North Korea, officially known as the Democratic People's Republic of Korea, with a population of over 25 million, North Korea is one of the most isolated and secretive countries in the world. Despite its relative obscurity, the country has been a major focus of international attention due to its controversial nuclear weapons program and its human rights record. Despite the recent diplomatic efforts aimed at improving relations with the international community, North Korea remains one of the world's most repressive regimes, with strict control over the media and limited access to the outside world. This article will examine the history of sanctions, and the current state of North Korea, providing a comprehensive overview of this mysterious and enigmatic country's AML industry.
Sanctions on North Korea
Sanctions on North Korea have been put in place by various countries and international organizations, including the United Nations, as a way of applying pressure on the North Korean government to comply with non-proliferation agreements and disarmament obligations. One of the primary areas where sanctions have been implemented is in the realm of financial transactions. The international community has imposed sanctions on North Korean banks, businesses, and individuals to limit their access to the global financial system and prevent the North Korean government from accessing the proceeds of its illegal activities.
The implementation of these sanctions has made it more difficult for North Korean entities to access the global financial system and conduct business with the rest of the world. This has had a significant impact on the North Korean economy and has increased the pressure on the North Korean government to change its behavior and comply with international norms and obligations. However, the effectiveness of these sanctions is often debated, as North Korea is known for its ability to evade sanctions and access the global financial system through a variety of means, including the use of front companies and shell corporations, as well as the exploitation of loopholes in the international sanctions regime.
UN has played a significant role in imposing AML and CFT sanctions on North Korea, in response to the country's nuclear weapons and missile programs. The first sanctions on North Korea were imposed in 2006, in response to the country's first nuclear test. These initial sanctions aimed to limit North Korea's access to materials and technology that could be used to support its nuclear weapons program. Over the following years, the UN imposed additional rounds of sanctions aimed at tightening the restrictions on the country and limiting its ability to access the international financial system.
One of the key tools used by the UN in its sanctions regime against North Korea is the Financial Sanctions Regime. This regime includes measures aimed at restricting North Korea's access to the international financial system, including measures such as asset freezes, travel bans, and arms embargoes. The Financial Sanctions Regime is intended to prevent North Korea from accessing the resources and funding it needs to support its nuclear weapons and missile programs.
In recent years, the UN has also imposed sanctions aimed at disrupting North Korea's access to the international banking system. These measures include the freezing of North Korean assets held in foreign banks and the imposition of restrictions on North Korean banks' ability to conduct transactions with foreign banks. These sanctions have had a significant impact on North Korea's access to the international financial system, making it more difficult for the country to obtain the resources and funding it needs to support its nuclear weapons program.
In addition to these financial sanctions, the UN has also imposed sanctions aimed at limiting North Korea's access to key materials and technology. For example, the UN has imposed restrictions on the sale of certain dual-use items, such as chemicals and materials that could be used to support North Korea's nuclear weapons program. These sanctions are aimed at limiting the country's ability to obtain the materials it needs to advance its nuclear weapons program.
The UN sanctions regime against North Korea has been supported by a number of key international actors, including the United States, the European Union, and Japan. These countries have imposed their own sanctions on North Korea, often in coordination with the UN sanctions, in an effort to increase pressure on the country and limit its access to the international financial system.
Despite these efforts, North Korea has continued to advance its nuclear weapons and missile programs. In recent years, the country has conducted a number of nuclear tests and launched intercontinental ballistic missiles (ICBMs), indicating that it has made significant progress in its efforts to develop a viable nuclear weapons capability.
The UN sanctions regime against North Korea has faced significant challenges, including widespread sanctions evasion and the difficulty of verifying compliance with the sanctions. Despite these challenges, the UN remains committed to using its sanctions regime as a tool to pressure North Korea and limit its access to the resources and funding it needs to support its nuclear weapons program.
- The European Union (EU) has implemented a comprehensive set of sanctions against North Korea due to the country's nuclear weapons and ballistic missile programs. The sanctions are aimed at restricting North Korea's access to resources and funding for these programs. The following is a list of the key sanctions that the EU has imposed:
- Transfer restrictions: The EU prohibits certain transfers of funds to and from North Korea.
- Transactions with North Korean banks: The EU financial sector is prohibited from conducting certain transactions with banks based in North Korea and their affiliates, branches, and other financial entities located outside of the country.
- Monitoring of North Korean banks: The EU financial sector is required to monitor the activities of banks based in North Korea and their affiliates, branches, and other financial entities outside of the country more closely.
- Bank closures: The EU has closed the representative offices, branches, and subsidiaries of banks based in North Korea and their affiliates, branches, and other financial entities located outside of the country. The EU has also banned the opening of new such offices, branches, and subsidiaries.
