I 

116TH CONGRESS 

1ST SESSION H. R. 4084 

To impose sanctions with respect to the Democratic People’s Republic of 

Korea, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 26, 2019 

Mr. BARR (for himself and Mr. STIVERS) introduced the following bill; which 

was referred to the Committee on Financial Services 

A BILL 

To impose sanctions with respect to the Democratic People’s 

Republic of Korea, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Otto Warmbier North 

5 Korea Nuclear Sanctions Act of 2019’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 

8 (1) On June 1, 2016, the Department of the 

9 Treasury’s Financial Crimes Enforcement Network 

10 announced a Notice of Finding that the Democratic 


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1 People’s Republic of Korea is a jurisdiction of pri2 mary money laundering concern due to its use of 

3 state-controlled financial institutions and front com4 panies to support the proliferation and development 

5 of weapons of mass destruction (WMD) and ballistic 

6 missiles. 

7 (2) The Financial Action Task Force (FATF) 

8 has expressed serious concerns with the threat posed 

9 by North Korea’s proliferation and financing of 

10 WMD, and has called on FATF members to apply 

11 effective counter-measures to protect their financial 

12 sectors from North Korean money laundering, WMD 

13 proliferation financing, and the financing of ter14 rorism. 

15 (3) In its February 2017 report, the U.N. 

16 Panel of Experts concluded that— 

17 (A) North Korea continued to access the 

18 international financial system in support of il19 licit activities despite sanctions imposed by 

20 U.N. Security Council Resolutions 2270 (2016) 

21 and 2321 (2016); 

22 (B) during the reporting period, no mem23 ber state had reported taking actions to freeze 

24 North Korean assets; and 


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1 (C) sanctions evasion by North Korea, 

2 combined with inadequate compliance by mem3 ber states, had significantly negated the impact 

4 of U.N. Security Council resolutions. 

5 (4) In its September 2017 report, the U.N. 

6 Panel of Experts found that— 

7 (A) North Korea continued to violate fi8 nancial sanctions by using agents acting abroad 

9 on the country’s behalf; 

10 (B) foreign financial institutions provided 

11 correspondent banking services to North Ko12 rean persons and front companies for illicit pur13 poses; 

14 (C) foreign companies violated sanctions by 

15 maintaining links with North Korean financial 

16 institutions; and 

17 (D) North Korea generated at least $270 

18 million during the reporting period through the 

19 violation of sectoral sanctions. 

20 (5) North Korean entities engage in significant 

21 financial transactions through foreign bank accounts 

22 that are maintained by non-North Korean nationals, 

23 thereby masking account users’ identity in order to 

24 access financial services. 


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1 (6) North Korea’s sixth nuclear test on Sep2 tember 3, 2017, demonstrated an estimated explo3 sive power more than 100 times greater than that 

4 generated by its first nuclear test in 2006. 

5 (7) On February 23, 2018, the Department of 

6 the Treasury announced its largest-ever set of North 

7 Korea-related sanctions, with a particular focus on 

8 shipping and trading companies, and issued a mari9 time advisory to highlight North Korea’s sanctions 

10 evasion tactics. On May 9, 2019, the United States 

11 seized a North Korean ship, the Wise Honest, which 

12 had previously been detained by Indonesia for car13 rying coal in violation of United Nations sanctions. 

14 (8) According to the March 2019 Final Report 

15 of the U.N. Panel of Experts, ‘‘The nuclear and bal16 listic missile programmes of the Democratic People’s 

17 Republic of Korea remain intact and the country 

18 continues to defy Security Council resolutions 

19 through a massive increase in illegal ship-to-ship 

20 transfers of petroleum products and coal. These vio21 lations render the latest United Nations sanctions 

22 ineffective by flouting the caps on the import of pe23 troleum products and crude oil by the Democratic 

24 People’s Republic of Korea as well as the coal ban, 

25 imposed in 2017 by the Security Council in response 


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1 to the country’s unprecedented nuclear and ballistic 

2 missile testing.’’. 

3 (9) The U.N. Panel of Experts further con4 cluded: ‘‘Financial sanctions remain some of the 

5 most poorly implemented and actively evaded meas6 ures of the sanctions regime. Individuals empowered 

7 to act as extensions of financial institutions of the 

8 Democratic People’s Republic of Korea operate in at 

9 least five countries with seeming impunity.’’. 

