22 U.S.C. § 9221 — Determinations with respect to North

Page 2200 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE § 9221 paragraph (1) [amending this section] take effect on the date of the enactment of this Act [Aug. 2, 2017] and apply with respect to conduct described in subpara- graphs (D) through (N) of section 104(b)(1) of the North Korea Sanctions and Policy Enhancement Act of 2016 [22 U.S.C. 9214(b)(1)], as added by paragraph (1), engaged in on or after such date of enactment.’’ Executive Documents DELEGATION OF FUNCTIONS Functions and authorities of President under section 7122 of Pub. L. 116–92 with respect to subsec. (g) of this section delegated to Secretary of the Treasury, in con- sultation with the Secretary of State, by section 1(b)(iv) of Memorandum of President of the United States, Feb. 21, 2020, 85 F.R. 13717, set out as a note under section 286yy of this title. Functions and authorities of President under subsecs. (a), (b), and (d) of this section delegated to Secretary of the Treasury, in consultation with Secretary of State, and functions and authorities under subsecs. (c) and (e) of this section delegated to Secretary of the Treasury, by Memorandum of President of the United States, May 18, 2016, 81 F.R. 37479, set out as a note under sec- tion 9212 of this title. SUBCHAPTER II—SANCTIONS AGAINST NORTH KOREAN PROLIFERATION, HUMAN RIGHTS ABUSES, AND ILLICIT ACTIVI- TIES § 9221. Determinations with respect to North Korea as a jurisdiction of primary money laundering concern (a) Findings Congress makes the following findings: (1) The Under Secretary of the Treasury for Terrorism and Financial Intelligence, who is responsible for safeguarding the financial sys- tem against illicit use, money laundering, ter- rorist financing, and the proliferation of weap- ons of mass destruction, and has repeatedly expressed concern about North Korea’s misuse of the international financial system— (A) in 2006— (i) stated, ‘‘Given [North Korea’s] coun- terfeiting of U.S. currency, narcotics traf- ficking and use of accounts world-wide to conduct proliferation-related transactions, the line between illicit and licit North Ko- rean money is nearly invisible.’’; and (ii) urged financial institutions world- wide to ‘‘think carefully about the risks of doing any North Korea-related business’’; (B) in 2011, stated that North Korea— (i) ‘‘remains intent on engaging in pro- liferation, selling arms as well as bringing in material’’; and (ii) was ‘‘aggressively pursuing the effort to establish front companies.’’; and (C) in 2013, stated— (i) in reference to North Korea’s dis- tribution of high-quality counterfeit United States currency, that ‘‘North Korea is continuing to try to pass a supernote into the international financial system’’; and (ii) the Department of the Treasury would soon introduce new currency with improved security features to protect against counterfeiting by the Government of North Korea. (2) The Financial Action Task Force, an intergovernmental body whose purpose is to develop and promote national and inter- national policies to combat money laundering and terrorist financing, has repeatedly— (A) expressed concern at deficiencies in North Korea’s regimes to combat money laundering and terrorist financing; (B) urged North Korea to adopt a plan of action to address significant deficiencies in those regimes and the serious threat those deficiencies pose to the integrity of the international financial system; (C) urged all jurisdictions to apply coun- termeasures to protect the international fi- nancial system from ongoing and substan- tial money laundering and terrorist financ- ing risks emanating from North Korea; (D) urged all jurisdictions to advise their financial institutions to give special atten- tion to business relationships and trans- actions with North Korea, including North Korean companies and financial institu- tions; and (E) called on all jurisdictions— (i) to protect against correspondent rela- tionships being used to bypass or evade countermeasures and risk mitigation prac- tices; and (ii) to take into account money laun- dering and terrorist financing risks when considering requests by North Korean fi- nancial institutions to open branches and subsidiaries in their respective jurisdic- tions. (3) On March 7, 2013, the United Nations Se- curity Council unanimously adopted Resolu- tion 2094, which— (A) welcomed the Financial Action Task Force’s— (i) recommendation on financial sanc- tions related to proliferation; and (ii) guidance on the implementation of such sanctions; (B) decided that United Nations member states should apply enhanced monitoring and other legal measures to prevent the pro- vision of financial services or the transfer of property that could contribute to activities prohibited by applicable United Nations Se- curity Council resolutions; and (C) called upon United Nations member states to prohibit North Korean financial in- stitutions from establishing or maintaining correspondent relationships with financial institutions in their respective jurisdictions to prevent the provision of financial services if such member states have information that provides reasonable grounds to believe that such activities could contribute