Sanctions Notice - North Korea

A number of amendments have been made to the sanctions regime imposed by Council Regulation (EC) No 329/2007, as implemented in the Bailiwick by the North Korea (Restrictive Measures) (Guernsey) Ordinance, 2007, the North Korea (Restrictive Measures) (Alderney) Ordinance, 2007, and the North Korea (Restrictive Measures) (Sark) Ordinance, 2007. These amendments are automatically and immediately effective in the Bailiwick.

New Restrictions

Additional financial restrictions have been introduced under Regulation (EU) No 2016/682 and Regulation (EU) No 2016/841.

Regulation (EU) No 2016/682 introduces prohibitions on new acquisitions of ownership interests in a North Korea or North Korean owned/controlled entity, joint ventures with designated persons, and financial support for trade with North Korea. It is also prohibited to make funds or economic resources available to the Government of North Korea, the Worker’s Party of Korea, or any person acting on their direction or behalf, if HM Treasury has determined that to do so would contribute to North Korea’s illicit programmes.

There is now also an obligation to terminate existing joint ventures, ownership interests and correspondent banking relationships with North Korea’s banks as well as to close existing branches, subsidiaries or banking accounts in North Korea if it has been determined by the Policy and Resources Committee that they could contribute to North Korea's illicit programmes.

In addition, credit and financial institutions must report to the Policy and Resources Committee any suspicion that the operation of any account or office might contribute to North Korea’s illicit programmes.

As well as the new financial restrictions, the Regulation includes a ban on importing coal, iron and iron ore from North Korea. The Regulation is available here: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2016.117.01.0001.01.ENG&toc=OJ:L:2016:117:TOC

Regulation (EU) No 2016/841 introduces prohibitions on the transfer of funds to and from North Korea unless the funds are for a specific purpose as listed in the Regulation or on the transfer of any funds over EUR 15,000 without specific authorisation from the Policy and Resources Committee. It is also prohibited to provide financial support for trade with North Korea or to accept or approve investment in any commercial activity as detailed in the Regulation. The Regulation is available here: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2016.141.01.0036.01.ENG&toc=OJ:L:2016:141:TOC

Changes to Listings

Under Commission Implementing Regulation (EU) No 2016/659, one entity has been added to the list of persons subject to an asset freeze and related financial prohibitions, one entity has been removed from the list and the grounds for listing in respect of six individuals on the list have been amended. The Implementing Regulation is available here http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2016.114.01.0009.01.ENG&toc=OJ:L:2016:114:TOC

Under Commission Implementing Regulation (EU) No 2016/780, eighteen individuals and one entity have been added to the list of persons subject to an asset freeze and related financial prohibitions. The Implementing Regulation is available here: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2016.131.01.0055.01.ENG&toc=OJ:L:2016:131:TOC

It is subject to a correction which is available here: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016R0780R(01)&from=EN

MEASURES WHICH SHOULD BE TAKEN

All businesses must familiarise themselves with the legislation and check whether they have any kind of relationship that may relate to prohibited activity. They must also check whether they maintain any accounts or otherwise have any kind of relationship with any natural or legal person, entity or body designated under the legislation and treat any accounts, funds or economic resources belonging to, owned, held or controlled by a designated person, entity or body as frozen with immediate effect if this is not already the case. Businesses must report any findings to the Policy and Resources Committee immediately. Businesses must also refrain from making any funds or economic resources available directly or indirectly to or for the benefit of any designated person, entity or body other than transactions that come within a permitted derogation and have been authorised by the Policy and Resources Committee.

The information referred to above is required by the Policy and Resources Committee in the exercise of its powers under the Schedule to each of the Ordinances listed above.

Any information or queries should be sent to [email protected] with the subject line “North Korea”.

Further information on the effect of asset freezes and related issues including licences is available on the States of Guernsey website at http://www.gov.gg/sanctions