July 23, 2018
The U.S. Department of State, with the U.S. Department of the Treasury and the U.S. Department of Homeland Security, is issuing this advisory to highlight the sanctions evasion tactics used by North Korea that could expose businesses – including manufacturers, buyers, and service providers – to sanctions compliance risks under U.S. or United Nations sanctions authorities. This advisory also assists businesses in complying with the requirements under 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 new sanctions on North Korea. The United States remains committed to the Joint Statement that President Trump and Chairman Kim signed June 12 in Singapore. As the President has said, sanctions will be enforced and remain in effect. The international community cannot let up on pressure until the DPRK denuclearizes.
Multiple U.S. and UN sanctions impose restrictions on trade with North Korea and the use of North Korean labor, potentially impacting a company’s supply chain operations. The two primary sanctions compliance risks are: (1) inadvertent sourcing of goods, services, or technology from North Korea, and (2) the presence of North Korean citizens or nationals in those supply chains, whose labor generates revenue for the North Korean government. This advisory also provides due diligence references for businesses.
Businesses should be aware of these deceptive practices in order to implement effective due diligence policies, procedures, and internal controls to ensure compliance with applicable legal requirements across their entire supply chain.
The advisory will be published in English, Chinese, French, Korean, Russian, and Spanish.