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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1771 Engrossed in House (EH)]

113th CONGRESS
  2d Session
                                H. R. 1771

_______________________________________________________________________

                                 AN ACT

 
To improve the enforcement of sanctions against the Government of North 
                     Korea, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``North Korea 
Sanctions Enforcement Act of 2014''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
       TITLE I--INVESTIGATIONS, PROHIBITED CONDUCT, AND PENALTIES

Sec. 101. Statement of policy.
Sec. 102. Investigations.
Sec. 103. Briefing to Congress.
Sec. 104. Prohibited conduct and mandatory and discretionary 
                            designation and sanctions authorities.
Sec. 105. Forfeiture of property.
 TITLE II--SANCTIONS AGAINST NORTH KOREAN PROLIFERATION, HUMAN RIGHTS 
                     ABUSES, AND ILLICIT ACTIVITIES

Sec. 201. Determinations with respect to North Korea as a jurisdiction 
                            of primary money laundering concern.
Sec. 202. Ensuring the consistent enforcement of United Nations 
                            Security Council resolutions and financial 
                            restrictions on North Korea.
Sec. 203. Proliferation prevention sanctions.
Sec. 204. Procurement sanctions.
Sec. 205. Enhanced inspections authorities.
Sec. 206. Travel sanctions.
Sec. 207. Exemptions, waivers, and removals of designation.
Sec. 208. Sense of Congress on enforcement of sanctions on North Korea.
                  TITLE III--PROMOTION OF HUMAN RIGHTS

Sec. 301. Information technology.
Sec. 302. Report on North Korean prison camps.
Sec. 303. Report on persons who are responsible for serious human 
                            rights abuses or censorship in North Korea.
                     TITLE IV--GENERAL AUTHORITIES

Sec. 401. Suspension of sanctions and other measures.
Sec. 402. Termination of sanctions and other measures.
Sec. 403. Regulations.
Sec. 404. Effective date.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The Government of North Korea has repeatedly violated 
        its commitments to the complete, verifiable, irreversible 
        dismantlement of its nuclear weapons programs, and has 
        willfully violated multiple United Nations Security Council 
        resolutions calling for it to cease its development, testing, 
        and production of weapons of mass destruction.
            (2) North Korea poses a grave risk for the proliferation of 
        nuclear weapons and other weapons of mass destruction.
            (3) The Government of North Korea has been implicated 
        repeatedly in money laundering and illicit activities, 
        including prohibited arms sales, narcotics trafficking, the 
        counterfeiting of United States currency, and the 
        counterfeiting of intellectual property of United States 
        persons.
            (4) The Government of North Korea has, both historically 
        and recently, repeatedly sponsored acts of international 
        terrorism, including attempts to assassinate defectors and 
        human rights activists, repeated threats of violence against 
        foreign persons, leaders, newspapers, and cities, and the 
        shipment of weapons to terrorists.
            (5) North Korea has unilaterally withdrawn from the 1953 
        Armistice Agreement that ended the Korean War, and committed 
        provocations against South Korea in 2010 by sinking the warship 
        Cheonan and killing 46 of her crew, and by shelling Yeonpyeong 
        Island, killing four South Koreans.
            (6) North Korea maintains a system of brutal political 
        prison camps that contain as many as 120,000 men, women, and 
        children, who live in atrocious living conditions with 
        insufficient food, clothing, and medical care, and under 
        constant fear of torture or arbitrary execution.
            (7) The Congress reaffirms the purposes of the North Korean 
        Human Rights Act of 2004 contained in section 4 of such Act (22 
        U.S.C. 7802).
            (8) North Korea has prioritized weapons programs and the 
        procurement of luxury goods, in defiance of United Nations 
        Security Council resolutions, and in gross disregard of the 
        needs of its people.
            (9) Persons, including financial institutions, who engage 
        in transactions with, or provide financial services to, the 
        Government of North Korea and its financial institutions 
        without establishing sufficient financial safeguards against 
        North Korea's use of these transactions to promote 
        proliferation, weapons trafficking, human rights violations, 
        illicit activity, and the purchase of luxury goods, aid and 
        abet North Korea's misuse of the international financial 
        system, and also violate the intent of relevant United Nations 
        Security Council resolutions.
            (10) The Government of North Korea's conduct poses an 
        imminent threat to the security of the United States and its 
        allies, to the global economy, to the safety of members of the 
        United States armed forces, to the integrity of the global 
        financial system, to the integrity of global nonproliferation 
        programs, and to the people of North Korea.
            (11) The Congress seeks, through this legislation, to use 
        nonmilitary means to address this crisis, to provide diplomatic 
        leverage to negotiate necessary changes in North Korea's 
        conduct, and to ease the suffering of the people of North 
        Korea.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Applicable executive order.--The term ``applicable 
        Executive order'' means--
                    (A) Executive Order No. 13382 (2005), 13466 (2008), 
                13551 (2010), or 13570 (2011), to the extent that such 
                Executive order authorizes the imposition of sanctions 
                on persons for conduct, or prohibits transactions or 
                activities, involving the Government of North Korea; or
                    (B) any Executive order adopted on or after the 
                date of the enactment of this Act, to the extent that 
                such Executive order authorizes the imposition of 
                sanctions on persons for conduct, or prohibits 
                transactions or activities, involving the Government of 
                North Korea.
            (2) Applicable united nations security council 
        resolution.--The term ``applicable United Nations Security 
        Council resolution'' means--
                    (A) United Nations Security Council Resolution 1695 
                (2006), 1718 (2006), 1874 (2009), 2087 (2013), or 2094 
                (2013); or
                    (B) any United Nations Security Council resolution 
                adopted on or after the date of the enactment of this 
                Act, to the extent that such resolution authorizes the 
                imposition of sanctions on persons for conduct, or 
                prohibits transactions or activities, involving the 
                Government of North Korea.
            (3) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Foreign Affairs, the Committee 
                on Ways and Means, and the Committee on Financial 
                Services of the House of Representatives; and
                    (B) the Committee on Foreign Relations and the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate.
            (4) Designated person.--The term ``designated person'' 
        means a person designated under subsection (a) or (b) of 
        section 104 for purposes of applying one or more of the 
        sanctions described in title I or II of this Act with respect 
        to the person.
            (5) Government of north korea.--The term ``Government of 
        North Korea'' means--
                    (A) the Government of the Democratic People's 
                Republic of Korea or any political subdivision, agency, 
                or instrumentality thereof; and
                    (B) any person owned or controlled by, or acting 
                for or on behalf of, the Government of the Democratic 
                People's Republic of Korea.
            (6) International terrorism.--The term ``international 
        terrorism'' has the meaning given such term in section 140(d) 
        of the Foreign Relations Authorization Act, Fiscal Years 1988 
        and 1989 (22 U.S.C. 2656f(d)).
            (7) Luxury goods.--The term ``luxury goods'' has the 
        meaning given such term in subpart 746.4 of title 15, Code of 
        Federal Regulations, and includes the items listed in 
        Supplement No. 1 to such regulation, and any similar items.
            (8) Monetary instrument.--The term ``monetary instrument'' 
        has the meaning given such term under section 5312 of title 31, 
        United States Code.
            (9) North korean financial institution.--The term ``North 
        Korean financial institution'' means--
                    (A) a financial institution organized under the 
                laws of North Korea or any jurisdiction within North 
                Korea (including a foreign branch of such institution);
                    (B) any financial institution located in North 
                Korea, except as may be excluded from such definition 
                by the President in accordance with section 207(d);
                    (C) any financial institution, wherever located, 
                owned or controlled by the Government of North Korea; 
                and
                    (D) any financial institution, wherever located, 
                owned or controlled by a financial institution 
                described in subparagraph (A), (B), or (C).
            (10) Other stores of value.--The term ``other stores of 
        value'' means--
                    (A) prepaid access devices, tangible or intangible 
                prepaid access devices, or other instruments or devices 
                for the storage or transmission of value, as defined in 
                part 1010 of title 31, Code of Federal Regulations; and
                    (B) any covered goods, as defined in section 
                1027.100 of title 31, Code of Federal Regulations, and 
                any instrument or tangible or intangible access device 
                used for the storage and transmission of a 
                representation of covered goods, or other device, as 
                defined in section 1027.100 of title 31, Code of 
                Federal Regulations.
            (11) Person.--The term ``person'' means--
                    (A) a natural person;
                    (B) a corporation, business association, 
                partnership, society, trust, financial institution, 
                insurer, underwriter, guarantor, and any other business 
                organization, any other nongovernmental entity, 
                organization, or group, and any governmental entity 
                operating as a business enterprise; and
                    (C) any successor to any entity described in 
                subparagraph (B).

