IIB 
115TH CONGRESS 
1ST SESSION H. R. 3898 
IN THE SENATE OF THE UNITED STATES 
OCTOBER 25, 2017 
Received; read twice and referred to the Committee on Foreign Relations 
AN ACT 
To impose secondary sanctions with respect to North Korea, 
strengthen international efforts to improve sanctions en-
forcement, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Otto Warmbier North 
Korea Nuclear Sanctions Act’’. 
SEC. 2. FINDINGS. 
The Congress finds the following: 
(1) On June 1, 2016, the Department of the 
Treasury’s Financial Crimes Enforcement Network 
announced a Notice of Finding that the Democratic 
People’s Republic of Korea is a jurisdiction of pri-
mary money laundering concern due to its use of 
state-controlled financial institutions and front com-
panies to support the proliferation and development 
of weapons of mass destruction (WMD) and ballistic 
missiles. 
(2) The Financial Action Task Force (FATF) 
has expressed serious concerns with the threat posed 
by North Korea’s proliferation and financing of 
WMD, and has called on FATF members to apply 
effective counter-measures to protect their financial 
sectors from North Korean money laundering, WMD 
proliferation financing, and the financing of ter-
rorism. 
(3) In its February 2017 report, the U.N. 
Panel of Experts concluded that— 
(A) North Korea continued to access the 
international financial system in support of il-
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licit activities despite sanctions imposed by 
U.N. Security Council Resolutions 2270 (2016) 
and 2321 (2016); 
(B) during the reporting period, no mem-
ber state had reported taking actions to freeze 
North Korean assets; and 
(C) sanctions evasion by North Korea, 
combined with inadequate compliance by mem-
ber states, had significantly negated the impact 
of U.N. Security Council resolutions. 
(4) In its September 2017 report, the U.N. 
Panel of Experts found that— 
(A) North Korea continued to violate fi-
nancial sanctions by using agents acting abroad 
on the country’s behalf; 
(B) foreign financial institutions provided 
correspondent banking services to North Ko-
rean persons and front companies for illicit pur-
poses; 
(C) foreign companies violated sanctions by 
maintaining links with North Korean financial 
institutions; and 
(D) North Korea generated at least $270 
million during the reporting period through the 
violation of sectoral sanctions. 
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(5) North Korean entities engage in significant 
financial transactions through foreign bank accounts 
that are maintained by non-North Korean nationals, 
thereby masking account users’ identity in order to 
access financial services. 
(6) North Korea’s sixth nuclear test on Sep-
tember 3, 2017, demonstrated an estimated explo-
sive power more than 100 times greater than that 
generated by its first nuclear test in 2006. 
(7) North Korea has successfully tested sub-
marine-launched and intercontinental ballistic mis-
siles, and is rapidly progressing in its development 
of a nuclear-armed missile that is capable of reach-
ing United States territory. 
SEC. 3. CONDITIONS WITH RESPECT TO CERTAIN AC-
COUNTS AND TRANSACTIONS AT UNITED 
STATES FINANCIAL INSTITUTIONS. 
(a) CORRESPONDENT AND PAYABLE-THROUGH AC-
COUNTS HELD BY FOREIGN FINANCIAL INSTITUTIONS.— 
(1) IN GENERAL.—Not later than 45 days after 
the date of the enactment of this Act, the Secretary 
of the Treasury shall prescribe regulations to pro-
hibit, or impose strict conditions on, the opening or 
maintaining in the United States of a correspondent 
account or a payable-through account by a foreign 
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financial institution that the Secretary finds know-
ingly facilitates a significant transaction or trans-
actions or provides significant financial services for 
a covered person. 
(2) PENALTIES.— 
(A) CIVIL PENALTY.—A person who vio-
lates, attempts to violate, conspires to violate, 
or causes a violation of regulations prescribed 
under this subsection shall be subject to a civil 
penalty in an amount not to exceed the greater 
of— 
(i) $250,000; or 
(ii) an amount that is twice the 
amount of the transaction that is the basis 
of the violation with respect to which the 
penalty is imposed. 
(B) CRIMINAL PENALTY.—A person who 
willfully commits, willfully attempts to commit, 
or willfully conspires to commit, or aids or 
abets in the commission of, a violation of regu-
lations prescribed under this subsection shall, 
upon conviction, be fined not more than 
$1,000,000, or if a natural person, may be im-
prisoned for not more than 20 years, or both. 
