Gardner, Cruz Submit Letter Urging Financial Sanctions Against North Korea

Press Release

U.S. Senators Cory Gardner (R-CO) and Ted Cruz (R-TX) delivered a letter to Treasury Secretary Steven Mnuchin that expresses grave concerns regarding continued aggression from the Democratic People's Republic of Korea (DPRK), and urging him to execute the full extent of financial sanctions and targeted financial measures allowed under current law. The letter was also signed by Senators Thom Tillis (R-NC), Marco Rubio (R-FL), Pat Toomey (R-PA), and David Perdue (R-GA).

"As Kim Jung-un has exposed his willingness to increase ballistic missile testing with the ultimate goal of achieving nuclear breakout, the potential for this regime to attain a developed and capable intercontinental ballistic missile (ICBM) poses an imminent threat that cannot be ignored," the senators wrote. "North Korea's test of an intermediate-range ballistic missile this past weekend demonstrates advancement in fuel and launch technology, underscoring the necessity of faithfully executing the law to meet this growing threat."

The senators' letter lists ten actions that, if fully enforced and implemented, could more effectively cut off North Korea's access to the hard currency it uses to finance its illicit nuclear program:

1. Add any remaining North Korean banks to the list of Specially Designated Nationals, thus completing the cutoff of North Korean banks from the international financial system.

2.Ensure that the Treasury Department has sufficient funds, personnel, resources, and legal authorities to expose North Korea's money laundering network and its Chinese enablers at the earliest possible date. Then, in accordance with the NKSPEA, either add their names to the list of Specially Designated Nationals and freeze their assets, assess appropriate civil and criminal penalties, or both.

3.Enact additional Patriot Act section 311 special measures against North Korea, including Special Measure 2, which would require banks operating within U.S. jurisdiction "to maintain records, file reports, or both, concerning the aggregate amount of transactions, or concerning each transaction," with respect to any North Korean property, interests in property, or funds. This measure would leverage the knowledge of the financial industry and begin the laborious process of mapping the web of front companies, shell companies, and agents that sustain Kim Jong-un's regime.

4.Work with the State Department to investigate whether North Korea merits re-designation as a State Sponsor of Terrorism.

5.Revise or replace the outdated North Korea Sanctions Regulations at 31 CFR Part 510 to impose comprehensive transactions licensing requirements on transactions involving North Korea, similar to those that previously applied to Iran, Burma, and Cuba.

6.Clarify to the financial industry worldwide that in the future, the Department of Treasury will strictly enforce Know-Your-Customer obligations, and requirements to file Suspicious Activity Reports and Currency Transactions reports, with respect to any North Korean nationals, entities, agents, or assets. Enforcement of these regulations could yield a windfall of financial intelligence necessary to find and block those North Korean assets.

7.In conjunction with the Attorney General at the earliest time possible, initiate an investigation into the Bank of China and the 12 Chinese banks involved in the Dandong Hongxiang case for possible violations of U.S. laws or financial regulations for their North Korea-related transactions.

8.Take strong enforcement action against any banks that continue to unlawfully provide direct or indirect correspondent banking services to North Korean banks.

9.In conjunction with the Secretary of State, ask European Union and Belgian authorities to ensure that North Korean banks are denied access to specialized financial messaging services, such as the SWIFT network, in accordance with their obligations under U.N. Security Council resolutions.

10.Continue targeting and freezing the financial assets of any Chinese entity pursuant to the NKSPEA and Executive Order 13722, which prohibit any property or interests within the United States from importing coal from North Korea.

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