       TITLE I--INVESTIGATIONS, PROHIBITED CONDUCT, AND PENALTIES

SEC. 101. STATEMENT OF POLICY.

    In order to achieve the peaceful disarmament of North Korea, 
Congress finds that it is necessary--
            (1) to encourage all states to fully and promptly implement 
        United Nations Security Council Resolution 2094 (2013);
            (2) to sanction the persons, including financial 
        institutions, that facilitate proliferation, illicit 
        activities, arms trafficking, imports of luxury goods, serious 
        human rights abuses, cash smuggling, and censorship by the 
        Government of North Korea;
            (3) to authorize the President to sanction persons who fail 
        to exercise due diligence to ensure that such financial 
        institutions and jurisdictions do not facilitate proliferation, 
        arms trafficking, kleptocracy, and imports of luxury goods by 
        the Government of North Korea;
            (4) to deny the Government of North Korea access to the 
        funds it uses to obtain nuclear weapons, ballistic missiles, 
        and luxury goods instead of providing for the needs of its 
        people; and
            (5) to enforce sanctions in a manner that avoids any 
        adverse humanitarian impact on the people of North Korea.

SEC. 102. INVESTIGATIONS.

    The President shall initiate an investigation into the possible 
designation of a person under section 104(a) upon receipt by the 
President of credible information indicating that such person has 
engaged in conduct described in section 104(a).

SEC. 103. BRIEFING TO CONGRESS.

    Not later than 180 days after the date of the enactment of this 
Act, and periodically thereafter, the President shall provide to the 
appropriate congressional committees a briefing on efforts to implement 
this Act, to include the following, to the extent the information is 
available:
            (1) The principal foreign assets and sources of foreign 
        income of the Government of North Korea.
            (2) A list of the persons designated under subsections (a) 
        and (b) of section 104.
            (3) A list of the persons with respect to which sanctions 
        were waived or removed under section 207.
            (4) A summary of any diplomatic efforts made in accordance 
        with section 202(b) and of the progress realized from such 
        efforts, 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. PROHIBITED CONDUCT AND MANDATORY AND DISCRETIONARY 
              DESIGNATION AND SANCTIONS AUTHORITIES.