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(b) RESTRICTIONS ON CERTAIN TRANSACTIONS BY 
UNITED STATES FINANCIAL INSTITUTIONS.— 
(1) IN GENERAL.—Not later than 45 days after 
the date of the enactment of this Act, the Secretary 
of the Treasury shall prescribe regulations to pro-
hibit a United States financial institution, and any 
person owned or controlled by a United States finan-
cial institution, from knowingly engaging in a sig-
nificant transaction or transactions with or benefit-
ting any person that the Secretary finds to be a cov-
ered person. 
(2) CIVIL PENALTY.—A person who violates, at-
tempts to violate, conspires to violate, or causes a 
violation of regulations prescribed under this sub-
section shall be subject to a civil penalty in an 
amount not to exceed the greater of— 
(A) $250,000; or 
(B) an amount that is twice the amount of 
the transaction that is the basis of the violation 
with respect to which the penalty is imposed. 
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SEC. 4. OPPOSITION TO ASSISTANCE BY THE INTER-
NATIONAL FINANCIAL INSTITUTIONS AND 
THE EXPORT-IMPORT BANK. 
(a) INTERNATIONAL FINANCIAL INSTITUTIONS.— 
The Bretton Woods Agreements Act (22 U.S.C. 286 et 
seq.) is amended by adding at the end the following: 
‘‘SEC. 73. OPPOSITION TO ASSISTANCE FOR ANY GOVERN-
MENT THAT FAILS TO IMPLEMENT SANC-
TIONS ON NORTH KOREA. 
‘‘(a) IN GENERAL.—The Secretary of the Treasury 
shall instruct the United States Executive Director at the 
international financial institutions (as defined under sec-
tion 1701(c) of the International Financial Institutions 
Act) to use the voice and vote of the United States to 
oppose the provision of financial assistance to a foreign 
government, other than assistance to support basic human 
needs, if the President determines that, in the year pre-
ceding consideration of approval of such assistance, the 
government has knowingly failed to prevent the provision 
of financial services to, or freeze the funds, financial as-
sets, and economic resources of, a person described under 
subparagraphs (A) through (E) of section 7(2) of the Otto 
Warmbier North Korea Nuclear Sanctions Act. 
‘‘(b) WAIVER.—The President may waive subsection 
(a) for up to 180 days at a time with respect to a foreign 
government if the President reports to Congress that— 
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‘‘(1) the foreign government’s failure described 
under (a) is due exclusively to a lack of foreign gov-
ernment capacity; 
‘‘(2) the foreign government is taking effective 
steps to prevent recurrence of such failure; or 
‘‘(3) such waiver is vital to the national security 
interests of the United States.’’. 
(b) EXPORT-IMPORT BANK.—Section 2(b) of the Ex-
port-Import Bank Act of 1945 (12 U.S.C. 635(b)) is 
amended by adding at the end the following: 
‘‘(14) PROHIBITION
ON
SUPPORT
INVOLVING 
PERSONS
CONNECTED
WITH
NORTH
KOREA.—The 
Bank may not guarantee, insure, or extend credit, or 
participate in the extension of credit in connection 
with the export of a good or service to a covered per-
son (as defined under section 7 of the Otto 
Warmbier North Korea Nuclear Sanctions Act).’’. 
SEC. 5. TREASURY REPORTS ON COMPLIANCE, PENALTIES, 
AND TECHNICAL ASSISTANCE. 
(a) QUARTERLY REPORT.— 
(1) IN GENERAL.—Not later than 120 days fol-
lowing the date of the enactment of this Act, and 
every 90 days thereafter, the Secretary of the Treas-
ury shall submit a report to the Committee on Fi-
nancial Services of the House of Representatives and 
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the Committee on Banking, Housing, and Urban Af-
fairs of the Senate that includes— 
(A) a list of financial institutions that, in 
the period since the preceding report, knowingly 
facilitated a significant transaction or trans-
actions or provided significant financial services 
for a covered person, or failed to apply appro-
priate due diligence to prevent such activities; 
(B) a list of any penalties imposed under 
section 3 in the period since the preceding re-
port; and 
(C) a description of efforts by the Depart-
ment of the Treasury in the period since the 
preceding report, through consultations, tech-
nical assistance, or other appropriate activities, 
to strengthen the capacity of financial institu-
tions and foreign governments to prevent the 
provision of financial services benefitting any 
covered person. 