- Correspondent banking relationships: The EU has terminated correspondent banking relationships with banks based in North Korea and their affiliates, branches, and other financial entities outside of the country, and has also banned the establishment of new such relationships.
- Joint ventures and investments: The EU has terminated joint ventures with, and investments in EU banks by, banks based in North Korea and their affiliates, branches, and other financial entities outside of the country, and has also banned such joint ventures and investments.
- EU financial sector restrictions in North Korea: The EU financial sector is prohibited from opening bank accounts, representative offices, branches, and subsidiaries in North Korea, and must close any existing accounts, offices, and subsidiaries if certain conditions are met.
- Bond restrictions: The EU has imposed restrictions on the issuance and trade of certain bonds.
- Cargo inspections: The EU requires prior information and inspection of cargoes to and from North Korea.
- Air and maritime restrictions: The EU has imposed restrictions on overflights and access to airports for certain flights, and restrictions on access to ports for certain vessels. It has also banned the leasing or chartering of certain vessels and aircraft to North Korea, and requires the de-registration of certain vessels.
- Services restrictions: The EU has imposed restrictions on certain services related to North Korean vessels.
- Natural persons restrictions: The EU has imposed obligations to expel certain natural persons and has frozen their funds and economic resources.
- Legal persons restrictions: The EU has closed the representative offices of certain legal persons, entities, and bodies subject to the freezing of their funds and resources, and has also imposed measures to prevent certain specialized teaching or training. The EU has also imposed enhanced vigilance over North Korean diplomatic personnel.
- Embargo on arms and goods: The EU has imposed an embargo on arms and related materiel, as well as certain goods and technology, including all dual-use goods. It has also banned the procurement from North Korea of arms, related materiel, and certain other goods and technology, and the trade in gold, precious metals, and diamonds with the North Korean government.
- Minerals restrictions: The EU has banned the procurement from North Korea of gold, titanium ore, vanadium ore, and certain minerals. It has also banned the procurement of coal, iron, and iron ore.
- Banknotes and coins: The EU has banned the supply of new North Korean banknotes and coins.
- Luxury goods: The EU has imposed an embargo on luxury goods, and has banned the import of such goods and certain petroleum products.
The Government of Japan has imposed sanctions on North Korea in response to its recent nuclear tests and ballistic missile launches, which pose a direct threat to Japan's security and undermine the peace and security of the international community. These measures are aimed at promoting the comprehensive resolution of outstanding issues of concern, such as the abductions, nuclear, and missile issues.
The first measure involves restrictions on movement of people, including a ban on the entry of North Korean citizens, a ban on the re-entry of North Korean authority officials and their associates, a ban on Japanese government officials visiting North Korea, and a ban on the landing of North Korean flag vessels' crew members. The second measure reduces the notification requirement for carrying currency to North Korea and bans payments to North Korea, except for humanitarian purposes. The third measure bans the entry of all North Korean flag vessels and third-country vessels that have previously called at North Korean ports. The fourth measure adds entities and individuals to the list of those designated for asset-freezing measures.
Japan is committed to its policy of "dialogue and pressure" and "action for action" and intends to maintain dialogue to resolve the abductions issue and work towards the return of all abductees as soon as possible, in accordance with the agreement reached with North Korea in 2014.
South Korea Sanctions
South Korea's sanctions against North Korea aim to exert pressure on the latter to comply with its international obligations and abandon its nuclear and ballistic missile programs. One of the key measures taken by South Korea is the imposition of restrictions on financial transactions and trade with North Korea. This includes a ban on financial transactions with North Korean individuals and entities that are associated with the country's weapons of mass destruction (WMD) program and a ban on trade with North Korean companies and entities involved in WMD-related activities. The South Korean government has also strengthened its monitoring and enforcement mechanisms to ensure that these sanctions are effectively implemented and violated.
Another significant measure taken by South Korea is the implementation of a ban on North Korean vessels and planes entering its territory like Japan and EU. This ban applies to all North Korean vessels, including those carrying humanitarian aid, and is intended to prevent the North Korean regime from exploiting loopholes in the sanctions regime. Additionally, South Korea has also banned North Korean citizens from entering its territory and has deported North Korean workers in the country.
In addition to these measures, South Korea has also taken steps to isolate North Korea diplomatically. This includes the suspension of high-level dialogue and the termination of various inter-Korean exchange and cooperation programs. South Korea has also supported and implemented the United Nations sanctions against North Korea, including the implementation of an asset freeze on North Korean individuals and entities associated with its WMD programs.
South Korea remains committed to a peaceful resolution of the North Korean nuclear issue through dialogue and negotiations, and is closely working with its international partners, including the United States and Japan, to this end. The measures taken by South Korea are intended to bring about the denuclearization of the Korean peninsula and to promote stability and security in the region.