U.S. Economic and Trade Sanctions on North Korea

Since the agreement at the 6-Party Talks in February, and this past week's visit of Kim Gye-gwan, North Korea's vice foreign minister, to San Francisco and New York, a lot of attention is getting paid to partially lifting American sanctions on North Korea. The specific regulations or acts of Congress most commonly mentioned for removal or adjustment are those pertaining to state sponsors of terrorism, and the Trading with the Enemy Act.

Since my MA Thesis was actually on U.S. economic sanctions on North Korea (Geekfest 03, that was), I decided to recycle some of that information here as a means of providing background on the laws and regulations in question. This information was originally compiled in 2003, but should still be accurate.

The rules themselves are a bureaucratic morass of acts, acts enabling other acts, acts giving authority for regulations, regulations being governed by separate acts, presidential findings, enabling legislation, ... etc. I seriously doubt there's anyone in the North who has even a halfway clear understanding of the sanctions they're under - I've personally tried translating all of the related information into Korean and it was a f***king nightmare, even after seeking help from a professional, South Korean, translator. So, my best guess is that Pyongyang only has a very general idea of the regulations, what they entail, how they came about, and how they can be altered or rescinded.

North Korea has been involved in a wide range of terrorist incidents, as defined by the U.S., over the years[1]:

· the attempted assassination of then-South Korean President Park by a commando team in 1968

· the seizure of the U.S. ship Pueblo in international waters in 1968

· the assassination of President Park’s wife in 1974

· the attack on U.S. soldiers in the DMZ in the 1976 ‘tree-cutting incident’

· the explosion of a bomb in Myanmar (Burma) intended to kill South Korean President Chun that killed 17 senior South Korean officials in 1983

However, it was not until 1988 that North Korea was actually added to the U.S. list of countries supporting international terrorism:

“Following the November 29, 1987 destruction of Korean Air Lines 007, in flight, by a bomb reportedly planted by two North Korean agents, Secretary of State George Shultz placed North Korea on the list of countries supporting international terrorism. Most elements of trade, Beneficiary Developing Country (BDC) status, sales of items on the U.S. Munitions List, most foreign aid, Export-Import Bank funding, and support in international financial institutions are denied to countries found to be supporting international terrorism under the Export Administration Act of 1979. North Korea was added to the list effective January 20, 1988.”[2]

Though the U.S. doesn’t currently allege that the North has engaged in any terrorist acts since the KAL 007 bombing in 1987, it has in practice defined terrorism-supporting activities to include missile proliferation, harboring terrorists (i.e. Japanese Red Army members), weapons-dealing to terrorist groups, and, specifically in the case of North Korea, the kidnapping, holding, and refusal to provide information on the condition and whereabouts of Japanese citizens brought to the North. (These Japanese citizens were taken to the North to provide training to NK spies on Japanese language and customs.) While progress has been made in some of these areas (expelling Red Army members, providing information on and permission to return home for a few surviving Japanese kidnap victims, etc.), both the Japanese and U.S. governments have to-date been unsatisfied with the extent of progress.

However, if the U.S. does decide to deem the North's progress on this issue sufficient, what are the actual steps available to the U.S. to remove the terrorism-related sanctions?

“North Korea may not be taken off the list of terrorist states unless the President waives [italics in original] this prohibition after consulting with Congress and determining that national security interests or humanitarian reasons warrant the removal. For removal, the President is also required to certify to Congress that either, 1) there has been a fundamental change in leadership and government policies; the government is no longer supporting acts of terrorism; and it has provided assurances that it will not do so in the future, or 2) 45 days in advance of removing the terrorist designation, the government has not supported acts of terrorism for the past six months and has provided assurance that it will not do so in the future.”[3]

Obviously, any current changes to sanctions on the North would come under the much lower threshold of section 2.

For more on the Trading with the Enemy Act, please scroll down past the citation information.