(2) FORM OF REPORT; PUBLIC AVAILABILITY.— 
(A) FORM.—The report required under 
paragraph (1) shall be submitted in unclassified 
form but may contain a classified annex. 
(B) PUBLIC AVAILABILITY.—The unclassi-
fied portion of such report shall be made avail-
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able to the public and posted on the website of 
the Department of the Treasury. 
(b) TESTIMONY REQUIRED.—Upon request of the 
Committee on Financial Services of the House of Rep-
resentatives or the Committee on Banking, Housing, and 
Urban Affairs of the Senate, the Under Secretary of the 
Treasury for Terrorism and Financial Intelligence shall 
testify to explain the effects of this Act, and the amend-
ments made by this Act, on North Korea’s access to fi-
nance. 
(c) INTERNATIONAL MONETARY FUND.—Title XVI 
of the International Financial Institutions Act (22 U.S.C. 
262p et seq.) is amended by adding at the end the fol-
lowing: 
‘‘SEC. 1629. SUPPORT FOR CAPACITY OF THE INTER-
NATIONAL MONETARY FUND TO PREVENT 
MONEY LAUNDERING AND FINANCING OF 
TERRORISM. 
‘‘The Secretary of the Treasury shall instruct the 
United States Executive Director at the International 
Monetary Fund to support the use of the administrative 
budget of the Fund for technical assistance that strength-
ens the capacity of Fund members to prevent money laun-
dering and the financing of terrorism.’’. 
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(d) NATIONAL ADVISORY COUNCIL REPORT TO CON-
GRESS.—The Chairman of the National Advisory Council 
on International Monetary and Financial Policies shall in-
clude in the report required by section 1701 of the Inter-
national Financial Institutions Act (22 U.S.C. 262r) for 
the fiscal year following the date of the enactment of this 
Act a description of— 
(1) the activities of the International Monetary 
Fund in the most recently completed fiscal year to 
provide technical assistance that strengthens the ca-
pacity of Fund members to prevent money laun-
dering and the financing of terrorism, and the effec-
tiveness of the assistance; and 
(2) the efficacy of efforts by the United States 
to support such technical assistance through the use 
of the Fund’s administrative budget. 
SEC. 6. SUSPENSION AND TERMINATION OF PROHIBITIONS 
AND PENALTIES. 
(a) SUSPENSION.—The President may suspend, on a 
case-by-case basis, the application of any provision of this 
Act, or provision in an amendment made by this Act, for 
a period of not more than 180 days at a time if the Presi-
dent certifies to Congress that— 
(1) the Government of North Korea has— 
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(A) committed to the verifiable suspension 
of North Korea’s proliferation and testing of 
WMD, including systems designed in whole or 
in part for the delivery of such weapons; and 
(B) has agreed to multilateral talks includ-
ing the Government of the United States, with 
the goal of permanently and verifiably limiting 
North Korea’s WMD and ballistic missile pro-
grams; or 
(2) such suspension is vital to the national se-
curity interests of the United States, with an expla-
nation of the reasons therefor. 
(b) TERMINATION.— 
(1) IN GENERAL.—On the date that is 30 days 
after the date on which the President makes the cer-
tification described under paragraph (2)— 
(A) section 3, subsections (a) and (b) of 
section 5, and section 6(a) of this Act shall 
cease to have any force or effect; 
(B) section 73 of the Bretton Woods 
Agreements Act, as added by section 4(a), shall 
be repealed; and 
(C) section 2(b)(14) of the Export-Import 
Bank Act of 1945, as added by section 4(b), 
shall be repealed. 
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(2) 
CERTIFICATION.—The 
certification 
de-
scribed under this paragraph is a certification by the 
President to the Congress that— 
(A) the Government of North Korea— 
(i) has ceased to pose a significant 
threat to national security, with an expla-
nation of the reasons therefor; or 
(ii) is committed to, and is taking ef-
fective steps to achieving, the goal of per-
manently and verifiably limiting North Ko-
rea’s WMD and ballistic missile programs; 
or 
(B) such termination is vital to the na-
tional security interests of the United States, 
with an explanation of the reasons therefor. 
SEC. 7. DEFINITIONS. 