    (a) Prohibited Conduct and Mandatory Designation and Sanctions 
Authority.--
            (1) Conduct described.--Except as provided in section 207, 
        the President shall designate under this subsection any person 
        the President determines to--
                    (A) have 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 (including missiles capable of 
                delivering such weapons), including any efforts to 
                manufacture, acquire, possess, develop, transport, 
                transfer, or use such items;
                    (B) have knowingly imported, exported, or 
                reexported to, into, or from North Korea any arms or 
                related materiel, whether directly or indirectly;
                    (C) have knowingly provided significant training, 
                advice, or other services or assistance, or engaged in 
                transactions, related to the manufacture, maintenance, 
                or use of any 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, whether 
                directly or indirectly;
                    (D) have knowingly, directly or indirectly, 
                imported, exported, or reexported significant luxury 
                goods to or into North Korea;
                    (E) have knowingly 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 or broadcast media, or the facilitation 
                or support of intentional frequency manipulation that 
                would jam or restrict an international signal;
                    (F) have knowingly engaged in or been responsible 
                for serious human rights abuses by the Government of 
                North Korea, including torture or cruel, inhuman, or 
                degrading treatment or punishment, prolonged detention 
                without charges and trial, causing the disappearance of 
                persons by the abduction and clandestine detention of 
                those persons, and other denial of the right to life, 
                liberty, or the security of a person;
                    (G) have knowingly, directly or indirectly, engaged 
                in significant acts of money laundering, the 
                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 official thereof, whether 
                directly or indirectly; or
                    (H) have knowingly attempted to engage in any of 
                the conduct described in subparagraphs (A) through (G) 
                of this paragraph.
            (2) Effect of designation.--With respect to any person 
        designated under this subsection, the President--
                    (A) shall exercise the authorities of the 
                International Emergency Economic Powers Act (50 U.S.C. 
                1705 et seq.) without regard to section 202 of such Act 
                to block all property and interests in property of any 
                person designated under this subsection that are in the 
                United States, that hereafter come within the United 
                States, or that are or hereafter come within the 
                possession or control of any United States person, 
                including any overseas branch; and
                    (B) may apply any of the sanctions described in 
                sections 204, 205(c), and 206.
            (3) Penalties.--The penalties provided for in section 206 
        of the International Emergency Economic Powers Act (50 U.S.C. 
        1705) shall apply to a person who violates, attempts to 
        violate, conspires to violate, or causes a violation of any 
        prohibition of this subsection, or of an order or regulation 
        prescribed under this Act, to the same extent that such 
        penalties apply to a person that commits an unlawful act 
        described in section 206(a) of that Act (50 U.S.C. 1705(a)).
    (b) Discretionary Designation and Sanctions Authority.--
            (1) Conduct described.--Except as provided in section 207, 
        the President may designate under this subsection any person 
        the President determines to--
                    (A) have knowingly engaged in, contributed to, 
                assisted, sponsored, or provided financial, material or 
                technological support for, or goods and services in 
                support of, any violation of, or evasion of, an 
                applicable United Nations Security Council resolution;
                    (B) have knowingly facilitated the transfer of any 
                funds, financial assets, or economic resources of, or 
                property or interests in property of a person 
                designated under an applicable Executive order, or by 
                the United Nations Security Council pursuant to an 
                applicable United Nations Security Council resolution;
                    (C) have knowingly facilitated the transfer of any 
                funds, financial assets, or economic resources, or any 
                property or interests in property derived from, 
                involved in, or that has materially contributed to 
                conduct prohibited by subsection (a) or an applicable 
                United Nations Security Council resolution;
                    (D) have knowingly facilitated any transaction that 
                contributes materially to a violation of an applicable 
                United Nations Security Council resolution;
                    (E) have knowingly facilitated any transactions in 
                cash or monetary instruments or other stores of value, 
                including through cash couriers transiting to or from 
                North Korea, used to facilitate any conduct prohibited 
                by an applicable United Nations Security Council 
                resolution;
                    (F) have knowingly contributed to the bribery of an 
                official of the Government of North Korea, the 
                misappropriation, theft, or embezzlement of public 
                funds by, or for the benefit of, an official of the 
                Government of North Korea, or the use of any proceeds 
                of any such conduct; or
                    (G) have knowingly and materially assisted, 
                sponsored, or provided financial, material, or 
                technological support for, or goods or services to or 
                in support of, the conduct described in subparagraphs 
                (A) through (F) of this paragraph or the conduct 
                described in subparagraphs (A) through (G) of 
                subsection (a)(1).
            (2) Effect of designation.--With respect to any person 
        designated under this subsection, the President--
                    (A) may apply the sanctions described in section 
                204;
                    (B) may apply any of the special measures described 
                in section 5318A of title 31, United States Code;
                    (C) may prohibit any transactions in foreign 
                exchange that are subject to the jurisdiction of the 
                United States and in which such person has any 
                interest;
                    (D) may prohibit any transfers of credit or 
                payments between financial institutions or by, through, 
                or to any financial institution, to the extent that 
                such transfers or payments are subject to the 
                jurisdiction of the United States and involve any 
                interest of the person; and
                    (E) may exercise the authorities of the 
                International Emergency Economic Powers Act (50 U.S.C. 
                1705 et seq.) without regard to section 202 of such Act 
                to block any property and interests in property of the 
                person that are in the United States, that hereafter 
                come within the United States, or that are or hereafter 
                come within the possession or control of any United 
                States person, including any overseas branch.
    (c) Blocking of All Property and Interests in Property of the 
Government of North Korea.--The President shall exercise the 
authorities of the International Emergency Economic Powers Act (50 
U.S.C. 1705 et seq.) without regard to section 202 of such Act to block 
all property and interests in property of the Government of North Korea 
that are in the United States, that hereafter come within the United 
States, or that are or hereafter come within the possession or control 
of any United States person, including any overseas branch.
    (d) Application.--The designation of a person and the blocking of 
property and interests in property under subsection (a), (b), or (c) 
shall also apply with respect to a person who is determined to be owned 
or controlled by, or to have acted or purported to act for or on behalf 
of, directly or indirectly, any person whose property and interests in 
property are blocked pursuant to this section.
    (e) Transaction Licensing.--The President shall deny or revoke any 
license for any transaction that, in the determination of the 
President, lacks sufficient financial controls to ensure that such 
transaction will not facilitate any of the conduct described in 
subsection (a) or subsection (b).

