Sec. 201. Determinations with respect to North Korea as a jurisdiction of primary money laundering concern
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Congress makes the following findings: The Undersecretary of the Treasury for Terrorism and Financial Intelligence, who is responsible for safeguarding the financial system against illicit use, money laundering, terrorist financing, and the proliferation of weapons of mass destruction, has repeatedly expressed concern about North Korea’s misuse of the international financial system as follows: In 2006, the Undersecretary stated that, given North Korea’s counterfeiting of U.S. currency, narcotics trafficking and use of accounts worldwide to conduct proliferation-related transactions, the line between illicit and licit North Korean money is nearly invisible and urged financial institutions worldwide to think carefully about the risks of doing any North Korea-related business. .
In 2011, the Undersecretary stated that North Korea remains intent on engaging in proliferation, selling arms as well as bringing in material, and was aggressively pursuing the effort to establish front companies. . In 2013, the Undersecretary stated, in reference to North Korea’s distribution of high-quality counterfeit United States currency, that North Korea is continuing to try to pass a supernote into the international financial system, and that the Department of the Treasury would soon introduce new currency with improved security features to protect against counterfeiting by the Government of North Korea.
The Financial Action Task Force, an intergovernmental body whose purpose is to develop and promote national and international policies to combat money laundering and terrorist financing, has repeatedly— expressed concern at deficiencies in North Korea’s regimes to combat money laundering and terrorist financing; urged North Korea to adopt a plan of action to address significant deficiencies in these regimes and the serious threat they pose to the integrity of the international financial system; urged all jurisdictions to apply countermeasures to protect the international financial system from ongoing and substantial money laundering and terrorist financing risks emanating from North Korea; urged all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with North Korea, including North Korean companies and financial institutions; and called on all jurisdictions to protect against correspondent relationships being used to bypass or evade countermeasures and risk mitigation practices, and take into account money laundering and terrorist financing risks when considering requests by North Korean financial institutions to open branches and subsidiaries in their jurisdiction.
On March 7, 2013, the United Nations Security Council unanimously adopted Resolution 2094, which— welcomed the Financial Action Task Force’s recommendation on financial sanctions related to proliferation, and its guidance on the implementation of sanctions; decided that Member States should apply enhanced monitoring and other legal measures to prevent the provision of financial services or the transfer of property that could contribute to activities prohibited by applicable United Nations Security Council resolutions; and called on Member States to prohibit North Korean banks from establishing or maintaining correspondent relationships with banks in their jurisdictions, to prevent the provision of financial services, if they have information that provides reasonable grounds to believe that these activities could contribute to activities prohibited by an applicable United Nations Security Council resolution, or to the evasion of such prohibitions.
Congress— acknowledges the efforts of the United Nations Security Council to impose limitations on, and require enhanced monitoring of, transactions involving North Korean financial institutions that could contribute to sanctioned activities; urges the President, in the strongest terms, to immediately designate North Korea as a jurisdiction of primary money laundering concern, and to adopt stringent special measures to safeguard the financial system against the risks posed by North Korea’s willful evasion of sanctions and its illicit activities; and urges the President to seek the prompt implementation by other states of enhanced monitoring and due diligence to prevent North Korea’s misuse of the international financial system, including by sharing information about activities, transactions, and property that could contribute to activities sanctioned by applicable United Nations Security Council resolutions, or to the evasion of sanctions.
The Secretary of the Treasury shall, not later than 180 days after the date of the enactment of this Act, determine, in consultation with the Secretary of State and Attorney General, and in accordance with section 5318A of title 31, United States Code, whether reasonable grounds exist for concluding that North Korea is a jurisdiction of primary money laundering concern. If the Secretary of the Treasury determines under this subsection that reasonable grounds exist for finding that North Korea is a jurisdiction of primary money laundering concern, the Secretary of the Treasury, in consultation with the Federal functional regulators, shall impose one or more of the special measures described in paragraphs
(1)through
(5)of section 5318A(b) of title 31, United States Code, with respect to the jurisdiction of North Korea. If the Secretary of the Treasury determines that North Korea is a jurisdiction of primary money laundering concern, the Secretary of the Treasury shall, not later than 90 days after the date on which the Secretary makes such determination, submit to the appropriate congressional committees a report on the determination made under paragraph
(1)together with the reasons for that determination. A report or copy of any report submitted under this paragraph shall be submitted in unclassified form but may contain a classified annex.