New UN sanctions target North Korea’s exports of strategic commodities
International Law Firm CLYDE & CO has recently produced the following bulletin concerning new UN Sanctions against North Korea.
On 5 August 2017 the United Nations Security Council unanimously approved a significant expansion of the UN sanctions regime against North Korea, in response to North Korea’s recent ballistic missile tests. Resolution 2371 (2017) (the Resolution) targets key elements of North Korea’s economy, prohibiting North Korea’s exports of strategic commodities, its participation in joint ventures with foreign persons and expands the scope of asset freezes and travel bans. Wide ranging sectoral sanctions in the Resolution prohibit North Korea’s export of key foreign currency earning commodities such as coal, iron ore, seafood, lead and lead ore to other countries. Foreign parties may still perform existing written contracts concluded prior to the resolution for up to 30 days, but the relevant UN committee monitoring the implementation of sanctions against North Korea must be notified. There is also an exception for coal originating outside North Korea which is exported from the port of Rajin (Rason), which is used for exports of Russian coal to South Korea. The committee is also empowered to expand transportation sanctions against North Korea, which already prohibit the chartering of North Korean vessels, by designating vessels for which it has information indicating they have been related to activities prohibited by UN security council resolutions against North Korea. Such designations would prohibit those vessels from calling at ports of other UN member states. Financial sanctions against North Korea are expanded by restricting the opening of new joint ventures of cooperative entities with North Korean entities or individuals, or the expansion of existing joint ventures through additional investments. The Security Council has confirmed that existing financial sanctions in resolution 2094 (2013), prohibiting the provision of financial services that could contribute to North Korea’s nuclear or ballistic missile program, apply to the clearing of funds through member states’ territories. The Resolution also adds a further nine individuals and four entities to the existing lists of person and entities subject to asset freezes and travel bans under existing UN sanctions. These new prohibitions on exports of commodities that are strategic to North Korea’s economy are expected to restrict North Korea’s ability to earn up to US$ 1 billion in foreign currency. All UN member states are now obliged to give effect to the prohibitions in the Resolution pursuant to Article 25 of the UN Charter and must report to the Security Council within 90 days on the concrete measures they have taken in order to implement them. North Korea is already subject to UN sanctions which target its nuclear and ballistic missile activities, impose arms embargos, asset freezes and travel bans, and restrict its imports of luxury goods. The EU maintains its own sanctions regime against North Korea, pursuant to Regulation 329/2007, which goes beyond its minimum UN charter obligations. It remains to be seen whether Regulation 329/2007 will be expanded again beyond the minimum requirements of the Resolution. Similarly the US maintains its own sanctions regime against North Korea which goes beyond the minimum UN requirements, preventing US persons from dealing with North Korea in most circumstances.
Assureds are asked contact the Club for any additional information concerning this matter.