SEC. 105. FORFEITURE OF PROPERTY.

    (a) Amendment to Property Subject to Forfeiture.--Section 981(a)(1) 
of title 18, United States Code, is amended by adding at the end the 
following new subparagraph:
            ``(I) Any property, real or personal, that is involved in a 
        violation or attempted violation, or which constitutes or is 
        derived from proceeds traceable to a violation, of section 
        104(a) of the North Korea Sanctions Enforcement Act of 2014.''.
    (b) Amendment to Definition of Civil Forfeiture Statute.--Section 
983(i)(2)(D) of title 18, United States Code, is amended--
            (1) by striking ``or the International Emergency Economic 
        Powers Act'' and inserting ``, the International Emergency 
        Economic Powers Act''; and
            (2) by adding at the end before the semicolon the 
        following: ``, or the North Korea Sanctions Enforcement Act of 
        2014''.
    (c) Amendment to Definition of Specified Unlawful Activity.--
Section 1956(c)(7)(D) of title 18, United States Code, is amended--
            (1) by striking ``or section 92 of the Atomic Energy Act of 
        1954'' and inserting ``section 92 of the Atomic Energy Act of 
        1954''; and
            (2) by adding at the end the following: ``, or section 
        104(a) of the North Korea Sanctions Enforcement Act of 2014''.

 TITLE II--SANCTIONS AGAINST NORTH KOREAN PROLIFERATION, HUMAN RIGHTS 
                     ABUSES, AND ILLICIT ACTIVITIES

SEC. 201. DETERMINATIONS WITH RESPECT TO NORTH KOREA AS A JURISDICTION 
              OF PRIMARY MONEY LAUNDERING CONCERN.

    (a) Findings.--Congress makes the following findings:
            (1) 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:
                    (A) 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.''.
                    (B) 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.''.
                    (C) 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.
            (2) 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--
                    (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 these regimes and 
                the serious threat they pose to the integrity of the 
                international financial system;
                    (C) 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;
                    (D) 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
                    (E) 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.
            (3) On March 7, 2013, the United Nations Security Council 
        unanimously adopted Resolution 2094, which--
                    (A) welcomed the Financial Action Task Force's 
                recommendation on financial sanctions related to 
                proliferation, and its guidance on the implementation 
                of sanctions;
                    (B) 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
                    (C) 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.
    (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 limitations on, and require enhanced 
        monitoring of, transactions involving North Korean financial 
        institutions that could contribute to sanctioned activities;
            (2) urges the President, in the strongest terms, to 
        consider immediately designating 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
            (3) 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.
    (c) Determinations Regarding North Korea.--
            (1) In general.--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.
            (2) Enhanced due diligence and reporting requirements.--
        Except as provided in section 207, 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.
            (3) Report required.--
                    (A) In general.--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.
                    (B) Form.--A report or copy of any report submitted 
                under this paragraph shall be submitted in unclassified 
                form but may contain a classified annex.

SEC. 202. ENSURING THE CONSISTENT ENFORCEMENT OF UNITED NATIONS 
              SECURITY COUNCIL RESOLUTIONS AND FINANCIAL RESTRICTIONS 
              ON NORTH KOREA.