[1] Rinn S Shinn, “North Korea: Chronology of Provocations, 1950-2000,” Congressional Research Service (CRS) report for Congress (RL30004), Washington D.C., Government Printing Office, January 2001, pp. 4-5, 7-8.

[2] Rennack, “North Korea: Economic Sanctions,” op. cit., p. 7

[3] Information in this section on North Korean pronouncements on, and relations with, terrorism are mainly from Shinn, op. cit., pp. 1-3

Trading With the Enemy Act

The Act, originally implemented during World War I (yes, the first one), was applied to North Korea through the proclamation of a national emergency by President Truman in response to Chinese entry into the Korean War in 1950. The Act was officially implemented for both North Korea and China (lifted for them in June 1971) on December 17, 1950 under the ‘national emergency’ authority of section 5(b) of the Act (Presidential Proclamation 2914; 15 F.R. 9029).

The Act gave the President the authority to impose a near total embargo on U.S. trade and financial relations with North Korea. The embargo was originally defined and regulated through the Foreign Assets Control Regulations administered and modified by the Office of Foreign Assets Control of the Department of the Treasury.

“The regulatory mechanics of the embargo consist of a general ban on commercial and financial transactions, which can take place only if they are authorized by regulation (general license), or specifically licensed by the Office of Foreign Assets Control.”[1]

A Presidential finding, as was the case with President Clinton’s 2001 decision to ease sanctions on exports to North Korea, is necessary to alter or rescind these sanctions. Given that there is still no peace treaty from the 1950-53 Korean War, instead, basically, only a ceasefire, the long-term removal of North Korea from this list would appear to require an actual peace treaty.

[1] Davis, op. cit., p. 22 (Davis, Zachary S.; Niksch, Larry A.; Nowels, Lar Q.; Pregelj, Vladimir N.; Shinn, Rinn-Sup; Sutter, Robert G. Korea: Procedural and Jurisdictional Questions Regarding Possible Normalization of Relations with North Korea. Congressional Research Service (CRS) report for Congress (94-933 S). Washington D.C. Government Printing Office, November 1994.)

