT) risks emanating from the jurisdictions.

Iran
Democratic People’s Republic of Korea (DPRK)

Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction, as described below.

Algeria
Ecuador
Myanmar

———–
Democratic People’s Republic of Korea (DPRK)

Since October 2014, the DPRK sent a letter to the FATF indicating its commitment to implementing the action plan developed with the FATF.

However, the FATF remains concerned by the DPRK’s failure to address the significant deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime and the serious threat this poses to the integrity of the international financial system. The FATF urges the DPRK to immediately and meaningfully address its AML/CFT deficiencies.

The FATF reaffirms its 25 February 2011 call on its members, and urges all jurisdictions, to advise their financial institutions to give special attention to business relationships and transactions with the DPRK, including DPRK companies and financial institutions. In addition to enhanced scrutiny, the FATF further calls on its members, and urges all jurisdictions, to apply effective counter-measures to protect their financial sectors from ML/FT risks emanating from the DPRK. Jurisdictions should also protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices, and take into account ML/FT risks when considering requests by DPRK financial institutions to open branches and subsidiaries in their jurisdiction.

UPDATE 5 (2015-2-4): NK News picked up the Choson Sinbo piece and offered these comments:

But other regime watchers suggested that there are at least certain segments of the North Korean elite who do indeed want money laundering combated.

“There’s a cohort of DPRK businessmen who want the country to take more active steps in dealing with financial improprieties because they are losing money or opportunities,” said Michael Madden of North Korea Leadership Watch. “The DPRK leadership, particularly Foreign Minister Ri Su Yong, is thinking more long-term on this.”

And Christopher Green of the Daily NK suggested that this was an effort by the North Korean government to not only avoid sanctions, but assert its control over the domestic financial industry by cracking down on money launderers.

“The state wants to bring into its remit all those rogue financial elements that occasionally tend to fall outside the remit of the ruling coalition,” he said. “The state is in a constant battle to stay as top dog in the financial sector in a country where so much is illegal for historical and political reasons – and illegality is always exploited eventually.”

And Daniel Pinkston of the International Crisis Group suggested that the North may have its eye on its northern neighbor with this move.

“I think it will be helpful – from the DPRK perspective – if Pyongyang ever needs to plead their case with Beijing to avoid financial sanctions that include Chinese banks since they are critical for the DPRK’s international financial linkages,” Pinkston said.

Kim Chon Gyun told the Choson Sinbo that the nation’s penal code has already been revised to reflect international standards when punishing money laundering.

UPDATE 4 (2015-2-3): Yonhap reports on the recent Chosun Sinbo article:

North Korea has created a national committee on efforts to fight money laundering and terrorist financing, a senior Pyongyang official confirmed Tuesday.

The communist nation’s move came after it joined the Asia/Pacific Group on Money Laundering (APG), the Asia-Pacific arm of the Financial Action Task Force (FATF) under the Organization for Economic Cooperation and Development (OECD), last year.

“The National Coordinating Committee is an organ to guide projects to prevent money laundering and financing of terrorism,” Kim Chon-gyun, head of North Korea’s central bank said in an interview with the Chosun Sinbo. The newspaper is published by the pro-Pyongyang General Association of Korean Residents in Japan, or Chongryon.

The panel, chaired by a deputy premier of the Cabinet, involves officials from the central bank, the foreign ministry, the finance ministry, and law-enforcement authorities, he added.

The North has already revised its penal code to take punitive measures against related violations in accordance with international norms, said Kim.

In January, Pyongyang said that it sent a letter to the FATF, based in Paris, pledging the sincere implementation of an action plan to meet global anti-money laundering standards.

UPDATE 3 (2015-2-3): The Chosun Sinbo has posted an article on anti-money laundering measures in the DPRK. Here is a rough translation:

[Interview] Kim Chon-kyun, the President of the Central Bank of the DPRK, Cooperation with International Organizations for Prevention from Money Laundering and Terrorist Financing.

“Establishment of the National System for Preventing from Illegal Acts”

By Kim Ji-young, reporter from Pyongyang

Kim Chon-kyun, the President of the Central Bank of the DPRK presented, at the interview with the Choson Sinbo, the opposite stance of North Korean government against money laundering and terrorist financing as follows.

“What cannot be allowed according to institutional characteristics”

– A letter from the president of the Central Bank of the DPRK that pledged to implement plans for action for prevention from money laundering and terrorist financing was submitted to Financial Action Task Force (FATF) on Jan 1st. How has the negotiation between North Korea and FATF proceeded?