    (a) Findings.--Congress finds that--
            (1) all states and jurisdictions are obligated to implement 
        and enforce applicable United Nations Security Council 
        resolutions fully and promptly, including by--
                    (A) blocking the property of, and ensuring that any 
                property is prevented from being made available to, 
                persons designated by the Security Council under 
                applicable United Nations Security Council resolutions;
                    (B) blocking any property associated with an 
                activity prohibited by applicable United Nations 
                Security Council resolutions; and
                    (C) preventing any transfer of property and any 
                provision of financial services that could contribute 
                to an activity prohibited by applicable United Nations 
                Security Council resolutions, or to the evasion of 
                sanctions under such resolutions;
            (2) all states and jurisdictions share a common interest in 
        protecting the international financial system from the risks of 
        money laundering and illicit transactions emanating from North 
        Korea;
            (3) the United States Dollar and the Euro are the world's 
        principal reserve currencies, and the United States and the 
        European Union are primarily responsible for the protection of 
        the international financial system from these risks;
            (4) the cooperation of the People's Republic of China, as 
        North Korea's principal trading partner, is essential to the 
        enforcement of applicable United Nations Security Council 
        resolutions and to the protection of the international 
        financial system;
            (5) the report of the Panel of Experts established pursuant 
        to United Nations Security Council Resolution 1874, dated June 
        11, 2013, expressed concern about the ability of banks in 
        states with less effective regulators and those unable to 
        afford effective compliance to detect and prevent illicit 
        transfers involving North Korea;
            (6) North Korea has historically exploited inconsistencies 
        between jurisdictions in the interpretation and enforcement of 
        financial regulations and applicable United Nations Security 
        Council resolutions to circumvent sanctions and launder the 
        proceeds of illicit activities;
            (7) Amroggang Development Bank, Bank of East Land, and 
        Tanchon Commercial Bank have been designated by the Secretary 
        of the Treasury, the United Nations Security Council, and the 
        European Union;
            (8) Korea Daesong Bank and Korea Kwangson Banking 
        Corporation have been designated by the Secretary of the 
        Treasury and the European Union;
            (9) the Foreign Trade Bank of North Korea has been 
        designated by the Secretary of the Treasury for facilitating 
        transactions on behalf of persons linked to its proliferation 
        network, and for serving as ``a key financial node''; and
            (10) Daedong Credit Bank has been designated by the 
        Secretary of the Treasury for activities prohibited by 
        applicable United Nations Security Council resolutions, 
        including the use of deceptive financial practices to 
        facilitate transactions on behalf of persons linked to North 
        Korea's proliferation network.
    (b) Sense of Congress.--It is the sense of Congress that the 
President should intensify diplomatic efforts, both in appropriate 
international fora such as the United Nations and bilaterally, to 
develop and implement a coordinated, consistent, multilateral strategy 
for protecting the global financial system against risks emanating from 
North Korea, including--
            (1) the cessation of any financial services whose 
        continuation is inconsistent with applicable United Nations 
        Security Council resolutions;
            (2) the cessation of any financial services to persons, 
        including financial institutions, that present unacceptable 
        risks of facilitating money laundering and illicit activity by 
        the Government of North Korea;
            (3) the blocking by all states and jurisdictions, in 
        accordance with the legal process of the state or jurisdiction 
        in which the property is held, of any property required to be 
        blocked under applicable United Nations Security Council 
        resolutions; and
            (4) the blocking of any property derived from illicit 
        activity, or from the misappropriation, theft, or embezzlement 
        of public funds by, or for the benefit of, officials of the 
        Government of North Korea.

SEC. 203. PROLIFERATION PREVENTION SANCTIONS.

    (a) Export of Certain Goods or Technology.--
            (1) In general.--Subject to section 207(a)(2)(C) of this 
        Act, a license shall be required for the export to North Korea 
        of any goods or technology subject to the Export Administration 
        Regulations (part 730 of title 15, Code of Federal Regulations) 
        without regard to whether the Secretary of State has designated 
        North Korea as a country the government of which has provided 
        support for acts of international terrorism, as determined by 
        the Secretary of State under section 6(j) of the Export 
        Administration Act of 1979 (50 U.S.C. App. 2045), as continued 
        in effect under the International Emergency Economic Powers 
        Act.
            (2) Presumption of denial.--A license for the export to 
        North Korea of any goods or technology as described in 
        paragraph (1) shall be subject to a presumption of denial.
    (b) Transactions With Countries Supporting Acts of International 
Terrorism.--The prohibitions and restrictions described in section 40 
of the Arms Export Control Act (22 U.S.C. 2780), and other provisions 
in that Act, shall also apply to exporting or otherwise providing (by 
sale, lease or loan, grant, or other means), directly or indirectly, 
any munitions item to the Government of North Korea without regard to 
whether or not North Korea is a country with respect to which 
subsection (d) of such section (relating to designation of state 
sponsors of terrorism) applies.
    (c) Transactions in Lethal Military Equipment.--
            (1) In general.--The President shall withhold assistance 
        under the Foreign Assistance Act of 1961 (22 U.S.C. 2151 et 
        seq.) to any country that provides lethal military equipment 
        to, or receives lethal military equipment from, the Government 
        of North Korea.
            (2) Applicability.--The prohibition under this subsection 
        with respect to a country shall terminate on the date that is 1 
        year after the date on which such country ceases to provide 
        lethal military equipment to the Government of North Korea.
            (3) Waiver.--The President may waive the prohibition under 
        this subsection with respect to a country if the President 
        determines that it is in the national interest of the United 
        States to do so.

SEC. 204. PROCUREMENT SANCTIONS.

    (a) In General.--Except as provided in this section, the United 
States Government may not procure, or enter into any contract for the 
procurement of, any goods or services from any designated person.
    (b) FAR.--The Federal Acquisition Regulation issued pursuant to 
section 1303 of title 41, United States Code, shall be revised to 
require a certification from each person that is a prospective 
contractor that such person does not engage in any of the conduct 
described in section 104(a). Such revision shall apply with respect to 
contracts in an amount greater than the simplified acquisition 
threshold (as defined in section 134 of title 41, United States Code) 
for which solicitations are issued on or after the date that is 90 days 
after the date of the enactment of this Act.
    (c) Termination of Contracts and Initiation of Suspension and 
Debarment Proceeding.--
            (1) Termination of contracts.--Except as provided in 
        paragraph (2), the head of an executive agency shall terminate 
        a contract with a person who has provided a false certification 
        under subsection (b).
            (2) Waiver.--The head of an executive agency may waive the 
        requirement under paragraph (1) with respect to a person based 
        upon a written finding of urgent and compelling circumstances 
        significantly affecting the interests of the United States. If 
        the head of an executive agency waives the requirement under 
        paragraph (1) for a person, the head of the agency shall submit 
        to the appropriate congressional committees, within 30 days 
        after the waiver is made, a report containing the rationale for 
        the waiver and relevant information supporting the waiver 
        decision.
            (3) Initiation of suspension and debarment proceeding.--The 
        head of an executive agency shall initiate a suspension and 
        debarment proceeding against a person who has provided a false 
        certification under subsection (b). Upon determination of 
        suspension, debarment, or proposed debarment, the agency shall 
        ensure that such person is entered into the Government-wide 
        database containing the list of all excluded parties ineligible 
        for Federal programs pursuant to Executive Order No. 12549 (31 
        U.S.C. 6101 note; relating to debarment and suspension) and 
        Executive Order No. 12689 (31 U.S.C. 6101 note; relating to 
        debarment and suspension).
    (d) Clarification Regarding Certain Products.--The remedies 
specified in subsections (a) through (c) shall not apply with respect 
to the procurement of eligible products, as defined in section 308(4) 
of the Trade Agreements Act of 1979 (19 U.S.C. 2518(4)), of any foreign 
country or instrumentality designated under section 301(b) of such Act 
(19 U.S.C. 2511(b)).
    (e) Rule of Construction.--Nothing in this subsection may be 
construed to limit the use of other remedies available to the head of 
an executive agency or any other official of the Federal Government on 
the basis of a determination of a false certification under subsection 
(b).
    (f) Executive Agency Defined.--In this section, the term 
``executive agency'' has the meaning given such term in section 133 of 
title 41, United States Code.

