Reed Smith Client Alerts

On the heels of United Nations Security Council Resolution 2375 released on September 11, 2017, President Trump issued a new executive order yesterday (the EO) that greatly expands U.S. sanctions against North Korea, particularly so-called secondary sanctions, which apply to non-U.S. individuals and corporations. As explained below, the EO establishes the following:

  • Broad new criteria for designating non-U.S. persons for sanctions, including blocking their assets in the United States
  • A “180 Day Rule” under which vessels and aircraft are barred from entering the U.S. for a period of 180 days after any port call or landing in North Korea
  • Authority for the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) to block any funds transiting accounts linked to North Korea that come within the U.S. or possession of a U.S. Person
  • Authority for OFAC to impose sanctions on foreign financial institutions that knowingly conducted or facilitated, on or after the date of the EO: (i) any significant transaction on behalf of certain blocked persons; or (ii) any significant transaction in connection with trade with North Korea

Authors: Leigh T. Hansson David Myers Jeffrey Orenstein

Type: Client Alerts

Blocking Sanctions

The EO provides that secondary sanctions can be imposed on persons determined by the U.S. Secretary of the Treasury, in consultation with the U.S. Secretary of State, to fall under any of the following categories:

  • Persons who operate in the construction, energy, financial services, fishing, information technology, manufacturing, medical, mining, textiles or transportation industries in North Korea
  • Persons who own, control or operate any port in North Korea, including any seaport, airport or land port of entry
  • Persons who have engaged in at least one significant importation from or exportation to North Korea of any goods, services or technology
  • North Korean persons that generate revenue for the Government of North Korea or the Workers' Party of Korea, including those engaged in commercial activity
  • Persons who have materially assisted, sponsored or provided financial, material or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to this order
  • Persons owned or controlled by, or who have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order