The implementing recommendations of the plans for action we pledged this time were consented at the negotiation between North Korea and Asia/Pacific Group on Money Laundering in Cambodia on September 2014.

When looking into the recommendations, it included maintaining cooperative relations such as sharing data and proceeding cooperation with organizations, joining as a member state, devising a means to sanction and to punish on money laundering and terrorist financing, reinforcing the confirmation procedure of traders, establishing financing watching and information business system including reporting surreptitious trade, joining in international agreement, assessing loca, etc. These measurements are, in a word, that we should establish national system to punish severely illegal acts like internal/external money laundering and terrorist financing.

North Korea institutionally does not allow those illegal acts.

Long before such “international standard” appeared, North Korea already set legal, organizational measurement adequate for our society to prevent from money laundering –like acts. This is specifically described on our laws and those regulations have renewed according to the need for development in reality.

It is interesting that the head of the central bank is the point man for this operation because the DPRK’s central bank does not have the authority to hold foreign currency accounts–only accounts denominated in DPRK won. It seems to me that international money laundering should also be of concert to the Foreign Trade Bank, a sanctioned entity that is responsible for managing hard currency deposits in the DPRK.

UPDATE 2 (2015-1-24): According to the Pyongyang Times:

DPRK commits itself to anti-money laundering action plan

The Governor of the DPRK Central Bank on January 15 sent a letter to the Financial Action Task Force on Anti-Money Laundering, assuring it that the country would implement the Action Plan of International Standard for Anti-Money Laundering and Combating the Financing of Terrorism, a spokesman for the DPRK National Coordinating Committee on Anti-Money Laundering and Combating the Financing of Terrorism told KCNA on January 16.

He described this as a manifestation of the DPRK government’s political will based on its consistent stand to step up international cooperation in this field.

Recommendations of the action plan are legislative and organizational measures to criminalize and punish money laundering and financing of terrorism, and almost all of them have long been implemented in the DPRK to suit its actual conditions, according to the spokesman.

The DPRK will sincerely implement the action plan as it has pledged itself for the promotion of mutual understanding with member nations in the face of the obstructive moves of the US and some other countries that are reluctant to cooperate with the international organization, he stated.

He requested the organization to positively respond to the DPRK’s cooperative efforts as it assured in negotiations with the country.

UPDATE 1 (2014-10-24): FATF issues a public statement from Paris that includes the following:

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/FT) risks emanating from the jurisdictions.

Iran
Democratic People’s Republic of Korea (DPRK)

Democratic People’s Republic of Korea (DPRK)

Since June 2014, the DPRK has further engaged directly with the FATF and APG to discuss its AML/CFT deficiencies. The FATF urges the DPRK to continue its cooperation with the FATF and to provide a high-level political commitment to the action plan developed with the FATF.

The FATF remains concerned by the DPRK’s failure to address the significant deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime and the serious threat this poses to the integrity of the international financial system. The FATF urges the DPRK to immediately and meaningfully address its AML/CFT deficiencies.

The FATF reaffirms its 25 February 2011 call on its members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with the DPRK, including DPRK companies and financial institutions. In addition to enhanced scrutiny, the FATF further calls on its members and urges all jurisdictions to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism (ML/FT) risks emanating from the DPRK. Jurisdictions should also protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices, and take into account ML/FT risks when considering requests by DPRK financial institutions to open branches and subsidiaries in their jurisdiction.

Here is the web page for FATF. You can learn more about FATF here.

ORIGINAL POST (2014-7-19): North Korea joins OECD anti-money laundering group. According to the JoongAng Daily:

North Korea has joined the Asia Pacific Group on Money Laundering (APG), whose purpose is to prevent funding of terrorism and development of nuclear weapons.

Members of the APG unanimously decided to accept North Korea and Tuvalu as observers during its general meeting held in Macau yesterday.

APG is the Asia Pacific unit of the Financial Action Task Force under the Organization for Economic Cooperation and Development (OECD).

The Financial Action Task Force (FATF) has 41 member countries including the U.S., South Korea, China and Japan and observers include countries such as Germany, France and the U.K., as well as 27 international organizations such as the Asia Development Bank and World Bank.

Since North Korea has been accepted as an observer, it has to follow several rules including the prevention of money laundering, funding of terrorist organizations or actions, sharing its knowledge and experience and following global regulations and laws.

The APG will decide later whether to elevate North Korea from observer status to a member country once it evaluates Pyongyang based on its annual reports to the organization and visits by the representatives of the group over the next three years.

