By Lisa Collins –
Source: Cocoabiscuit’s flickr photostream, used under a creative commons license.
On February 12, Congress passed the “North Korea Sanctions and Policy Enhancement Act” (H.R. 757). Early last month, the bill was introduced and passed in the House of Representatives (418-2). The Senate went on to approve the bill (96-0) after an amendment and it was sent back to the House for a final vote. House members overwhelmingly voted (408-2) to pass the amended bill. H.R. 757 will now be sent to President Obama for signing.
It appears that North Korea’s fourth nuclear test and recent satellite launch have helped forge strong bipartisan consensus on the bill. The bill will likely become law soon as both Eric Schultz, White House spokesperson, and Ben Rhodes, deputy national security advisor to the White House, have said that the President is not expected to veto the bill.
Q1: What does this bill do?
This bill sharpens and strengthens the U.S. sanctions regime against North Korea by making it mandatory for the President to investigate and designate persons/entities for sanctioned activities. Previous executive orders, and other pieces of congressional legislation, covered many of the sanctioned activities contained in H.R. 757. However, sanctions designations were largely discretionary in the hands of the President, State Department, and Treasury Department.
The bill also now covers some activity not targeted for sanctions before, such as North Korea’s metal and coal exports, and gives the U.S. government greater tools to implement so-called secondary sanctions. Particularly, secondary financial sanctions can be imposed against persons and entities that facilitate North Korea’s illicit activities. Since North Korean entities are often difficult to sanction directly, this could be a more effective way to cut off North Korea’s third country support networks, streams of foreign revenue, and supply chains.
Q2: What are the key provisions of the bill?
Key provisions of the bill would impose mandatory targeted sanctions against persons/entities that engage in nuclear and ballistic missile proliferation activities, import/export of related WMD materials, arms trade, and imports of luxury goods into the North. It would also target illicit activities such as money laundering, counterfeit goods manufacturing, drug trafficking, and bulk cash smuggling. And it imposes sanctions against entities that carry out significant activities that undermine cybersecurity, censorship and human rights violations, and deal in North Korean metals and products tied to WMD activities, internal repression, and prison/forced labor.
The provisions on human rights and cyber activities are significant because although Executive Order 13687 had previously provided legal authority for those sanctions, the government had not yet designated any entities or persons under the executive order. Granting authority for curbing North Korea’s mineral and metal trade is also a significant expansion into the realm of commodity sanctions. The bill would also strengthen transportation and shipping sanctions against North Korea by enhancing inspection requirements and encourages trilateral cooperation between the U.S., South Korea, and Japan on North Korea policy. Lastly, H.R. 757 requires the U.S. government to come up with a comprehensive strategy to promote North Korean human rights. This would include reports on North Korean prison camps and diplomatic efforts to address the issues of forced labor, trafficking, and repatriation of North Korean citizens from third party countries.
Q3: How are the sanctions different from what was previously imposed?
The U.S. sanctions regime for North Korea already currently consists of sanctions that prohibit and punish nuclear proliferation activities, limit arms sales and transfers, and curtail imports and exports to and from the DPRK. Additional sanctions also impose asset freezes, travel bans, and limited financial sanctions on entities/persons that perpetrate these and other illegal activities. The “North Korea Sanctions and Policy Enhancement Act” would expand the secondary financial sanctions and trade sanctions imposed on the DPRK and it would also impose similar provisions as previous sanctions that were lifted.
In 2008, as part of a comprehensive diplomatic deal with North Korea, a few sanctions provisions that previously applied to North Korea were lifted. These included: 1) provisions of the Trading with the Enemy Act that applied to North Korea; and 2) listing of North Korea as a State Sponsor of Terrorism (SSOT). Many of the sanctions that related to export/import controls and WMD proliferation activities are either covered by or have been incorporated into other statutes or executive orders. However, financial sanctions which prohibit direct financial transactions between U.S. persons and the government of North Korea or punish third party enablers of North Korea’s illicit activities were not adequately enforced through other pieces of legislation and executive orders. H.R. 757 would help correct this and would help U.S. sanctions, particularly financial sanctions against North Korea, have greater effectiveness. This would be done by targeting third country enablers or financial institutions that assist North Korea in accumulating and transferring funds back to Pyongyang to support the regime’s illegal activities.
Ms. Lisa Collins is a fellow with the Korea Chair at CSIS. Her research interests include U.S.-ROK relations, nuclear nonproliferation and disarmament, human rights and refugee law, transitional justice, Northeast Asian security, and the intersection between international law and international relations. This post appeared as a CSIS Critical Questions here.