10 (10) North Korea has successfully tested short11 range, submarine-launched, and intercontinental bal12 listic missiles, and is rapidly progressing in its devel13 opment of a nuclear-armed missile that is capable of 

14 reaching United States territory. 

15 SEC. 3. CONDITIONS WITH RESPECT TO CERTAIN AC16 COUNTS AND TRANSACTIONS AT UNITED 

17 STATES FINANCIAL INSTITUTIONS. 

18 (a) CORRESPONDENT AND PAYABLE-THROUGH AC19 COUNTS HELD BY FOREIGN FINANCIAL INSTITUTIONS.— 

20 (1) IN GENERAL.—Not later than 180 days 

21 after the date of the enactment of this Act, the Sec22 retary of the Treasury shall prescribe regulations to 

23 prohibit, or impose strict conditions on, the opening 

24 or maintaining in the United States of a cor25 respondent account or a payable-through account by 


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1 a foreign financial institution that the Secretary 

2 finds knowingly facilitates a significant transaction 

3 or provides significant financial services for a cov4 ered person. 

5 (2) PENALTIES.— 

6 (A) CIVIL PENALTY.—A person who vio7 lates, attempts to violate, conspires to violate, 

8 or causes a violation of regulations prescribed 

9 under this subsection shall be subject to a civil 

10 penalty in an amount not to exceed the greater 

11 of— 

12 (i) $250,000; or 

13 (ii) an amount that is twice the 

14 amount of the transaction that is the basis 

15 of the violation with respect to which the 

16 penalty is imposed. 

17 (B) CRIMINAL PENALTY.—A person who 

18 willfully commits, willfully attempts to commit, 

19 or willfully conspires to commit, or aids or 

20 abets in the commission of, a violation of regu21 lations prescribed under this subsection shall, 

22 upon conviction, be fined not more than 

23 $1,000,000, or if a natural person, may be im24 prisoned for not more than 20 years, or both. 


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1 (b) RESTRICTIONS ON CERTAIN TRANSACTIONS BY

2 UNITED STATES FINANCIAL INSTITUTIONS.— 

3 (1) IN GENERAL.—Not later than 180 days 

4 after the date of the enactment of this Act, the Sec5 retary of the Treasury shall prescribe regulations to 

6 prohibit a United States financial institution, and 

7 any person owned or controlled by a United States 

8 financial institution, from knowingly engaging in a 

9 significant transaction with or benefitting any per10 son that the Secretary finds to be a covered person. 

11 (2) CIVIL PENALTY.—A person who violates, at12 tempts to violate, conspires to violate, or causes a 

13 violation of regulations prescribed under this sub14 section shall be subject to a civil penalty in an 

15 amount not to exceed the greater of— 

16 (A) $250,000; or 

17 (B) an amount that is twice the amount of 

18 the transaction that is the basis of the violation 

19 with respect to which the penalty is imposed. 

20 SEC. 4. OPPOSITION TO ASSISTANCE BY THE INTER21 NATIONAL FINANCIAL INSTITUTIONS AND 

22 THE EXPORT-IMPORT BANK. 

23 (a) INTERNATIONAL FINANCIAL INSTITUTIONS.— 

24 The Bretton Woods Agreements Act (22 U.S.C. 286 et 

25 seq.) is amended by adding at the end the following: 


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1 ‘‘SEC. 73. OPPOSITION TO ASSISTANCE FOR ANY GOVERN2 MENT THAT FAILS TO IMPLEMENT SANC3 TIONS ON NORTH KOREA. 