South Korea and many other members are trying to figure out the motive behind the unexpected move by Pyongyang, because North Korea was previously opposed to joining the APG.

“[North Korea’s motive] is a mystery to us,” said a high ranking government official, who requested anonymity. “We suspect that North Korea, while looking for ways to ease the international financial restrictions imposed on them, decided to show their efforts in improving their global image [by joining the APG].

“But since the lists that they need to follow are long, we will probably have wait and see how sincere and determined they are with their decision.”

In other words, it could be a facade as a way for North Korea to ease the sanctions imposed on it, since the possibility that Pyongyang will give up its nuclear ambitions is low.

The action is particularly suspicious because up until last year’s APG meeting held in Shanghai, North Korea refused to join the organization because of the rule requiring members and observers to follow global standards. North Korea at the time argued that it would join the APG only after the agreement to follow UN resolutions was taken out.

The resolutions include prevention of money laundering, nuclear terrorism and development of nuclear weapons, which is the opposite of the North Korean government’s goal of securing both economic growth and nuclear weapons.

But now, North Korea has agreed to follow all regulations presented by APG.

The tide seemed to have turned as financial sanctions imposed by the international community and led by the U.S. have intensified.

Pyongyang suffered heavily last year after the U.S. and China closed the accounts of the Foreign Trade Bank of North Korea, which was known as the money laundering window for Pyongyang. The money laundered through the trade bank is suspected of being used in funding the regime’s control over the country.

In May, the state-run Bank of China said it had notified the Foreign Trade Bank of North Korea that it was closing all of its accounts and suspending all financial transactions. It did not specify the number of accounts in the bank.

The move came as a shock considering China and North Korea’s strong ties. China was previously the lifeline of North Korea, whose economy has been heavily dependent on its close ally.

Last year wasn’t the first time that North Korea’s accounts have been shut down. In 2005, the U.S. froze North Korea’s accounts at Macau’s Banco Delta Asia, which was a heavy blow to Pyongyang’s ability to secure foreign capital.

The recent change of heart seems to have been triggered by a report by the U.S. State Department in May designating North Korea as a country that is non-cooperative against terror, citing its decision not to join either the FATF or APG.

Although suspicious, the South Korean government isn’t disapproving of the move by the North, as there are positive aspects such as better transparency of Pyongyang’s finances if it conforms to the APG’s regulations.

And if Pyongyang doesn’t follow the rules and loses its license as an observer, the sanctions against North Korea will further tighten.

“North Korean representatives, after their acceptance was approved [in Macau], stressed that they will work on following the APG’s international standards and our [South Korean] government has emphasized the importance of following the resolutions set by the United Nations Security Council,” said a government official.

Read the full story here:
North Korea joins OECD anti-money laundering group
JoongAng Daily
Jung Won-yeop and Park Jin-seok
2014-7-19

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Naguib Sawiris is a US citizen!

Wednesday, February 3rd, 2016

According to Finance Uncovered:

Naguib Sawiris is a multi-billionaire telecoms magnate. A truly global citizen, he was born a Coptic Christian in Egypt and educated in Europe. His business empire is controlled from a luxurious tower on the banks of the Nile, yet according to Companies House filings he is usually resident in the the UK, where amongst other things, he runs a hedge fund. As Sawiris confirmed during a recent case before the UK supreme court, he has US citizenship.

He is also deeply involved in global politics: a large donor to Mitt Romney’s failed presidential bid, a power broker in his native Egypt and a regular visitor to Davos. When trouble flared in Cairo after the overthrow of President Morsi, he was the then special envoy to the Middle East Tony Blair’s first port of call. That port being in San Tropez.

Sawiris’s fortune derives from managing the telecoms empire of his family’s business Orascom. Orascom Telecom Holdings was a global telecom player particularly in the developing world.

The company held licences across the globe, from Zimbabwe, Syria, Iraq, Italy and North Korea. When the majority of Orascom Telecom Holdings was sold to Russian telecom giant, Vimplecom in 2011 for $6.6bn, Koryolink, the North Korean cell phone network, was one of the few assets Sawiris held onto.

The North Korean adventure
After building telecoms networks in a number of challenging countries around the world, the Democratic People’s Republic of Korea (DPRK) must have seemed like the final frontier for Sawiris.

At some point before 2008 he was introduced to the opportunity by Ri Chol, who at the time was the North Korean permanent representative to the UN in Geneva. It has been suggested that in addition to his diplomatic duties, Chol was also responsible for managing Kim Jong Il’s private bank accounts in Europe.

