The U.S. Department of State, in conjunction with the U.S. Department of the Treasury and the U.S. Department of Homeland Security, is issuing an advisory on sanction evasion tactics used by North Korean businesses. The goal of this advisory is to assist businesses in understanding the compliance risks with the U.S. or United Nations sanctions and the potential ramifications of violating such sanctions. This advisory will also help companies in complying with the requirements of Title III, the Korean Interdiction and Modernization of Sanctions Act of the Countering America’s Adversaries Through Sanctions Act (CAATSA).
This advisory does not impose any new sanctions on North Korea and the United States remains committed to the joint statement that was signed on June 12 in Singapore. Previous sanctions will continue to be enforced and remain in effect until further notice.
There are multiple U.S. and UN sanctions that impose restrictions on trade with North Korea and utilizing North Korean workers. The two main risks associated with the sanctions are: (1) unintentionally sourcing goods, services, or technology from North Korea, and (2) the use of North Korean citizens or nationals in a company’s supply chain that generates revenue for the North Korean government. This advisory also provides due diligence references for businesses.
Through this advisory, businesses should have an understanding of these sanction evasion tactics and hopefully can start implementing effective due diligence policies, procedures, and internal controls to ensure compliance with all legal requirements throughout their entire supply chain.
This advisory will be published in English, Chinese, French, Korean, Russian, and Spanish.