4 ‘‘(a) IN GENERAL.—The Secretary of the Treasury 

5 shall instruct the United States Executive Director at the 

6 international financial institutions (as defined under sec7 tion 1701(c) of the International Financial Institutions 

8 Act) to use the voice and vote of the United States to 

9 oppose the provision of financial assistance to a foreign 

10 government, other than assistance to support basic human 

11 needs, if the President determines that, in the year pre12 ceding consideration of approval of such assistance, the 

13 government has knowingly failed to prevent the provision 

14 of financial services to, or freeze the funds, financial as15 sets, and economic resources of, a person described under 

16 subparagraphs (A) through (E) of section 8(2) of the Otto 

17 Warmbier North Korea Nuclear Sanctions Act of 2019. 

18 ‘‘(b) WAIVER.—The President may waive subsection 

19 (a) for up to 180 days at a time with respect to a foreign 

20 government if the President reports to Congress that— 

21 ‘‘(1) the foreign government’s failure described 

22 under (a) is due exclusively to a lack of foreign gov23 ernment capacity; 

24 ‘‘(2) the foreign government is taking effective 

25 steps to prevent recurrence of such failure; or 


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1 ‘‘(3) such waiver is vital to the national security 

2 interests of the United States.’’. 

3 (b) EXPORT-IMPORT BANK.—Section 2(b) of the Ex4 port-Import Bank Act of 1945 (12 U.S.C. 635(b)) is 

5 amended by adding at the end the following: 

6 ‘‘(14) PROHIBITION ON SUPPORT INVOLVING

7 PERSONS CONNECTED WITH NORTH KOREA.—The 

8 Bank may not guarantee, insure, or extend credit, or 

9 participate in the extension of credit in connection 

10 with the export of a good or service to a covered per11 son (as defined under section 8 of the Otto 

12 Warmbier North Korea Nuclear Sanctions Act of 

13 2019).’’. 

14 SEC. 5. TREASURY REPORTS ON COMPLIANCE, PENALTIES, 

15 AND TECHNICAL ASSISTANCE. 

16 (a) SEMIANNUAL REPORT.— 

17 (1) IN GENERAL.—Not later than 120 days fol18 lowing the date of the enactment of this Act, and 

19 every 180 days thereafter, the Secretary of the 

20 Treasury shall submit a report to the Committee on 

21 Financial Services of the House of Representatives 

22 and the Committee on Banking, Housing, and 

23 Urban Affairs of the Senate that includes— 

24 (A) a list of financial institutions that, in 

25 the period since the preceding report, knowingly 


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1 facilitated a significant transaction or trans2 actions or provided significant financial services 

3 for a covered person; 

4 (B) a list of any penalties imposed under 

5 section 3 in the period since the preceding re6 port; and 

7 (C) a description of efforts by the Depart8 ment of the Treasury in the period since the 

9 preceding report, through consultations, tech10 nical assistance, or other appropriate activities, 

11 to strengthen the capacity of financial institu12 tions and foreign governments to prevent the 

13 provision of financial services benefitting any 

14 covered person. 

15 (2) FORM OF REPORT; PUBLIC AVAILABILITY.— 

16 (A) FORM.—The report required under 

17 paragraph (1) shall be submitted in unclassified 

18 form but may contain a classified annex. 

19 (B) PUBLIC AVAILABILITY.—The unclassi20 fied portion of such report shall be made avail21 able to the public and posted on the website of 

22 the Department of the Treasury. 

23 (3) SUNSET.—The report requirement under 

24 this subsection shall terminate after the end of the 


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1 5-year period beginning on the date of enactment of 

2 this Act. 

3 (b) TESTIMONY REQUIRED.—Upon request of the 

4 Committee on Financial Services of the House of Rep5 resentatives or the Committee on Banking, Housing, and 

6 Urban Affairs of the Senate, the Under Secretary of the 

7 Treasury for Terrorism and Financial Intelligence shall 

8 testify to explain the effects of this Act, and the amend9 ments made by this Act, on North Korea’s access to illicit 

10 finance channels. 

11 (c) INTERNATIONAL MONETARY FUND.—Title XVI 

12 of the International Financial Institutions Act (22 U.S.C. 

13 262p et seq.) is amended by adding at the end the fol14 lowing: 

15 ‘‘SEC. 1629. SUPPORT FOR CAPACITY OF THE INTER16 NATIONAL MONETARY FUND TO PREVENT 

17 MONEY LAUNDERING AND FINANCING OF 

18 TERRORISM. 

19 ‘‘The Secretary of the Treasury shall instruct the 

20 United States Executive Director at the International 

21 Monetary Fund to support the increased use of the admin22 istrative budget of the Fund for technical assistance that 

23 strengthens the capacity of Fund members to prevent 

24 money laundering and the financing of terrorism.’’. 