In 2010 Ri Chol was recalled to North Korea to be vice chair of the DPRK’s committee of investment.

After the initial introduction, Sawiris visited the country several times to build relationships with the North Korean leadership. He has been photographed with Kim Jong Il. The vice premier of the DPRK cabinet was at Koryolink’s grand opening in Pyongyang.

“It’s personal you know, I went drinking with these guys at night, we made jokes, we get along well, and I’ve done nice stuff there,” Sawiris told Euromoney in 2011. “I’ve repaired their tramways, I’ve recovered their hotel, donated medicine when they had the floods.”

The hotel mentioned by Sawiris is Pyongyang’s Ryugyong Hotel. When construction began in 1987, it was the first building outside the United States of over 100 stories. Originally intended to be a display of North Korea’s might, the giant windowless concrete pyramid became a national embarrassment for the best part of two decades after building stopped in 1992. It resumed in 2008 by Orascom and the exterior has now been finished, although reports from the country suggest it is still an empty shell. Documents from Orascom indicate that the company spent over $30m on the hotel.

A profitable enterprise
The effort Sawiris made to gain access to the North Korean market seems to be paying off. Koryolink is making a lot of money in North Korea. The 2014 annual accounts of Orascom Telecom Media and Technology Holdings (OTMT) show that the company made revenues in excess of $340m in its North Korea mobile phone (GSM) segment.

A Finance Uncovered analysis of Orascom Telecom’s 2012 annual accounts shows that the company’s two million North Korean subscribers – equivalent to 10% of the country’s population – made average revenue per user of $13 a month. These are huge revenues in a country where wages are very low. The best paid workers are said to be paid around $70 a month, according to recent reports. In 2013 average earnings were thought to be around $25-30 a month.

Recent news reports indicate that the company is having difficulty repatriating profits, and that the North Korean regime may have even appropriated the company. This is denied by OTMT.

How Koryolink manages to be so profitable is a mystery. Networks in other parts of OTMT’s former empire are far less lucrative. Djezzy, the phone network Sawiris set up in Algeria achieves an average revenue per user of $9 according to the 2012 annual report of Global Telecom Holdings despite Algeria having a GDP per capita more than four times North Korea’s. In Pakistan, Mobilink, another former Sawiris company with 36.1m subscribers generates $2.50 per user. In Bangladesh it is $1.70 per user.

Sawiris splits the substantial profits of the cell phone business with the North Korean regime, who also have a stake in the business. According to some analysts the North Korean Regime has earned between $400m-$600m from the cell phone industry up to early 2013.

Orabank
Cell phones are not Sawiris’s only business in North Korea. Buried in the list of subsidiaries in the Orascom Telecom and Media Holdings accounts is a reference to another enterprise, Orabank. This bank is not mentioned anywhere else in the annual report.

According to a report from Bloomberg, Orabank was opened the day after Koryolink in a ceremony in Pyongyang. An organisational chart filed with the SEC at the time of the Vimplecom merger in 2011 shows that Ora Bank NK is a subsidiary of Oracap Far East, of Malta.

With the huge difficulty faced by companies moving money into and out of North Korea, it is not unusual for a company operating in the country to set up their own bank. But these tend to be “hotel room operations” – nothing more than a telex machine in a hotel room.

Orascom’s accounts suggest that Orabank is a much more substantial enterprise. The first quarter report of 2009 from Orascom Telecom Holdings shows that Oracap Far East paid $1m for a licence to operate a bank, had $180,000 in cash and had committed to invest $127m.

The 2010 annual accounts of Orascom Telecom Holdings shows that the company wrote off $48m that it had invested in Orabank.

What exactly Orabank does is difficult to know. Other than these brief snapshots, there is no mention of Orabank’s revenues or business activities in Orascom annual reports.

Sensitive links
Sawiris’s various businesses in North Korea may raise some eyebrows in Washington DC. Not only is Sawiris a political mover and shaker, documents found by Finance Uncovered show that Koryolink and Orabank has a link to the US defence industry.

Sawiris’s North Korean businesses are owned by OTMT in Egypt. The majority of OTMT is owned by OTMTI in Luxembourg. According to a Federal Communications Commission application form submitted by another Sawiris company, Accelero Capital Investment Holdings, OTMTI is in turn is owned by companies based in the Cayman Islands. The eventual owner is the Marchmont Trust, a Jersey family trust. The trustee, who looks after the Trust’s assets is the February Private Trust Company, which is based in the UK Crown Dependency and tax haven, Jersey.

