North Korean Sanctions Summary - January 2 (with Turza Comment)

On January 2, 2015, in response to North Korea's "ongoing provocative, destabilizing, and repressive actions and policies, particularly its destructive and coercive cyber attack on Sony Pictures Entertainment," President Obama signed a new Executive Order imposing additional sanctions against the Government of North Korea and the Workers' Party of Korea, North Korea's ruling party.

The Executive Order authorizes the Treasury Department, in consultation with the State Department, to designate individuals or entities with ties to the North Korean government or the Workers' Party of Korea for inclusion on the Office of Foreign Assets Control's ("OFAC") Specially Designated Nationals ("SDN") List. President Obama's Executive Order "escalates financial pressure" on North Korea by denying those "designated persons access to the U.S. financial system and prohibit[ing] U.S. persons from engaging in transactions or dealing with" those designated persons. The Executive Order also denies any such designated persons entry into the United States.

The Treasury Department accompanied the announcement of the Executive Order by designating three entities and ten individuals for sanctioning. The three entities – the Reconnaissance General Bureau, the Korea Mining Development Trading Corporation ("KOMID"), and Korea Tangun Trading Corporation – were designated for either their involvement in North Korean cyber operations (the RGB) or their involvement in North Korea's weapons proliferation activities (KOMID and the Korea Tangun Trading Corporation). Eight of the ten designated individuals were identified as KOMID representatives or officials.

Turza Comment: Given North Korea's status as one of the most sanctioned countries in the world and its dearth of connections to the international economic system, the Obama Administration is limited in what it can do to apply additional financial pressure on Kim Jong Un and his cronies that oversee North Korea. Nevertheless, OFAC's designations show that North Korea continues to possess some avenues by which it can obtain much needed foreign currency, especially through KOMID. Today's Executive Order aims at cutting off those approaches and further tightening the U.S. and global sanctions regime against North Korea.

See also: Sanctions Specialty Page (available to Cabinet subscribers only).