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1 (d) NATIONAL ADVISORY COUNCIL REPORT TO CON2 GRESS.—The Chairman of the National Advisory Council 

3 on International Monetary and Financial Policies shall in4 clude in the report required by section 1701 of the Inter5 national Financial Institutions Act (22 U.S.C. 262r) a de6 scription of— 

7 (1) the activities of the International Monetary 

8 Fund in the most recently completed fiscal year to 

9 provide technical assistance that strengthens the ca10 pacity of Fund members to prevent money laun11 dering and the financing of terrorism, and the effec12 tiveness of the assistance; and 

13 (2) the efficacy of efforts by the United States 

14 to support such technical assistance through the use 

15 of the Fund’s administrative budget, and the level of 

16 such support. 

17 (e) SUNSET.—Effective on the date that is the end 

18 of the 4-year period beginning on the date of enactment 

19 of this Act, section 1629 of the International Financial 

20 Institutions Act, as added by subsection (c), is repealed. 

21 SEC. 6. SUSPENSION AND TERMINATION OF PROHIBITIONS 

22 AND PENALTIES. 

23 (a) SUSPENSION.—Except for any provision of sec24 tion 7, the President may suspend, on a case-by-case 

25 basis, the application of any provision of this subtitle, or 


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1 provision in an amendment made by this subtitle, with re2 spect to an entity, individual, or transaction, for a period 

3 of not more than 180 days at a time if the President cer4 tifies to Congress that— 

5 (1) the Government of North Korea has— 

6 (A) committed to the verifiable suspension 

7 of North Korea’s proliferation and testing of 

8 WMD, including systems designed in whole or 

9 in part for the delivery of such weapons; and 

10 (B) has agreed to multilateral talks includ11 ing the Government of the United States, with 

12 the goal of permanently and verifiably limiting 

13 North Korea’s WMD and ballistic missile pro14 grams; or 

15 (2) such suspension is vital to the national se16 curity interests of the United States, with an expla17 nation of the reasons therefor. 

18 (b) TERMINATION.— 

19 (1) IN GENERAL.—On the date that is 30 days 

20 after the date on which the President makes the cer21 tification described under paragraph (2)— 

22 (A) subsection (a), section 3, and sub23 sections (a) and (b) of section 5 shall cease to 

24 have any force or effect; 


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1 (B) section 73 of the Bretton Woods 

2 Agreements Act, as added by section 4(a), shall 

3 be repealed; and 

4 (C) section 2(b)(14) of the Export-Import 

5 Bank Act of 1945, as added by section 4(b), 

6 shall be repealed. 

7 (2) CERTIFICATION.—The certification de8 scribed under this paragraph is a certification by the 

9 President to the Congress that— 

10 (A) the Government of North Korea— 

11 (i) has ceased to pose a significant 

12 threat to national security, with an expla13 nation of the reasons therefor; or 

14 (ii) is committed to, and is taking ef15 fective steps to achieving, the goal of per16 manently and verifiably limiting North Ko17 rea’s WMD and ballistic missile programs; 

18 or 

19 (B) such termination is vital to the na20 tional security interests of the United States, 

21 with an explanation of the reasons therefor. 

22 SEC. 7. EXCEPTION RELATING TO IMPORTATION OF 

23 GOODS. 

24 (a) IN GENERAL.—The authorities and requirements 

25 to impose sanctions authorized under this subtitle shall 


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1 not include the authority or requirement to impose sanc2 tions on the importation of goods. 

3 (b) GOOD DEFINED.—In this section, the term 

4 ‘‘good’’ means any article, natural or man-made sub5 stance, material, supply or manufactured product, includ6 ing inspection and test equipment, and excluding technical 

7 data. 

8 SEC. 8. DEFINITIONS. 

9 For purposes of this subtitle: 

10 (1) TERMS RELATED TO NORTH KOREA.—The 

11 terms ‘‘applicable Executive order’’, ‘‘Government of 

12 North Korea’’, ‘‘North Korea’’, ‘‘North Korean per13 son’’, and ‘‘significant activities undermining cyber14 security’’ have the meanings given those terms, re15 spectively, in section 3 of the North Korea Sanctions 

16 and Policy Enhancement Act of 2016 (22 U.S.C. 

17 9202). 