As of 2012, one of the five directors of the February Private Trust Company was Kevin Struve. At the same time, Struve was also a director of Contrack International, now Contrack Watts, a major US defence contractor and another Sawiris family owned business. As of last year, the latest data available at the Virginia SEC, Mr Struve is still listed as a director of Contrack.

We tried to contact Struve to ask him whether it is appropriate for the director of a US defence contractor to control businesses with high level links to the North Korean regime. Struve did not respond to our questions.

Sanctions
Sawiris’s dealings with the North Korean regime raise issues with regards to sanctions. Few people we spoke to, including senior US officials, appeared to know that Sawiris was a US citizen, and so subject to the US sanctions regime.

US sanctions prohibit any US citizens from dealing with a person or entity appearing on the sanctions list. A spokesperson for the US Treasury, although refusing to comment on this case, said that the prohibition is drawn purposefully broad in order to cover a variety of interactions.

According to official North Korean media reports, Orabank is a joint venture with the North Korean Foreign Trade Bank (FTB). The FTB was designated by the Secretary to the Treasury Jacob Lew in 2013 as “a key financial node in North Korea’s WMD apparatus”.

Sanctions only apply to designated entities after entities are placed on the sanctions list. If Sawiris and his companies stopped dealing with the Foreign Trade Bank after it was placed on the sanctions list, then it has complied with the law.

But Orascom Telecom and Media Technology Holdings (which Naguib Sawiris is the CEO of appears to openly acknowledge a risk that business may be harmed by “enhanced enforcement” of sanctions. Buried in the small print of the OTMT annual report is the following disclaimer (emphasis added):

“There can be no assurance that if international sanctions are changed or subject to enhanced enforcement, the Company’s operating subsidiary in DPRK will be able to finance its operations transfer funds to and from the company or operate its mobile phone network in DPRK.”

We put it to Sawiris that the disclaimer in his company’s annual report was akin to an admission that the company may be breaking sanctions in North Korea. We also asked whether he had ever dealt with people or companies on the US Department of Treasury Sanctions List. We were told by a spokesperson that Mr Sawiris does not comment on these issues as a matter of policy.

It is unclear if Sawiris or OTMT has broken US sanctions. But the facts we have uncovered do raise serious questions.

For several years Sawiris has been free to operate a bank in North Korea, a joint venture with a financial institution which later was considered by the US Treasury to be financing the country’s WMD programme. He has shared the profits of his burgeoning mobile phone business with the regime, and appears to have given tens of millions of dollars to their projects.

All this was done as other Sawiris family companies received hundreds of millions of dollars from the US Department of Defense.

As world leaders around the world consider how sanctions against North Korea should be toughened in the wake of their latest nuclear test, perhaps next time they are in Davos, they should ask their old friend Naguib.

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Korean-American Sharing Movement donates to the DPRK

Monday, December 28th, 2015

According to the Baptist Standard:

A Korean Texas Baptist minister delivered two tons of noodles, 10 solar panels, two diesel generators and other supplies to a hospital in North Korea between Thanksgiving and Christmas.

Yoo Yoon, director of the Korean-American Sharing Movement of Dallas, also took 350 pairs of winter socks, two freezers, six pairs of tractor tires and three sewing machines to three schools for orphans in Kwangwon province.

Yoon has traveled to North Korea more than two-dozen times in the last 20 years, including four trips in 2015. He typically delivers corn and wheat noodles to schools, orphanages and hospitals. Donors have included Texas Baptist Men and several Baptist General Convention of Texas-affiliated churches, and Baylor Scott & White Health has contributed medical equipment.

In September, the North Korean government denied Yoon permission to distribute food to orphans, due to a change in policy. However, he provided food for the hospital on his most recent trip, and he brought other supplies to the medical center and the schools for orphans.

“I have learned to adjust myself to whatever circumstances through 20 years of North Korea missions,” said Yoon, former Korean field consultant with the Cooperative Baptist Fellowship.

In September 2014, his daughter, Sara Yoon, an ophthalmologist, examined patients and consulted with doctors at the hospital in Wonsan City. On the most recent trip to North Korea, her father delivered batteries and bulbs for scopes and other equipment she purchased for the hospital’s ophthalmology department. He also distributed Christmas presents at the hospital.

“The Lord led me to tell them what Christmas is,” Yoon recalled. “So, I handed out 62 Christmas gifts to 62 people, letting them know it is a season of accepting a gift, since God sent his Son to forgive our sins.”

