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US Treasury Issues New Sanctions in Response to North Korea Missile Launches

Sanctions Latest News

The US Treasury has sanctioned two Russian banks, one individual, and a trading company for working with the Democratic People’s Republic of Korea’s (DPRK) weapons of mass destruction (WMD) and ballistic missile programs. The new sanctions follow the launch of an intercontinental ballistic missile and two short-range missiles by North Korea on May 24 2022, bringing the total number of ballistic missiles launched by the DPRK this year to 23. Each launch violated multiple United Nations Security Council resolutions (UNSCRs).

The Treasury press release highlights that the sanctions have been imposed in “the spirit of the Otto Warmbier North Korea Nuclear Sanctions Act of 2019”, which imposes unilateral sanctions on financial institutions related to North Korea. 

Targeted entities 

Far Eastern Bank and Bank Sputnik were designated by the Office of Foreign Assets Control (OFAC) for providing material support to Air Koryo, North Korea’s national airline, and for conducting transactions on behalf of DPRK entities. Bank Sputnik is North Korea’s primary foreign exchange bank and has been subject to UN sanctions and US economic penalties since 2017.

North Korea’s use of regional proxies to bypass international sanctions also remains a national security threat. According to OFAC, Belarus-based Jong Yong Nam was sanctioned due to his involvement with DPRK’s Second Academy of Natural Sciences, an organization responsible for researching and developing the country’s ballistic missile and WMD programs.

The Air Koryo Trading Corporation is also being sanctioned for allegedly supporting Pyongyang’s Ministry of Rocket Industry. According to the Treasury, the ministry planned to utilize the trading company “to acquire various electrical components and dual-use goods, including transistors and hydraulic system components.” 

DPRK sanctions

The sanctions imposed on North Korea as a result of its WMD program are wide-ranging. They cover all financial transactions and investments, embargoes on arms and luxury goods, as well as stringent import and export controls on an expanding list of items, including precious metals, machinery, electronics, coal, iron, lead, oil and gas, textiles and food. The sanctions have also placed travel and work restrictions on North Korean citizens, and rights of boarding on North Korean ships.

Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian Nelson said, “the Treasury is targeting supporters of the DPRK’s WMD and ballistic missile programs, as well as foreign financial institutions that have knowingly provided significant financial services to the DPRK government.”

“The United States will continue to implement and enforce existing sanctions while urging the DPRK to return to a diplomatic path and abandon its pursuit of weapons of mass destruction and ballistic missiles,” he added.

Key takeaways

While issues such as cyber warfare have been a recent focus of DPRK sanctions, these measures are a reminder that “traditional” WMD proliferation remains a key strategic threat. To remain abreast of North Korean proliferation financing techniques, compliance staff should ensure they are familiar with the latest annual UN Panel of Expert report on North Korea that is published annually, which provides an important overview of the latest geopolitical challenges related to the country.  

The section titled “Finance” not only covers the illicit generation of revenue through cyber activities but also notes a case in which the US-based subsidiary of a Canadian bank was penalized for processing 1,479 transactions totaling over $382,000 to the benefit of the DPRK. 

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Originally published June 1, 2022, updated June 1, 2022

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