Title: Otto Warmbier North Korea Nuclear Sanctions Act
Policy area: Finance and Financial Sector

Summary:
Impeding North Korea's Access to Finance Act of 2017
This bill directs the Department of the Treasury to prohibit a foreign financial institution that knowingly provides significant financial services to a "covered person" from opening or maintaining a correspondent account in the United States. "Covered person" includes any person doing business with North Korea, a North Korean person employed outside North Korea, and any person that knowingly employs a North Korean person outside North Korea. The bill establishes civil and criminal penalties for violations.
Treasury must prohibit a U.S.-based financial institution from knowingly engaging in a significant transaction with a covered person. The bill establishes civil penalties for violations.
The bill amends the Bretton Woods Agreements Act to direct the United States to oppose international financial assistance for a foreign government that does not implement these sanctions against North Korea. The President may waive this directive after specified steps are taken.
The bill amends the Export-Import Bank Act to prohibit the bank from providing support to a covered person.
Treasury must report on compliance with this bill among financial institutions, including any penalties imposed and efforts by Treasury to support compliance.
The bill amends the International Financial Institutions Act to require Treasury to: (1) instruct the U.S. Executive Director at the International Monetary Fund (IMF) to support the use of the IMF's administrative budget for technical assistance that strengthens the capacity of IMF members to prevent money laundering and the financing of terrorism, and (2) report on the effectiveness of such assistance.
The President may suspend or terminate sanctions under this bill if certain steps regarding nonproliferation of weapons of mass destruction are taken by North Korea.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3898 Introduced in House (IH)]

<DOC>






115th CONGRESS
  1st Session
                                H. R. 3898

To require the Secretary of the Treasury to place conditions on certain 
accounts at United States financial institutions with respect to North 
                     Korea, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 2, 2017

 Mr. Barr (for himself, Mr. Hollingsworth, Ms. Moore, Mr. Perlmutter, 
  Mr. Hill, and Mr. Vargas) introduced the following bill; which was 
            referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To require the Secretary of the Treasury to place conditions on certain 
accounts at United States financial institutions with respect to 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.

    This Act may be cited as the ``Impeding North Korea's Access to 
Finance Act of 2017''.

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 Republic of North Korea is a 
        jurisdiction of primary money laundering concern due to its use 
        of state-controlled financial institutions and front companies 
        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 terrorism.
            (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 illicit 
                activities despite sanctions imposed by U.N. Security 
                Council Resolutions 2270 (2016) and 2321 (2016);
                    (B) during the reporting period, no member state 
                had reported taking actions to freeze North Korean 
                assets; and
                    (C) sanctions evasion by North Korea, combined with 
                inadequate compliance by member 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 financial 
                sanctions by using agents acting abroad on the 
                country's behalf;
                    (B) foreign financial institutions provided 
                correspondent banking services to North Korean persons 
                and front companies for illicit purposes;
                    (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.
            (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 September 3, 2017, 
        demonstrated an estimated explosive power more than 100 times 
        greater than that generated by its first nuclear test in 2006.
            (7) North Korea has successfully tested submarine-launched 
        and intercontinental ballistic missiles, and is rapidly 
        progressing in its development of a nuclear-armed missile that 
        is capable of reaching United States territory.

SEC. 3. CONDITIONS WITH RESPECT TO CERTAIN ACCOUNTS AND TRANSACTIONS AT 
              UNITED STATES FINANCIAL INSTITUTIONS.

    (a) Correspondent and Payable-Through Accounts 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 prohibit, 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 
        financial institution that the Secretary finds knowingly 
        facilitates a significant transaction or transactions or 
        provides significant financial services for a covered person.
            (2) Penalties.--
                    (A) Civil penalty.--A person who violates, 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 regulations prescribed under this 
                subsection shall, upon conviction, be fined not more 
                than $1,000,000, or if a natural person, may be 
                imprisoned for not more than 20 years, or both.
    (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 prohibit a United States financial 
        institution, and any person owned or controlled by a United 
        States financial institution, from knowingly engaging in a 
        significant transaction or transactions with or benefitting any 
        person that the Secretary finds to be a covered person.
            (2) Civil penalty.--A person who violates, 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--
                    (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.