Read the full story here:
Texas Baptist delivers food and equipment to North Korean hospital
Baptist Standard
Ken Camp
2015-12-28

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US increases sactions on North Korea

Wednesday, December 9th, 2015

According to Yonhap:

The United States slapped sanctions Tuesday on North Korea’s “strategic rocket force” and others for weapons proliferation amid growing concern about the communist nation’s ballistic missile capabilities.

The rocket force, which is charged with overseeing the North’s ballistic missile program, was accused of “engaging in activities that have materially contributed to the proliferation of weapons of mass destruction or their means of delivery.”

“The Strategic Force conducted multiple ballistic missile launches during 2014. Specifically, it conducted the launches of two short-range Scud-class ballistic missiles on March 3, test-fired two medium-range No Dong-class ballistic missiles on March 26, and conducted the launch of a short-range ballistic missile on July 26,” the Treasury Department said in a statement on its website.

“The launches of these missiles materially contributed to North Korea’s ballistic missile program,” it said.

Technically, it is the State Department that blacklisted the rocket force, though the announcement was included in the Treasury Department release.

Also sanctioned were six individuals and three shipping firms.

The individuals were Choe Song-il and Kim Jung-jong, Tanchon Commercial Bank officials based in Vietnam; Jang Bom-su and Jon Myong-guk, Tanchon Commercial Bank officials in Syria; Ko Tae-hun, a Tanchon Commercial Bank representative; and Kim Kyong-nam, an official of the North’s Foreign Trade Bank in Russia.

The three firms were Haejin, Pyongjin and Yongjin ship management firms.

“North Korea threatens international peace and security by expanding its nuclear program and continuing its proliferation of weapons of mass destruction and conventional weapons,” said Acting Under Secretary for Terrorism and Financial Intelligence Adam J. Szubin in the statement.

“Treasury is committed to exposing North Korea’s global proliferation network and excluding these facilitators from the international financial system,” he said.

Under the sanctions, any property or interest in property of the designated persons in the possession of U.S. persons or within U.S. jurisdiction must be frozen and transactions by U.S. persons involving the designated persons are generally prohibited, it said.

But the measures are seen only as symbolic as those sanctioned are not believed to be holding any assets in the U.S. or engaged in any dealings with U.S. persons.

Read the full story here:
U.S. sanctions N. Korea’s strategic rocket force
Yonahp
2015-12-9

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NCNK on pending sanctions legislation

Tuesday, October 27th, 2015

The National Committee on North Korea (NCNA) has published a quick summary piece on sanctions legislation under deliberation in the US Congress. According to NCNK’s web page:

There are currently three related North Korea sanctions bills under consideration in Congress. H.R. 757, introduced to the House by Rep. Ed Royce in February 2015, is broadly similar to a bill that passed the House in the last session of Congress, but wasn’t acted upon by the Senate. In the Senate, S. 1747 was introduced by Senators Robert Menendez and Lindsay Graham in July of this year. Additionally, Senators Cory Gardner, Marco Rubio, and James Risch are co-sponsors of the recently-introduced bill S. 2144.

Although the three sanctions bills are generally similar in scope, there are several key differences among them, including their potential impact on humanitarian operations; the level of discretion the Executive Branch would have in applying sanctions; and language on sanctions targeting North Korea’s mineral industry.

NCNK’s new Issue Brief gives a detailed side-by-side summary of these three bills, noting key provisions and differences between the three.

You can download the Issue Brief here (PDF).

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North Korean defectors in the USA

Tuesday, October 13th, 2015

According to UPI:

North Koreans, 186 in total, have resettled in the United States since 2006, two years after the North Korean Human Rights Act of 2004 was signed into law by President George W. Bush. Radio Free Asia reported on Monday the refugees now live in 18 states, and 26 of the 186 settled in Kentucky.

Next, California is home to 25 recent arrivals, followed by New York at 19, Colorado, 17, with Arizona, Virginia, each home to 15 new North Korean defectors. The remaining population is divided among Washington, Idaho, Texas, Indiana, Tennessee, Georgia, Florida, North Carolina, Maryland and Massachusetts, each state home to less than 10 North Koreans. In 2014, the United States granted asylum to 15 North Koreans, and five resettled in California and three in Utah. Others have taken up residence in Colorado, Illinois, Kentucky and Georgia.

Read the full story here:
More North Korean refugees in the U.S. calling the ‘Bluegrass State’ home
UPI
Elizabeth Shim
2015-10-13

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