Sec. 2. Findings

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A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

The Congress finds the following: On June 1, 2016, the Department of the Treasury’s Financial Crimes Enforcement Network announced a Notice of Finding that the Democratic People’s Republic of Korea is a jurisdiction of primary money laundering concern due to its use of state-controlled financial institutions and front companies to support the proliferation and development of weapons of mass destruction

(WMD)and ballistic missiles. The Financial Action Task Force

(FATF)has expressed serious concerns with the threat posed by North Korea’s proliferation and financing of WMD, and has called on FATF members to apply effective counter-measures to protect their financial sectors from North Korean money laundering, WMD proliferation financing, and the financing of terrorism. In its February 2017 report, the U.N. Panel of Experts concluded that— North Korea continued to access the international financial system in support of illicit activities despite sanctions imposed by U.N. Security Council Resolutions 2270

(2016)and 2321 (2016); during the reporting period, no member state had reported taking actions to freeze North Korean assets; and sanctions evasion by North Korea, combined with inadequate compliance by member states, had significantly negated the impact of U.N. Security Council resolutions. In its September 2017 report, the U.N. Panel of Experts found that— North Korea continued to violate financial sanctions by using agents acting abroad on the country’s behalf; foreign financial institutions provided correspondent banking services to North Korean persons and front companies for illicit purposes; foreign companies violated sanctions by maintaining links with North Korean financial institutions; and North Korea generated at least $270 million during the reporting period through the violation of sectoral sanctions. North Korean entities engage in significant financial transactions through foreign bank accounts that are maintained by non-North Korean nationals, thereby masking account users’ identity in order to access financial services. North Korea’s sixth nuclear test on September 3, 2017, demonstrated an estimated explosive power more than 100 times greater than that generated by its first nuclear test in 2006. On February 23, 2018, the Department of the Treasury announced its largest-ever set of North Korea-related sanctions, with a particular focus on shipping and trading companies, and issued a maritime advisory to highlight North Korea’s sanctions evasion tactics. On May 9, 2019, the United States seized a North Korean ship, the Wise Honest, which had previously been detained by Indonesia for carrying coal in violation of United Nations sanctions. According to the March 2019 Final Report of the U.N. Panel of Experts, The nuclear and ballistic missile programmes of the Democratic People’s Republic of Korea remain intact and the country continues to defy Security Council resolutions through a massive increase in illegal ship-to-ship transfers of petroleum products and coal. These violations render the latest United Nations sanctions ineffective by flouting the caps on the import of petroleum products and crude oil by the Democratic People’s Republic of Korea as well as the coal ban, imposed in 2017 by the Security Council in response to the country’s unprecedented nuclear and ballistic missile testing. . The U.N. Panel of Experts further concluded: Financial sanctions remain some of the most poorly implemented and actively evaded measures of the sanctions regime. Individuals empowered to act as extensions of financial institutions of the Democratic People’s Republic of Korea operate in at least five countries with seeming impunity. . North Korea has successfully tested short-range, submarine-launched, and intercontinental ballistic missiles, and is rapidly progressing in its development of a nuclear-armed missile that is capable of reaching United States territory.