On Feb. 18, 2016, President Obama signed into law the North Korea Sanctions and Policy Enhancement Act of 2016 (H.R. 757) (the Act), a bill tightening U.S. sanctions against North Korea.  The legislation imposes strict licensing requirements for the export or reexport to North Korea of any U.S.-origin goods, software, or technology, and grants the President the authority to impose targeted sanctions on persons deemed to engage in certain types of activities related to the Government of North Korea’s nuclear proliferation, money laundering, as well as its efforts to undermine cybersecurity.

Stricter Export Licensing Requirements

As a result of the Act, all exports or reexports to North Korea of U.S.-origin items or foreign-made items containing more than 10 percent U.S.-origin content will require an export license from the U.S. Department of Commerce.  License applications will be considered under a presumption of denial, although the legislation provides that the U.S. government may issue exemptions from this licensing requirement for transactions involving humanitarian aid and exports to North Korea of non-luxury food products, agricultural products, medicine, or medical devices designated “EAR99” (the lowest level of export control classification).  At this time, it is unclear whether or how the U.S. Government will implement these exemptions.

Although Department of Commerce export licenses were required for the export or reexport of most items to North Korea before the signing of the Act, license applications were previously reviewed on a case-by-case basis, instead of under the policy of denial now in effect.

Expansion of Targeted Sanctions

In addition to preexisting sanctions on certain persons engaged in the North Korean arms trade and nuclear proliferation activities, the Act grants the President the authority to impose sanctions on individuals or entities that have, or have attempted to, knowingly engage or assist in the following:

  • Activities or transactions with the government of North Korea related to proliferation of weapons of mass destruction;
  • Activities related to significant arms or related material;
  • Import or export of luxury goods to or from North Korea;
  • Censorship by the government of North Korea;
  • Serious human rights abuses by the government of North Korea;
  • Money laundering, counterfeiting, or narcotics trafficking involving or supporting the government of North Korea; or
  • Significant activities undermining cyber security in support of the government of North Korea. Continue Reading.