On 2 January 2015, US President Barack Obama issued a new Executive Order (“the Order”) authorizing the imposition of additional sanctions targeting the Democratic People’s Republic of Korea (“North Korea”). According to a Press Release issued by the US Treasury Department’s Office of Foreign Assets Control (“OFAC”), the Order is being issued in response to recent cyber-attacks targeting Sony Pictures Entertainment that were allegedly carried out by the Government of North Korea. Simultaneously, OFAC announced that, pursuant to the Order, it had designated ten individuals and three entities as Specially Designated Nationals (“SDNs”).
1. New Executive Order
The Order expands on existing US sanctions targeting North Korea by authorizing OFAC to designate as SDNs any of the following parties:
-
Agencies, instrumentalities, or controlled entities of the Government of North Korea or the Workers’ Party of Korea;
-
Officials of the Government of North Korea or of the Workers’ Party of Korea;
-
Parties determined to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Government of North Korea or any person whose property and interests in property are blocked pursuant to the Order; and
-
Parties determined to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, the Government of North Korea or any person whose property and interests in property are blocked pursuant to the Order;
Parties designated under the Order will be tagged with the [DPRK2] tag on OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”). The Order does not “block” or freeze the assets of the Government of North Korea generally or impose other broad sanctions targeting North Korea.
US Persons are prohibited from dealing, directly or indirectly, with parties designated as SDNs or with any entities in which one or more SDNs own a 50% or greater interest. For purposes of the Order, “US Persons” include (i) entities organized under US laws and their non-US branches, (ii) individuals or entities in the United States, and (iii) US citizens or permanent resident aliens (“Green Card” holders) wherever located or employed. While non-US persons, including separately incorporated foreign subsidiaries of US companies, are generally not subject to the Order, non-US persons may trigger US sanctions prohibitions if they cause any SDN-related transactions to occur in whole or in part in the United States or elsewhere by US Persons.
2. New SDN Designations
In conjunction with the issuance of the Order, OFAC announced that it has added ten individuals and three entities to the SDN List pursuant to the authority provided in the Order. The three entities designated under the Order—Reconnaissance General Bureau, Korea Mining Development Trading Corporation, and Korea Tangun Trading Corporation—were previously designated as SDNs under other sanctions programs.