SEC. 205. ENHANCED INSPECTIONS AUTHORITIES.

    (a) Report Required.--Not later than 180 days after the date of the 
enactment of this Act, and every 180 days thereafter, the President, 
acting through the Secretary of Homeland Security, shall submit to the 
appropriate congressional committees, the Committee on Homeland 
Security of the House of Representatives, and the Committee on Homeland 
Security and Governmental Affairs of the Senate, a report identifying 
foreign sea ports and airports whose inspections of ships, aircraft, 
and conveyances originating in North Korea, carrying North Korean 
property, or operated by the Government of North Korea are deficient to 
effectively prevent the facilitation of any of the activities described 
in section 104(a).
    (b) Enhanced Security Targeting Requirements.--Not later than 180 
days after the identification of any sea port or airport pursuant to 
subsection (a), the Secretary of Homeland Security shall, utilizing the 
Automated Targeting System operated by the National Targeting Center in 
U.S. Customs and Border Protection, require 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 sea port or airport if there are reasonable 
grounds to believe that such cargo contains goods prohibited under this 
Act.
    (c) Seizure and Forfeiture.--A vessel, aircraft, or conveyance used 
to facilitate any of the activities described in section 104(a) that 
comes within the jurisdiction of the United States may be seized and 
forfeited under chapter 46 of title 18, United States Code, or under 
the Tariff Act of 1930.

SEC. 206. TRAVEL SANCTIONS.

    (a) Aliens Ineligible for Visas, Admission, or Parole.--
            (1) Visas, admission, or parole.--An alien (or an alien who 
        is a corporate officer of a person (as defined in subparagraph 
        (B) or (C) of section 3(11)) who the Secretary of State or the 
        Secretary of Homeland Security (or a designee of one of such 
        Secretaries) knows, or has reasonable grounds to believe, is 
        described in subsection (a)(1) or (b)(1) of section 104 is--
                    (A) inadmissible to the United States;
                    (B) ineligible to receive a visa or other 
                documentation to enter the United States; and
                    (C) otherwise ineligible to be admitted or paroled 
                into the United States or to receive any other benefit 
                under the Immigration and Nationality Act (8 U.S.C. 
                1101 et seq.).
            (2) Current visas revoked.--
                    (A) In general.--The issuing consular officer, the 
                Secretary of State, or the Secretary of Homeland 
                Security (or a designee of one of such Secretaries) 
                shall revoke any visa or other entry documentation 
                issued to an alien who is described in subsection 
                (a)(1) or (b)(1) of section 104 regardless of when 
                issued.
                    (B) Effect of revocation.--A revocation under 
                subparagraph (A)--
                            (i) shall take effect immediately; and
                            (ii) shall automatically cancel any other 
                        valid visa or entry documentation that is in 
                        the alien's possession.
    (b) Exception To Comply With United Nations Headquarters 
Agreement.--Sanctions under subsection (a)(1)(B) shall not apply to an 
alien if admitting the alien into the United States is necessary to 
permit the United States to comply with the Agreement regarding the 
Headquarters of the United Nations, signed at Lake Success June 26, 
1947, and entered into force November 21, 1947, between the United 
Nations and the United States, or other applicable international 
obligations.

SEC. 207. EXEMPTIONS, WAIVERS, AND REMOVALS OF DESIGNATION.

