Multiple U.S. government departments issued a North Korea sanctions and enforcement advisory notice on Monday, warning businesses and individuals of the continued sanctions risks involving DPRK entities and activities.
The publication of the advisory notice comes three days after U.S. Secretary of State Mike Pompeo visited the UN Security Council (UNSC), where he called for the strict maintenance of sanctions against the DPRK amid current diplomatic engagement.
The purpose of the advisory is to “highlight sanctions evasions tactics used by North Korea that could expose businesses – including manufacturers, buyers, and service providers – to sanctions compliance risks under U.S. and/or United Nations sanctions authorities,” it reads.
“Businesses should be aware of deceptive practices employed by North Korea in order to implement effective due diligence policies, procedures, and internal controls to ensure compliance with applicable legal requirements across their entire supply chains,” it added.
The U.S. Department of State, the Department of the Treasury’s Office of Foreign Assets Control (OFAC), and the Department of Homeland Security’s (DHS) co-authored the advisory.
The notice identifies what the government deemed as two primary risks to businesses, which are the “inadvertent sourcing of goods, services, or technology from North Korea” and “the presence of North Korean citizens or nationals in companies’ supply chains, whose labor generates revenue for the North Korean government.”
The notice warned business using third-country suppliers that such entities could be subcontracting manufacturing tasks to North Korean factories without them knowing.
The notice adds that such goods, services, and technologies manufactured in North Korea may be mislabelled – such as being listed as “Made in China” – in order to mask their origins and the DPRK connections.
It also warned businesses to be aware of certain indicators of DPRK involvement such as lower than average prices being offered for raw materials or goods, a practice previously employed by the DPRK to sell coal and other goods.
Within the annexes of the advisory, an extensive list of identified North Korean joint ventures is also provided. Joint ventures are prohibited from operating under current UNSC resolutions.
The notice also warns of obfuscated North Korean IT services and products being sold abroad – the subject of a recent report by the James Martin Center for Nonproliferation Studies.
The risk of inadvertently using North Korean labor overseas is a major theme of the advisory, which identified DPRK involvement in sectors “including but not limited to apparel, construction, footwear manufacturing, hospitality, IT services, logging, medical, pharmaceuticals, restaurant, seafood processing, textiles, and shipbuilding.”
“The U.S. government is focusing its disruption efforts on North Korean citizens or nationals whose labor generates revenue for the North Korean government,” it reads.
According to UNSC sanctions, member states are prohibited from issuing any new work permits for North Korean laborers in their jurisdictions and all North Korean workers are to be sent back to the DPRK by December 22, 2019.
Monday’s advisory specifically mentioned that China and Russia host such labor at higher rates than “all other countries and jurisdictions combined” and identified 40 other countries where the practice takes place. Russia is mentioned a total of six times in the 17-page advisory while the words “China” or “Chinese” are present 14 times.
China and Russia recently blocked a U.S. request made at the UNSC to stop oil transfers to North Korea after it presented evidence that North Korea had exceeded its importation quota for oil products under UNSC resolutions for the year already.
While the advisory covers aspects of both UNSC and U.S. sanctions, the notice specifically warns of penalties to persons violating OFAC measures specifically.
“Persons who violate U.S. sanctions with respect to North Korea can be subject to civil monetary penalties equal to the greater of twice the value of the underlying transaction or $295,141 per violation, referred for criminal prosecution, or both,” it reads.
It also warned that the DHS’ Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE) would block any goods made involving North Korean labor from entering the country and may initiate criminal proceedings against those involved in the exportation of such goods to America.
While the last few years have witnessed North Korea’s continued pursuit of nuclear weapons and the expansion of the sanctions regime against the country, 2018 has been a year marked by diplomatic engagement. Amid the detente, both China and Russia have publicly called for a review of UNSC resolutions and their potential easing.
On Monday, South Korean foreign minister Kang Kyung-wha also reportedly said that the ROK was seeking some exemptions to the sanctions, in order to better facilitate inter-Korean cooperation projects.
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Featured Image: The US Treasury Department by romanboed on 2014-07-29 16:09:37