Title: Otto Warmbier North Korea Nuclear Sanctions Act of 2019
Policy area: International Affairs

Summary:
Otto Warmbier North Korea Nuclear Sanctions Act of 2019
This bill imposes financial sanctions and restrictions related to North Korea.
The Department of the Treasury shall  restrict correspondent and payable-through accounts that are used to facilitate significant transactions or provide services to sanctioned entities, specifically North Korean financial institutions, companies, and certain North Korean individuals, such as those named in certain executive orders. (Correspondent and payable-through accounts are often maintained by foreign financial institutions in U.S. banks to access the U.S. financial system.)
Treasury shall use its vote and voice in international financial institutions, such as the International Monetary Fund (IMF), to oppose the provision of assistance by such institutions to governments that fail to enforce the sanctions provided under this bill.
The Export-Import Bank may not guarantee, insure, or extend credit in relation to exports to entities sanctioned under this bill.
Treasury shall support increasing use of the IMF administrative budget for technical assistance to help IMF members fight money laundering and funding for terrorism.
Various sanctions and restrictions under this bill shall be suspended if the President certifies to Congress that (1) North Korea has committed to suspending its weapons of mass destruction programs and engaging in multilateral talks on limiting such programs, or (2) it is in U.S. national security interests to do so.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4084 Introduced in House (IH)]

<DOC>






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.

    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 ``Otto Warmbier North Korea Nuclear 
Sanctions Act of 2019''.

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 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) On February 23, 2018, the Department of the Treasury 
        announced its largest-ever set of North Korea-related 
        sanctions, with a particular focus on shipping and trading 
        companies, and issued a maritime advisory to highlight North 
        Korea's sanctions evasion tactics. On May 9, 2019, the United 
        States seized a North Korean ship, the Wise Honest, which had 
        previously been detained by Indonesia for carrying coal in 
        violation of United Nations sanctions.
            (8) According to the March 2019 Final Report of the U.N. 
        Panel of Experts, ``The nuclear and ballistic missile 
        programmes of the Democratic People's Republic of Korea remain 
        intact and the country continues to defy Security Council 
        resolutions through a massive increase in illegal ship-to-ship 
        transfers of petroleum products and coal. These violations 
        render the latest United Nations sanctions ineffective by 
        flouting the caps on the import of petroleum products and crude 
        oil by the Democratic People's Republic of Korea as well as the 
        coal ban, imposed in 2017 by the Security Council in response 
        to the country's unprecedented nuclear and ballistic missile 
        testing.''.
            (9) The U.N. Panel of Experts further concluded: 
        ``Financial sanctions remain some of the most poorly 
        implemented and actively evaded measures of the sanctions 
        regime. Individuals empowered to act as extensions of financial 
        institutions of the Democratic People's Republic of Korea 
        operate in at least five countries with seeming impunity.''.
            (10) North Korea has successfully tested short-range, 
        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 180 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 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 180 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 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 8(2) of the Otto Warmbier 
North Korea Nuclear Sanctions Act of 2019.
    ``(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 8 of the Otto Warmbier North 
        Korea Nuclear Sanctions Act of 2019).''.

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

    (a) Semiannual Report.--
            (1) In general.--Not later than 120 days following the date 
        of the enactment of this Act, and every 180 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;
                    (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 
                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 unclassified portion 
                of such report shall be made available to the public 
                and posted on the website of the Department of the 
                Treasury.
            (3) Sunset.--The report requirement under this subsection 
        shall terminate after the end of the 5-year period beginning on 
        the date of enactment of this Act.
    (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 illicit finance channels.
    (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 
increased 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) 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, and the level of such support.
    (e) Sunset.--Effective on the date that is the end of the 4-year 
period beginning on the date of enactment of this Act, section 1629 of 
the International Financial Institutions Act, as added by subsection 
(c), is repealed.

SEC. 6. SUSPENSION AND TERMINATION OF PROHIBITIONS AND PENALTIES.

    (a) Suspension.--Except for any provision of section 7, the 
President may suspend, on a case-by-case basis, the application of any 
provision of this subtitle, or provision in an amendment made by this 
subtitle, with respect to an entity, individual, or transaction, 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) subsection (a), section 3, and subsections (a) 
                and (b) of section 5 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. EXCEPTION RELATING TO IMPORTATION OF GOODS.

    (a) In General.--The authorities and requirements to impose 
sanctions authorized under this subtitle shall not include the 
authority or requirement to impose sanctions on the importation of 
goods.
    (b) Good Defined.--In this section, the term ``good'' means any 
article, natural or man-made substance, material, supply or 
manufactured product, including inspection and test equipment, and 
excluding technical data.

SEC. 8. DEFINITIONS.

    For purposes of this subtitle:
            (1) Terms related to north korea.--The terms ``applicable 
        Executive order'', ``Government of North Korea'', ``North 
        Korea'', ``North Korean person'', and ``significant activities 
        undermining cybersecurity'' 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 North Korean person designated under an 
                applicable Executive order.
                    (B) Any North Korean person that knowingly 
                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, except that the Secretary of the Treasury 
                may waive the application of this subparagraph for a 
                North Korean person that is not otherwise a covered 
                person and--
                            (i) has been granted asylum or refugee 
                        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 subparagraphs 
                (A) through (D).
                    (F) Any person that knowingly employs a person 
                described under subparagraph (D).
                    (G) Any person that knowingly 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 knowingly 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 knowingly 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 knowingly provides financial 
                services, including through a subsidiary or joint 
                venture, in North Korea.
                    (K) Any person that knowingly insures, registers, 
                facilitates the registration of, or maintains insurance 
                or a registration for, a vessel owned, controlled, 
                commanded, or operated by a North Korean person.
                    (L) Any person knowingly 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, including 
                        systems designed in whole or in part for the 
                        delivery of such weapons; or
                            (ii) may contribute to significant 
                        activities undermining cybersecurity.
            (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.
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