    (a) Exemptions.--
            (1) Mandatory exemptions.--The following activities shall 
        be exempt from sanctions under section 104:
                    (A) Activities subject to the reporting 
                requirements of title V of the National Security Act of 
                1947 (50 U.S.C. 413 et seq.), or to any authorized 
                intelligence activities of the United States.
                    (B) Any transaction necessary to comply with United 
                States obligations under the Agreement between the 
                United Nations and the United States of America 
                regarding the Headquarters of the United Nations, 
                signed June 26, 1947, and entered into force on 
                November 21, 1947, or under the Vienna Convention on 
                Consular Relations, signed April 24, 1963, and entered 
                into force on March 19, 1967, or under other 
                international agreements.
            (2) Discretionary exemptions.--The following activities may 
        be exempt from sanctions under section 104 as determined by the 
        President:
                    (A) Any financial transaction the exclusive purpose 
                for which is to provide humanitarian assistance to the 
                people of North Korea.
                    (B) Any financial transaction the exclusive purpose 
                for which is to import food products into North Korea, 
                if such food items are not defined as luxury goods.
                    (C) Any transaction the exclusive purpose for which 
                is to import agricultural products, medicine, or 
                medical devices into North Korea, provided that such 
                supplies or equipment are classified as designated 
                ``EAR 99'' under the Export Administration Regulations 
                (part 730 of title 15, Code of Federal Regulations) and 
                not controlled under--
                            (i) the Export Administration Act of 1979 
                        (50 U.S.C. App. 2401 et seq.), as continued in 
                        effect under the International Emergency 
                        Economic Powers Act (50 U.S.C. 1701 et seq.);
                            (ii) the Arms Export Control Act (22 U.S.C. 
                        2751 et seq.);
                            (iii) part B of title VIII of the Nuclear 
                        Proliferation Prevention Act of 1994 (22 U.S.C. 
                        6301 et seq.); or
                            (iv) the Chemical and Biological Weapons 
                        Control and Warfare Elimination Act of 1991 (22 
                        U.S.C. 5601 et seq.).
    (b) Waiver.--The President may waive, on a case-by-case basis, the 
imposition of sanctions for a period of not more than one year, and may 
renew that waiver for additional periods of not more than one year, any 
sanction or other measure under section 104, 204, 205, 206, or 303 if 
the President submits to the appropriate congressional committees a 
written determination that the waiver meets one or more of the 
following requirements:
            (1) The waiver is important to the economic or national 
        security interests of the United States.
            (2) The waiver will further the enforcement of this Act or 
        is for an important law enforcement purpose.
            (3) The waiver is for an important humanitarian purpose, 
        including any of the purposes described in section 4 of the 
        North Korean Human Rights Act of 2004 (22 U.S.C. 7802).
    (c) Removals of Sanctions.--The President may prescribe rules and 
regulations for the removal of sanctions on a person that is designated 
under subsection (a) or (b) of section 104 and the removal of 
designations of a person with respect to such sanctions if the 
President determines that the designated person has verifiably ceased 
its participation in any of the conduct described in subsection (a) or 
(b) of section 104, as the case may be, and has given assurances that 
it will abide by the requirements of this Act.
    (d) Financial Services for Certain Activities.--The President may 
promulgate regulations, rules, and policies as may be necessary to 
facilitate the provision of financial services by a foreign financial 
institution that is not controlled by the Government of North Korea in 
support of the activities subject to exemption under this section.

SEC. 208. SENSE OF CONGRESS ON ENFORCEMENT OF SANCTIONS ON NORTH KOREA.

    (a) Findings.--Congress finds the following:
            (1) On March 6, 2014, pursuant to United Nations Security 
        Council Resolution 1874, a Panel of Experts issued a report 
        assessing the enforcement of existing sanctions on North Korea. 
        The Panel reported that North Korea continues to ``trade in 
        arms and related materiel in violation of the resolutions'' and 
        that ``there is no question that it is one of the country's 
        most profitable revenue sources''.
            (2) The Panel of Experts found that North Korea ``presents 
        a stiff challenge to Member States'' through ``multiple and 
        tiered circumvention techniques'' and ``is experienced in 
        actions it takes to evade sanctions''.
    (b) Sense of Congress.--It is the sense of Congress that the United 
States should work to increase the capacity of responsible nations to 
implement United Nations Security Council Resolutions 1695, 1718, 1874, 
2087, and 2094, including to strengthen the capacity of responsible 
nations to monitor and interdict shipments to and from North Korea that 
contribute to prohibited activities under such Resolutions.

                  TITLE III--PROMOTION OF HUMAN RIGHTS

SEC. 301. INFORMATION TECHNOLOGY.

    Section 104 of the North Korean Human Rights Act of 2004 (22 U.S.C. 
7814) is amended by inserting after subsection (c) the following new 
subsection:
    ``(d) Information Technology Study.--Not later than 180 days after 
the date of the enactment of this subsection, the President shall 
submit to the appropriate congressional committees a classified report 
setting forth a detailed plan for making unrestricted, unmonitored, and 
inexpensive electronic mass communications available to the people of 
North Korea.''.

SEC. 302. REPORT ON NORTH KOREAN PRISON CAMPS.

    (a) In General.--The Secretary of State shall submit to the 
appropriate congressional committees a report describing, with respect 
to each political prison camp in North Korea to the extent information 
is available--
            (1) the camp's estimated prisoner population;
            (2) the camp's geographical coordinates;
            (3) the reasons for confinement of the prisoners;
            (4) the camp's primary industries and products, and the end 
        users of any goods produced in such camp;
            (5) the natural persons and agencies responsible for 
        conditions in the camp;
            (6) the conditions under which prisoners are confined, with 
        respect to the adequacy of food, shelter, medical care, working 
        conditions, and reports of ill-treatment of prisoners; and
            (7) imagery, to include satellite imagery of each such 
        camp, in a format that, if published, would not compromise the 
        sources and methods used by the intelligence agencies of the 
        United States to capture geospatial imagery.
    (b) Form.--The report required under subsection (a) may be included 
in the first report required to be submitted to Congress after the date 
of the enactment of this Act under sections 116(d) and 502B(b) of the 
Foreign Assistance Act of 1961 (22 U.S.C. 2151n(d) and 2304(b)) 
(relating to the annual human rights report).

SEC. 303. REPORT ON PERSONS WHO ARE RESPONSIBLE FOR SERIOUS HUMAN 
              RIGHTS ABUSES OR CENSORSHIP IN NORTH KOREA.