SEC. 4. OPPOSITION TO ASSISTANCE BY THE INTERNATIONAL 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 GOVERNMENT THAT FAILS TO 
              IMPLEMENT SANCTIONS 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 section 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 preceding consideration of 
approval of such assistance, the government has knowingly failed to 
prevent the provision of financial services to, or freeze the funds, 
financial assets, and economic resources of, a person described under 
subparagraphs (A) through (E) of section 7(2) of the Impeding North 
Korea's Access to Finance Act of 2017.
    ``(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--
            ``(1) the foreign government's failure described under (a) 
        is due exclusively to a lack of foreign government 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 Export-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 
        person (as defined under section 7 of the Impeding North 
        Korea's Access to Finance Act of 2017).''.

SEC. 5. TREASURY REPORTS ON COMPLIANCE, PENALTIES, AND TECHNICAL 
              ASSISTANCE.

    (a) Quarterly Report.--
            (1) In general.--Not later than 120 days following the date 
        of the enactment of this Act, and every 90 days thereafter, the 
        Secretary of the Treasury shall submit a report to the 
        Committee on Financial Services of the House of Representatives 
        and the Committee on Banking, Housing, and Urban Affairs 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 transactions 
                or provided significant financial services for a 
                covered person, or failed to apply appropriate due 
                diligence to prevent such activities;
                    (B) a list of any penalties imposed under section 3 
                in the period since the preceding report; and
                    (C) a description of efforts by the Department of 
                the Treasury in the period since the preceding report, 
                through consultations, technical assistance, or other 
                appropriate activities, to strengthen the capacity of 
                financial institutions and foreign governments to 
                prevent the provision of financial services benefitting 
                a person described under subparagraphs (A) through (L) 
                of section 7(2).
            (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 unclassified portion 
                of such report shall be made available 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 Representatives 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 amendments made by this Act, 
on North Korea's access to financial services.
    (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 following:

``SEC. 1629. SUPPORT FOR CAPACITY OF THE INTERNATIONAL 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 strengthens the capacity of Fund members to prevent money 
laundering and the financing of terrorism.''.
    (d) National Advisory Council Report to Congress.--The Chairman of 
the National Advisory Council on International Monetary and Financial 
Policies shall include in the report required by section 1701 of the 
International 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 capacity of Fund members to 
        prevent money laundering and the financing of terrorism, and 
        the effectiveness 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 President certifies to Congress that--
            (1) the Government of North Korea has--
                    (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 including the 
                Government of the United States, with the goal of 
                permanently and verifiably limiting North Korea's WMD 
                and ballistic missile programs; or
            (2) such suspension is vital to the national security 
        interests of the United States, with an explanation 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 certification 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.
            (2) Certification.--The certification described 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 explanation of 
                        the reasons therefor; or
                            (ii) is committed to, and is taking 
                        effective steps to achieving, the goal of 
                        permanently and verifiably limiting North 
                        Korea's WMD and ballistic missile programs; or
                    (B) such termination is vital to the national 
                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'', and ``North Korean person'' have the meanings given 
        those terms, respectively, in section 3 of the North Korea 
        Sanctions and Policy Enhancement Act of 2016 (22 U.S.C. 9202).
            (2) Covered person.--The term ``covered person'' means the 
        following:
                    (A) Any designated person under an applicable 
                Executive order.
                    (B) Any North Korean person that facilitates 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 institution.
                    (D) Any North Korean person employed outside of 
                North Korea.
                    (E) Any person acting on behalf of, or at the 
                direction of, a person described under subparagraphs 
                (A) through (D).
                    (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 resources, 
                including energy imports and minerals, or their 
                derivatives, from North Korea.
                    (H) Any person that facilitates the export of 
                goods, services, technology, or natural resources, 
                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 participates 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, facilitates 
                the registration of, or maintains insurance or a 
                registration for, a vessel commanded or operated by a 
                North Korean person.
                    (L) Any person providing specialized teaching, 
                training, or information to a North Korean person that 
                may contribute to North Korea's development and 
                proliferation of WMD, including systems designed in 
                whole or in part for the delivery of such weapons.
            (3) Financial institution definitions.--
                    (A) Financial institution.--The term ``financial 
                institution'' means a United States financial 
                institution or a foreign financial institution.
                    (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 Regulations.
                    (C) North korean financial institution.--The term 
                ``North Korean financial institution'' includes--
                            (i) any North Korean financial institution, 
                        as defined in section 3 of the North 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 controlled 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 institution.--The term 
                ``United States financial institution'' 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 have known, of the conduct, the 
        circumstance, or the result.
                                 <all>