For purposes of this Act: 
(1) TERMS RELATED TO NORTH KOREA.—The 
terms ‘‘applicable Executive order’’, ‘‘Government of 
North Korea’’, ‘‘North Korea’’, ‘‘North Korean per-
son’’, and ‘‘significant activities undermining cyber-
security’’ have the meanings given those terms, re-
spectively, in section 3 of the North Korea Sanctions 
and Policy Enhancement Act of 2016 (22 U.S.C. 
9202). 
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(2) COVERED
PERSON.—The term ‘‘covered 
person’’ means the following: 
(A) Any designated person under an appli-
cable Executive order. 
(B) Any North Korean person that facili-
tates the transfer of bulk cash or covered goods 
(as defined under section 1027.100 of title 31, 
Code of Federal Regulations). 
(C) Any North Korean financial institu-
tion. 
(D) Any North Korean person employed 
outside of North Korea, except that the Sec-
retary of the Treasury may waive the applica-
tion of this subparagraph for a North Korean 
person that is not otherwise a covered person 
and— 
(i) has been granted asylum or ref-
ugee status by the country of employment; 
or 
(ii) is employed as essential diplomatic 
personnel for the Government of North 
Korea. 
(E) Any person acting on behalf of, or at 
the direction of, a person described under sub-
paragraphs (A) through (D). 
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(F) Any person that knowingly employs a 
person described under subparagraph (D). 
(G) Any person that facilitates the import 
of goods, services, technology, or natural re-
sources, including energy imports and minerals, 
or their derivatives, from North Korea. 
(H) Any person that facilitates the export 
of goods, services, technology, or natural re-
sources, including energy exports and minerals, 
or their derivatives, to North Korea, except for 
food, medicine, or medical supplies required for 
civilian humanitarian needs. 
(I) Any person that invests in, or partici-
pates in a joint venture with, an entity in which 
the Government of North Korea participates or 
an entity that is created or organized under 
North Korean law. 
(J) Any person that provides financial 
services, including through a subsidiary or joint 
venture, in North Korea. 
(K) Any person that insures, registers, fa-
cilitates the registration of, or maintains insur-
ance or a registration for, a vessel owned, con-
trolled, commanded, or operated by a North 
Korean person. 
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(L) Any person providing specialized 
teaching, training, or information or providing 
material or technological support to a North 
Korean person that— 
(i) may contribute to North Korea’s 
development and proliferation of WMD, in-
cluding systems designed in whole or in 
part for the delivery of such weapons; or 
(ii) may contribute to significant ac-
tivities undermining cybersecurity. 
(3) FINANCIAL INSTITUTION DEFINITIONS.— 
(A) FINANCIAL
INSTITUTION.—The term 
‘‘financial institution’’ means a United States 
financial institution or a foreign financial insti-
tution. 
(B) FOREIGN FINANCIAL INSTITUTION.— 
The term ‘‘foreign financial institution’’ has the 
meaning 
given 
that 
term 
under 
section 
1010.605 of title 31, Code of Federal Regula-
tions. 
(C) NORTH KOREAN FINANCIAL INSTITU-
TION.—The term ‘‘North Korean financial in-
stitution’’ includes— 
(i) any North Korean financial insti-
tution, as defined in section 3 of the North 
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Korea Sanctions and Policy Enhancement 
Act of 2016 (22 U.S.C. 9202); 
(ii) any financial agency, as defined in 
section 5312 of title 31, United States 
Code, that is owned or controlled by the 
Government of North Korea; 
(iii) any money transmitting business, 
as defined in section 5330(d) of title 31, 
United States Code, that is owned or con-
trolled by the Government of North Korea; 
(iv) any financial institution that is a 
joint venture between any person and the 
Government of North Korea; and 
(v) any joint venture involving a 
North Korean financial institution. 
(D) UNITED STATES FINANCIAL INSTITU-
TION.—The term ‘‘United States financial insti-
tution’’ has the meaning given the term ‘‘U.S. 
financial institution’’ under section 510.310 of 
title 31, Code of Federal Regulations. 
(4) KNOWINGLY.—The term ‘‘knowingly’’ with 
respect to conduct, a circumstance, or a result, 
means that a person has actual knowledge, or should 
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have known, of the conduct, the circumstance, or the 
result. 
Passed the House of Representatives October 24, 
2017. 
Attest: 
KAREN L. HAAS, 
Clerk. 
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