    (a) In General.--The Secretary of State shall submit to the 
appropriate congressional committees a report that contains an 
identification of each person the Secretary determines to be 
responsible for serious human rights abuses or censorship in North 
Korea and a description of such abuses or censorship engaged in by such 
person.
    (b) Consideration.--In preparing the report required under 
subsection (a), the Secretary of State shall give due consideration to 
the findings of the United Nations Commission of Inquiry on Human 
Rights in North Korea, and shall make specific findings with respect to 
the responsibility of Kim Jong Un, and of each natural person who is a 
member of the National Defense Commission of North Korea, or the 
Organization and Guidance Department of the Workers' Party of Korea, 
for serious human rights abuses and censorship.
    (c) Designation of Persons.--The President shall designate under 
section 104(a) any person listed in the report required under 
subsection (a) as responsible for serious human rights abuses or 
censorship in North Korea.
    (d) Submission and Form.--
            (1) Submission.--The report required under subsection (a) 
        shall be submitted not later than 90 days after the date of the 
        enactment of this Act, and every 180 days thereafter for a 
        period not to exceed 3 years, shall be included in each report 
        required under sections 116(d) and 502B(b) of the Foreign 
        Assistance Act of 1961 (22 U.S.C. 2151n(d) and 2304(b)) 
        (relating to the annual human rights report).
            (2) Form.--The report required under subsection (a) shall 
        be submitted in unclassified form, but may include a classified 
        annex. The Secretary of State shall also publish the 
        unclassified part of the report on the Department of State's 
        website.

                     TITLE IV--GENERAL AUTHORITIES

SEC. 401. SUSPENSION OF SANCTIONS AND OTHER MEASURES.

    (a) In General.--Any sanction or other measure required by title I, 
II, or III of this Act (or any amendment made by title I, II, or III of 
this Act) may be suspended for up to 365 days upon certification by the 
President to the appropriate congressional committees that the 
Government of North Korea has--
            (1) verifiably ceased its counterfeiting of United States 
        currency, including the surrender or destruction of specialized 
        materials and equipment used for or particularly suitable for 
        counterfeiting;
            (2) taken significant steps toward financial transparency 
        to comply with generally accepted protocols to cease and 
        prevent the laundering of monetary instruments;
            (3) taken significant steps toward verification of its 
        compliance with United Nations Security Council Resolutions 
        1695, 1718, 1874, 2087, and 2094;
            (4) taken significant steps toward accounting for and 
        repatriating the citizens of other countries abducted or 
        unlawfully held captive by the Government of North Korea or 
        detained in violation of the 1953 Armistice Agreement;
            (5) accepted and begun to abide by internationally 
        recognized standards for the distribution and monitoring of 
        humanitarian aid;
            (6) provided credible assurances that it will not support 
        further acts of international terrorism;
            (7) taken significant and verified steps to improve living 
        conditions in its political prison camps; and
            (8) made significant progress in planning for unrestricted 
        family reunification meetings, including for those individuals 
        among the two million strong Korean-American community who 
        maintain family ties with relatives in North Korea.
    (b) Renewal of Suspension.--The suspension described in subsection 
(a) may be renewed for additional consecutive periods of 180 days upon 
certification by the President to the appropriate congressional 
committees that the Government of North Korea has continued to comply 
with the conditions described in subsection (a) during the previous 
year.

SEC. 402. TERMINATION OF SANCTIONS AND OTHER MEASURES.

    Any sanction or other measure required by title I, II, or III of 
this Act (or any amendment made by title I, II, or III of this Act) 
shall terminate on the date on which the President determines and 
certifies to the appropriate congressional committees that the 
Government of North Korea has met the requirements of section 401, and 
has also--
            (1) completely, verifiably, and irreversibly dismantled all 
        of its nuclear, chemical, biological, and radiological weapons 
        programs, including all programs for the development of systems 
        designed in whole or in part for the delivery of such weapons;
            (2) released all political prisoners, including the 
        citizens of North Korea detained in North Korea's political 
        prison camps;
            (3) ceased its censorship of peaceful political activity;
            (4) taken significant steps toward the establishment of an 
        open, transparent, and representative society;
            (5) fully accounted for and repatriated all citizens of all 
        nations abducted or unlawfully held captive by the Government 
        of North Korea or detained in violation of the 1953 Armistice 
        Agreement; and
            (6) agreed with the Financial Action Task Force on a plan 
        of action to address deficiencies in its anti-money laundering 
        regime and begun to implement this plan of action.

SEC. 403. REGULATIONS.

    (a) In General.--The President is authorized to promulgate such 
rules and regulations as may be necessary to carry out the provisions 
of this Act (which may include regulatory exceptions), including under 
section 205 of the International Emergency Economic Powers Act (50 
U.S.C. 1704).
    (b) Rule of Construction.--Nothing in this Act or any amendment 
made by this Act shall be construed to limit the authority of the 
President pursuant to an applicable Executive order or otherwise 
pursuant to the International Emergency Economic Powers Act (50 U.S.C. 
1701 et seq.).

SEC. 404. EFFECTIVE DATE.

    Except as otherwise provided in this Act, this Act and the 
amendments made by this Act shall take effect on the date of the 
enactment of this Act.

SEC. 405. OFFSET.

    Section 102(a) of the Enhanced Partnership with Pakistan Act of 
2009 (Public Law 111-73; 22 U.S.C. 8412(a)) is amended by striking 
``$1,500,000,000'' and inserting ``$1,490,000,000''.

            Passed the House of Representatives July 28, 2014.

            Attest:

                                                                 Clerk.
113th CONGRESS

  2d Session

                               H. R. 1771

_______________________________________________________________________

                                 AN ACT

To improve the enforcement of sanctions against the Government of North 
                     Korea, and for other purposes.
```