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Passed House amended (01/12/2016)

North Korea Sanctions Enforcement Act of 2016

TITLE I--INVESTIGATIONS, PROHIBITED CONDUCT, AND PENALTIES

(Sec. 102) This bill requires the President to investigate any credible information of sanctionable activities by a person (individual or entity) involving North Korea.

(Sec. 103) The President shall periodically brief Congress on efforts to implement this Act, including:

• the government of North Korea's principal foreign assets income sources;
• a list of persons designated for prohibited conduct and sanctions;
• a list of persons with respect to which sanctions were waived or removed; and
• a summary of any diplomatic efforts made, including efforts to encourage the European Union and other states and jurisdictions to sanction and block the assets of the Foreign Trade Bank of North Korea and Daedong Credit Bank.

(Sec. 104) The President shall designate any person that has knowingly:

• engaged in significant activities or transactions with the government of North Korea that have materially contributed to the proliferation of weapons of mass destruction or their means of delivery;
• imported, exported, or reexported to, into, or from North Korea any significant arms or related materiel;
• provided significant training or other services or assistance, or engaged in significant transactions, related to the manufacture, maintenance, or use of arms or related materiel to be imported, exported, or reexported to, into, or from North Korea, or following their importation, exportation, or reexportation to, into, or from North Korea;
• imported, exported, or reexported significant luxury goods to or into North Korea;
• engaged in or been responsible for censorship by the government of North Korea, including prohibiting, limiting, or penalizing the exercise of freedom of expression or assembly, limiting access to print, radio or other broadcast media, Internet or other electronic communications;
• engaged in or been responsible for serious human rights abuses by the government of North Korea;
• engaged in acts of money laundering, counterfeiting of goods or currency, bulk cash smuggling, narcotics trafficking, or other illicit activity that involves or supports the government of North Korea or any senior government official; or
• attempted to engage in such conduct.

The President:

• shall exercise the authorities of the International Emergency Economic Powers Act to block all property and property interests of any designated person that are in or come within the United States, or that are or come within the possession or control of any U.S. person, including any foreign branch; and
• may apply any of the sanctions under this Act.

The penalties provided under the International Emergency Economic Powers Act shall apply to a person who violates, attempts to violate, or conspires to violate any such prohibition.

The President may designate any person that has knowingly:

• engaged in, contributed to, assisted, or provided financial, material or technological support for, or goods and services in support of, any violation or evasion of an applicable United Nations Security Council resolution;
• facilitated the transfer of any funds, financial assets, or economic resources of, or property or property interests of, a person designated under an Executive order or by the Security Council;
• facilitated the transfer of funds, financial assets, or economic resources, or any property or property interests derived from, involved in, or that has materially contributed to prohibited conduct;
• facilitated any transaction, including any transaction in bulk cash or other stores of value, without applying enhanced monitoring to ensure that such transaction does not contribute materially to prohibited conduct described in this Act, an Executive order, or an applicable Security Council resolution;
• facilitated any transaction in cash or monetary instruments used to facilitate conduct prohibited by a Security Council resolution;
• engaged in significant activities undermining cyber security in support of the government of North Korea or any senior government official, or have knowingly contributed to the bribery of a North Korean official, the misappropriation or theft of public funds by, or for the benefit of, such an official; or
• assisted or provided significant financial, material, or technological support for, or goods or services to or in support of, such conduct.

With respect to a designated person, the President may:

• apply the procurement sanctions under this Act;
• apply certain financial special measures;
• prohibit foreign exchange transactions that are subject to U.S. jurisdiction;
• prohibit transfers of credit or payments between financial institutions or by, through, or to financial institutions that are subject to U.S. jurisdiction; and
• exercise the authorities of the International Emergency Economic Powers Act to block property and property interests of a designated person that are in or come within the United States, or that are or come within the possession or control of any U.S. person, including any foreign branch.

The President shall promulgate regulations prohibiting U.S. persons from engaging in a property or services transaction:

• in which the government of North Korea has an interest,
• located in North Korea,
• of North Korean origin, or
• in which property was knowingly transferred to the government of North Korea.