to— (i) activities prohibited by an applicable United Nations Security Council resolu- tion; or (ii) the evasion of such prohibitions. (b) Sense of Congress regarding the designation of North Korea as a jurisdiction of primary money laundering concern Congress— (1) acknowledges the efforts of the United Nations Security Council to impose limita- Page 2201 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE § 9221b 1 So in original. tions on, and to require the enhanced moni- toring of, transactions involving North Korean financial institutions that could contribute to sanctioned activities; (2) urges the President, in the strongest terms— (A) to immediately designate North Korea as a jurisdiction of primary money laun- dering concern; and (B) 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 (3) urges the President to seek the prompt implementation by other countries of en- hanced monitoring and due diligence to pre- vent North Korea’s misuse of the international financial system, including by sharing infor- mation about activities, transactions, and property that could contribute to— (A) activities sanctioned by applicable United Nations Security Council resolu- tions; or (B) the evasion of such sanctions. (c) Determinations regarding North Korea (1) In general Not later than 180 days after February 18, 2016, the Secretary of the Treasury, in con- sultation with the Secretary of State and the Attorney General, and in accordance with sec- tion 5318A of title 31, shall determine whether reasonable grounds exist for concluding that North Korea is a jurisdiction of primary money laundering concern. (2) Enhanced due diligence and reporting re- quirements If the Secretary of the Treasury determines under paragraph (1) that reasonable grounds exist for concluding that North Korea is a ju- risdiction of primary money laundering con- cern, the Secretary, in consultation with the Federal functional regulators (as defined in section 6809 of title 15), shall impose 1 or more of the special measures described in section 5318A(b) of title 31 with respect to the jurisdic- tion of North Korea. (3) Report required (A) In general Not later than 90 days after the date on which the Secretary of the Treasury makes a determination under paragraph (1), the Secretary shall submit to the appropriate congressional committees a report that con- tains the reasons for such determination. (B) Form The report submitted under subparagraph (A) shall be submitted in unclassified form, but may include a classified annex. (Pub. L. 114–122, title II, § 201, Feb. 18, 2016, 130 Stat. 101.) § 9221a. Prohibition on indirect correspondent accounts (a) In general Except as provided in subsection (b), if a United States financial institution has or ob- tains knowledge that a correspondent account established, maintained, administered, or man- aged by that institution for a foreign financial institution is being used by the foreign financial institution to provide significant financial serv- ices indirectly to any person, foreign govern- ment, or financial institution designated under section 9214 of this title, the United States fi- nancial institution shall ensure that such cor- respondent account is no longer used to provide such services. (b) Exception A United States financial institution is au- thorized to process transfers of funds to or from North Korea, or for the direct or indirect benefit of any person, foreign government, or financial institution that is designated under section 9214 of this title, only if the transfer— (1) arises from, and is ordinarily incident and necessary to give effect to, an underlying transaction that has been authorized by a spe- cific or general license issued by the Secretary of the Treasury; and (2) does not involve debiting or crediting a North Korean account. (c) Definitions In this section: (1) Correspondent account The term ‘‘correspondent account’’ has the meaning given that term in section 5318A of title 31. (2) United States financial institution The term ‘‘United States financial institu- tion’’ means 1 has the meaning given that term in section 510.310 of title 31, Code of Federal Regulations, as in effect on August 2, 2017. (3) Foreign financial institution The term ‘‘foreign financial institution’’ has the meaning given that term in section 1010.605 of title 31, Code of Federal Regula- tions, as in effect on August 2, 2017. (Pub. L. 114–122, title II, § 201A, as added Pub. L. 115–44, title III, § 312(a), Aug. 2, 2017, 131 Stat. 945.) § 9221b. Sanctions with respect to foreign finan- cial institutions that provide financial serv- ices to certain sanctioned persons (a) In general The Secretary of the Treasury shall impose one or more of the sanctions described in sub- section (b) with respect to a foreign financial in- stitution that the Secretary determines, in con- sultation with the Secretary of State, know- ingly, on or after the date that is 120 days after December 20, 2019, provides significant financial services to any person designated for the imposi- tion of sanctions with respect to North Korea under— (1) subsection (a), (b), or (g) of section 9214 of this title; (2) an applicable Executive order; or (3) an applicable United Nations Security Council resolution.