18 (2) COVERED PERSON.—The term ‘‘covered 

19 person’’ means the following: 

20 (A) Any North Korean person designated 

21 under an applicable Executive order. 

22 (B) Any North Korean person that know23 ingly facilitates the transfer of bulk cash or cov24 ered goods (as defined under section 1027.100 

25 of title 31, Code of Federal Regulations). 


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1 (C) Any North Korean financial institu2 tion. 

3 (D) Any North Korean person employed 

4 outside of North Korea, except that the Sec5 retary of the Treasury may waive the applica6 tion of this subparagraph for a North Korean 

7 person that is not otherwise a covered person 

8 and— 

9 (i) has been granted asylum or ref10 ugee status by the country of employment; 

11 or 

12 (ii) is employed as essential diplomatic 

13 personnel for the Government of North 

14 Korea. 

15 (E) Any person acting on behalf of, or at 

16 the direction of, a person described under sub17 paragraphs (A) through (D). 

18 (F) Any person that knowingly employs a 

19 person described under subparagraph (D). 

20 (G) Any person that knowingly facilitates 

21 the import of goods, services, technology, or 

22 natural resources, including energy imports and 

23 minerals, or their derivatives, from North 

24 Korea. 


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1 (H) Any person that knowingly facilitates 

2 the export of goods, services, technology, or nat3 ural resources, including energy exports and 

4 minerals, or their derivatives, to North Korea, 

5 except for food, medicine, or medical supplies 

6 required for civilian humanitarian needs. 

7 (I) Any person that knowingly invests in, 

8 or participates in a joint venture with, an entity 

9 in which the Government of North Korea par10 ticipates or an entity that is created or orga11 nized under North Korean law. 

12 (J) Any person that knowingly provides fi13 nancial services, including through a subsidiary 

14 or joint venture, in North Korea. 

15 (K) Any person that knowingly insures, 

16 registers, facilitates the registration of, or 

17 maintains insurance or a registration for, a ves18 sel owned, controlled, commanded, or operated 

19 by a North Korean person. 

20 (L) Any person knowingly providing spe21 cialized teaching, training, or information or 

22 providing material or technological support to a 

23 North Korean person that— 

24 (i) may contribute to North Korea’s 

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1 cluding systems designed in whole or in 

2 part for the delivery of such weapons; or 

3 (ii) may contribute to significant ac4 tivities undermining cybersecurity. 

5 (3) FINANCIAL INSTITUTION DEFINITIONS.— 

6 (A) FINANCIAL INSTITUTION.—The term 

7 ‘‘financial institution’’ means a United States 

8 financial institution or a foreign financial insti9 tution. 

10 (B) FOREIGN FINANCIAL INSTITUTION.— 

11 The term ‘‘foreign financial institution’’ has the 

12 meaning given that term under section 

13 1010.605 of title 31, Code of Federal Regula14 tions. 

15 (C) NORTH KOREAN FINANCIAL INSTITU16 TION.—The term ‘‘North Korean financial in17 stitution’’ includes— 

18 (i) any North Korean financial insti19 tution, as defined in section 3 of the North 

20 Korea Sanctions and Policy Enhancement 

21 Act of 2016 (22 U.S.C. 9202); 

22 (ii) any financial agency, as defined in 

23 section 5312 of title 31, United States 

24 Code, that is owned or controlled by the 

25 Government of North Korea; 


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1 (iii) any money transmitting business, 

2 as defined in section 5330(d) of title 31, 

3 United States Code, that is owned or con4 trolled by the Government of North Korea; 

5 (iv) any financial institution that is a 

6 joint venture between any person and the 

7 Government of North Korea; and 

8 (v) any joint venture involving a 

9 North Korean financial institution. 

10 (D) UNITED STATES FINANCIAL INSTITU11 TION.—The term ‘‘United States financial insti12 tution’’ has the meaning given the term ‘‘U.S. 

13 financial institution’’ under section 510.310 of 

14 title 31, Code of Federal Regulations. 

15 (4) KNOWINGLY.—The term ‘‘knowingly’’ with 

16 respect to conduct, a circumstance, or a result, 

17 means that a person has actual knowledge, or should 

18 have known, of the conduct, the circumstance, or the 

19 result. 

Æ 


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