The President shall deny or revoke any license for any transaction that lacks sufficient financial controls to ensure that such transaction will not facilitate prohibited conduct.

The President may issue regulations to authorize: (1) certain exempt or waived transactions, and (2) transactions and activities authorized under the North Korean Human Rights Act of 2004.

(Sec. 105) Any property, real or personal, involved in an actual or attempted violation of this Act, or which constitutes or is derived from proceeds traceable to a violation of it, is subject to U.S. forfeiture.

TITLE II--SANCTIONS AGAINST NORTH KOREAN PROLIFERATION, HUMAN RIGHTS ABUSES, ILLICIT ACTIVITIES, AND SIGNIFICANT ACTIVITIES UNDERMINING CYBER SECURITY

(Sec. 201) Security Council efforts to impose limitations on, and require enhanced monitoring of, transactions involving North Korean financial institutions that could contribute to sanctioned activities are acknowledged.

The President should:

• designate North Korea as a jurisdiction of primary money laundering concern, and adopt measures to safeguard the financial system against North Korea's evasion of sanctions and its illicit activities; and
• seek the prompt implementation by other states of enhanced monitoring to prevent North Korea's misuse of the international financial system.

The Department of the Treasury shall: (1) determine whether reasonable grounds exist for concluding that North Korea is a jurisdiction of primary money laundering concern; and (2) if so, impose specified financial-related special measures and submit a related report to Congress.

(Sec. 202) It is the sense of Congress that the President should intensify diplomatic efforts to develop a multilateral strategy for protecting the global financial system against risks emanating from North Korea.

(Sec. 203) A license shall be required for export to North Korea of goods or technology subject to the Export Administration Regulations without regard to whether North Korea has been designated a country whose government has supported acts of international terrorism. Any such license shall be subject to a presumption of denial.

Certain prohibitions and restrictions under the Arms Export Control Act shall apply to exporting or otherwise providing any munitions item to North Korea without regard to whether or not it is designated a state sponsor of terrorism.

Specified criminal penalties shall apply to any U.S. person that engages in financial transactions with the government of North Korea, except as provided for in this Act and under the North Korean Human Rights Act of 2004.

The President shall withhold assistance under the Foreign Assistance Act of 1961 to the governments of countries providing lethal military equipment to, or receiving it from, North Korea. The President may waive this prohibition if in the U.S. national interest.

(Sec. 204) The U.S. government is prohibited from procuring, or contracting to procure, any goods or services from a designated person.

The Federal Acquisition Regulation is amended to require each prospective contractor to certify that it does not engage in any activity sanctionable under this Act for any contract that involves an amount greater than the simplified acquisition threshold ($100,000). Any contract with a person making a false certification shall be terminated unless there are urgent and compelling circumstances significantly affecting U.S. interests.

An agency head shall initiate a suspension and debarment proceeding against any person making a false certification, and upon suspension or debarment, ensure that such person is entered into the government database of parties excluded from federal programs.

The remedies of contract termination and suspension and debarment shall not apply with respect to federal procurement of the eligible products of certain foreign countries or instrumentalities under the Trade Agreements Act of 1979.

(Sec. 205) The President, through the Department of Homeland Security (DHS), shall report to Congress on foreign seaports and airports whose inspections of ships, aircraft, and conveyances originating in North Korea, carrying North Korean property, or operated by the North Korean government are deficient to effectively prevent the facilitation of any of the activities sanctionable under this Act.

DHS shall require, using the Automated Targeting System operated by the National Targeting Center in U.S. Customs and Border Protection, enhanced screening procedures to determine if physical inspections are warranted of any cargo bound for or landed in the United States that has been transported through such a seaport or airport if there are reasonable grounds to believe that such cargo contains goods prohibited under this Act.

Any vessel, aircraft, or conveyance used to facilitate sanctionable activity that comes within U.S. jurisdiction may be seized and forfeited.