U.S. Sanctions on North Korea - Background Info

Since the agreement at the 6-Party Talks in February, and this past week's visit of Kim Gye-gwan, North Korea's vice foreign minister, to San Francisco and New York, a lot of attention is getting paid to partially lifting American sanctions on North Korea. The specific regulations or acts of Congress most commonly mentioned for removal or adjustment are those pertaining to state sponsors of terrorism, and the Trading with the Enemy Act. Since my MA Thesis was actually on U.S. economic sanctions on North Korea (Geekfest 03, that was), I decided to recycle some of that information here as a means of providing background on the laws and regulations in question. This information was originally compiled in 2003, but should still be accurate. The rules themselves are a bureaucratic morass of acts, acts enabling other acts, acts giving authority for regulations, regulations being governed by separate acts, presidential findings, enabling legislation, ... etc. I seriously doubt there's anyone in the North who has even a halfway clear understanding of the sanctions they're under - I've personally tried translating all of the related information into Korean and it was a f**king nightmare, even after seeking help from a professional, South Korean, translator. So, my best guess is that Pyongyang only has a very general idea of the regulations, what they entail, how they came about, and how they can be altered or rescinded. State Sponsors of Terrorism North Korea has been involved in a wide range of terrorist incidents, as defined by the U.S., over the years[1]: · the attempted assassination of then-South Korean President Park by a commando team in 1968 · the seizure of the U.S. ship Pueblo in international waters in 1968 · the assassination of President Park’s wife in 1974 · the attack on U.S. soldiers in the DMZ in the 1976 ‘tree-cutting incident’ · the explosion of a bomb in Myanmar (Burma) intended to kill South Korean President Chun that killed 17 senior South Korean officials in 1983 However, it was not until 1988 that North Korea was actually added to the U.S. list of countries supporting international terrorism: “Following the November 29, 1987 destruction of Korean Air Lines 007, in flight, by a bomb reportedly planted by two North Korean agents, Secretary of State George Shultz placed North Korea on the list of countries supporting international terrorism. Most elements of trade, Beneficiary Developing Country (BDC) status, sales of items on the U.S. Munitions List, most foreign aid, Export-Import Bank funding, and support in international financial institutions are denied to countries found to be supporting international terrorism under the Export Administration Act of 1979. North Korea was added to the list effective January 20, 1988.”[2] Though the U.S. doesn’t currently allege that the North has engaged in any terrorist acts since the KAL 007 bombing in 1987, it has in practice defined terrorism-supporting activities to include missile proliferation, harboring terrorists (i.e. Japanese Red Army members), weapons-dealing to terrorist groups, and, specifically in the case of North Korea, the kidnapping, holding, and refusal to provide information on the condition and whereabouts of Japanese citizens brought to the North. (These Japanese citizens were taken to the North to provide training to NK spies on Japanese language and customs.) While progress has been made in some of these areas (expelling Red Army members, providing information on and permission to return home for a few surviving Japanese kidnap victims, etc.), both the Japanese and U.S. governments have to-date been unsatisfied with the extent of progress. However, if the U.S. does decide to deem the North's progress on this issue sufficient, what are the actual steps available to the U.S. to remove the terrorism-related sanctions? “North Korea may not be taken off the list of terrorist states unless the President waives [italics in original] this prohibition after consulting with Congress and determining that national security interests or humanitarian reasons warrant the removal. For removal, the President is also required to certify to Congress that either, 1) there has been a fundamental change in leadership and government policies; the government is no longer supporting acts of terrorism; and it has provided assurances that it will not do so in the future, or 2) 45 days in advance of removing the terrorist designation, the government has not supported acts of terrorism for the past six months and has provided assurance that it will not do so in the future.”[3] Obviously, any current changes to sanctions on the North would come under the much lower threshold of section 2. For more on the Trading with the Enemy Act, please scroll down past the citation information. [1] Rinn S Shinn, “North Korea: Chronology of Provocations, 1950-2000,” Congressional Research Service (CRS) report for Congress (RL30004), Washington D.C., Government Printing Office, January 2001, pp. 4-5, 7-8. [2] Rennack, “North Korea: Economic Sanctions,” op. cit., p. 7 [3] Information in this section on North Korean pronouncements on, and relations with, terrorism are mainly from Shinn, op. cit., pp. 1-3 Trading With the Enemy Act* The Act, originally implemented during World War I (yes, the first one), was applied to North Korea through the proclamation of a national emergency by President Truman in response to Chinese entry into the Korean War in 1950. The Act was officially implemented for both North Korea and China (lifted for them in June 1971) on December 17, 1950 under the ‘national emergency’ authority of section 5(b) of the Act (Presidential Proclamation 2914; 15 F.R. 9029). The Act gave the President the authority to impose a near total embargo on U.S. trade and financial relations with North Korea. The embargo was originally defined and regulated through the Foreign Assets Control Regulations administered and modified by the Office of Foreign Assets Control of the Department of the Treasury. “The regulatory mechanics of the embargo consist of a general ban on commercial and financial transactions, which can take place only if they are authorized by regulation (general license), or specifically licensed by the Office of Foreign Assets Control.”[1] A Presidential finding, as was the case with President Clinton’s 2001 decision to ease sanctions on exports to North Korea, is necessary to alter or rescind these sanctions. Given that there is still no peace treaty from the 1950-53 Korean War, instead, basically, only a ceasefire, the long-term removal of North Korea from this list would appear to require an actual peace treaty. [1] Davis, op. cit., p. 22 (Davis, Zachary S.; Niksch, Larry A.; Nowels, Lar Q.; Pregelj, Vladimir N.; Shinn, Rinn-Sup; Sutter, Robert G. Korea: Procedural and Jurisdictional Questions Regarding Possible Normalization of Relations with North Korea. Congressional Research Service (CRS) report for Congress (94-933 S). Washington D.C. Government Printing Office, November 1994.)



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