(Sec. 206) Any alien (or any alien who is a corporate officer of a designated person) who the Department of State or DHS knows, or has reasonable grounds to believe, is described in section 104 of this Act to be: (1) inadmissible to the United States, (2) ineligible to receive a visa or other documentation to enter the United States, and (3) otherwise ineligible to be admitted or paroled into the United States or to receive any other benefit under the Immigration and Nationality Act.

Any visa or other entry documentation already issued to such an alien shall be revoked, with an exception for an alien who must be admitted to comply with the Agreement regarding the Headquarters of the United Nations.

(Sec. 207) The following are exempt from sanctions under this Act: (1) authorized U.S. intelligence activities, and (2) transactions necessary to comply with U.S. obligations under the Agreement regarding the Headquarters of the United Nations or the Vienna Convention on Consular Relations.

Discretionary exemptions from sanctions are permitted for transactions, financial or otherwise, involving humanitarian aid and imports into North Korea of non-luxury food products, agricultural products, medicine, or medical devices designated "EAR 99" under the Export Administration Regulations.

The President may waive sanctions, on a case-by-case basis, for a year or more in specified circumstances.

(Sec. 208) The President shall report to Congress on significant activities undermining cyber security conducted, or otherwise ordered or controlled, by the government of North Korea.

(Sec. 209) It is the sense of Congress that North Korea's nuclear and ballistic missile programs are of mutual concern to the United States, Japan, and South Korea and a trilateral military intelligence-sharing arrangement is essential to the security of each nation and the Asia-Pacific region.

(Sec. 210) The President shall report to Congress on nuclear cooperation between North Korea and Iran, including the identity of Iranian and North Korean persons that have knowingly engaged in or directed the provision of related material support or the exchange of information between such countries.

TITLE III--PROMOTION OF HUMAN RIGHTS

(Sec. 301) The North Korean Human Rights Act of 2004 is amended to direct the President to submit a report to Congress setting forth a detailed plan for making radio, Internet, and electronic mass communications available to the people of North Korea.

(Secs. 302-303) The State Department shall report to Congress regarding:

• each political prison camp in North Korea; and
• the identity of each person responsible for serious human rights abuses or censorship in North Korea, along with a description of those abuses or censorship.

TITLE IV--GENERAL AUTHORITIES

(Sec. 401) Any sanction or other measure provided for in title I or title II may be suspended for up to 365 days, and renewed for additional 180-day periods, if the President certifies to Congress that North Korea has:

• ceased counterfeiting U.S. currency, and taken significant steps to cease and prevent the laundering of monetary instruments;
• taken significant steps toward verification of its compliance with specified Security Council resolutions;
• taken significant steps toward accounting for and repatriating abducted or unlawfully held citizens of other countries;
• begun to abide by international standards for humanitarian aid distribution and monitoring;
• provided credible assurances that it will not support further acts of international terrorism;
• taken significant and verified steps to improve living conditions in its political prison camps; and
• made significant progress in planning for unrestricted family reunification meetings, including for those individuals among the Korean-American community.

(Sec. 402) Any sanction or other measure provided for in title I or title II shall terminate when the President certifies to Congress that North Korea has met such requirements and has also:

• dismantled its nuclear, chemical, biological, and radiological weapons programs;
• released all political prisoners, including detained North Korean citizens;
• ceased its censorship of peaceful political activity;
• taken significant steps toward establishment of an open and representative society;
• fully accounted for and repatriated all abducted or unlawfully held citizens of all nations; and
• begun to implement a plan of action to address deficiencies in its anti-money laundering regime.

(Sec. 403) Any or all reports required to be submitted to Congress under this Act that are subject to a submission deadline of the same unit of time may be consolidated into a single report.

(Sec. 404) The President is authorized to promulgate such rules and regulations as may be necessary to carry out this Act.

(Sec. 405) No additional funds are authorized to carry out the requirements of this Act.

(Sec. 406) Except as otherwise provided for, this Act and the amendments made by this Act shall take effect upon enactment of this Act.