North Korea is an isolated society with a centrally planned economy and a centrally controlled political system. The governing regime assumed power after World War II. Successive generations of a single family have ruled North Korea since its founding. According to the CIA World Factbook, under dictator Kim Jong Un, the grandson of regime founder Kim Il Sung, the regime currently controls all aspects of political life, including the legislative, judicial, and military structures. According to a Library of Congress country study, the North Korean leadership rewards members of the primary political party (the Korean Workers’ Party) and the military establishment with housing, food, education, and access to goods. Much of the population, however, lives in poverty, with limited education, travel restrictions, a poor health care system, no open religious institutions or spiritual teaching, and few basic human rights. North Korea exports commodities such as minerals, metallurgical products, textiles, and agricultural and fishery products. According to the CIA World Factbook, the North Korean economy is one of the world’s least open economies. The CIA World Factbook reported that as of 2012, its main export partners were China and South Korea. China is North Korea’s closest ally and accounts for almost two-thirds of its trade. North Korea has engaged in a number of acts that have threatened the security of the United States and other UN member states. Since 2006, North Korea has conducted a number of missile launches and detonated three nuclear explosive devices; torpedoed a South Korean naval vessel, the Cheonan, killing 46 crew members; and launched a disruptive cyberattack against a U.S. company, Sony Pictures Entertainment. In response to these actions, the United States and the UN imposed sanctions specific to North Korea from 2006 through 2015 (see fig. 1). The United States has imposed sanctions on North Korea and North Korean persons under EOs and a number of laws and regulations. EOs are issued by the President and generally direct the executive branch to either carry out actions or clarify and further existing laws passed by Congress. Administrations have invoked authority provided by the International Emergency Economic Powers Act, as well as other authorities, to issue EOs specific to North Korea. The UN Security Council issued five UNSCRs imposing sanctions specific to North Korea during this time period. (See fig. 1.) U.S. EOs specific to North Korea and the Iran, North Korea, and Syria Nonproliferation Act (INKSNA) authorize the United States to impose sanctions targeting activities that include weapons of mass destruction proliferation, trade in arms and related materiel, and transferring luxury goods. Sanctions that can be imposed pursuant to the EOs and INKSNA include blocking property and banning U.S. government procurement. UNSCRs target similar activities, and under the UN Charter, all 193 UN member states are required to implement sanctions imposed by the UNSCRs, such as travel bans, on North Korean and other persons involved in these activities. U.S. EOs specific to North Korea and INKSNA authorize the United States to impose sanctions targeting activities that include involvement in North Korean WMD and conventional arms proliferation and transferring luxury goods to North Korea. The most recent EO targets a person’s status as opposed to a person’s conduct. The EO targets a person’s status by authorizing the imposition of sanctions on persons determined, for example, to be agencies, instrumentalities, or controlled entities of the government of North Korea or the Workers’ Party of Korea. Table 1 provides examples of the activities and statuses targeted by EOs and INKSNA.registration of a vessel in North Korea by a U.S. person, and EO 13570 In addition, EO 13466 prohibits activities such as the generally prohibits a U.S. person from importing North Korean goods, services, or technology from North Korea. Sanctions that can be imposed pursuant to the EOs and law listed above include blocking property and interests in property in the United States, and banning U.S. government procurement and assistance. The EOs listed in table 1 create a framework within which the executive branch can decide when to impose sanctions against specific persons within the categories established by the EOs, according to Treasury and State officials. Treasury officials informed us that the process of determining whether to impose sanctions on one or more persons is (1) the result of a process wholly under the executive branch, and (2) driven by policy directives that prioritize issues of concern for the agencies. Treasury officials also noted that while Treasury does not consider itself to have discretion on whether or not to implement an EO, there is discretion at the interagency level regarding what sanctions programs should be focused on for individual designations, and how resources should be allocated among all relevant programs. INKSNA requires the President to provide reports every 6 months to two congressional committees that identify every foreign person with respect to whom there is credible information indicating that the person, on or after the dates specified in the act, has transferred to, or acquired from, North Korea, Syria, or Iran certain items listed by multilateral export control regimes, or certain nonlisted items that could materially contribute to weapons of mass destruction systems or cruise or ballistic missile systems. It does not require the President to sanction those persons, although it does require him or her to notify the congressional committees if he or she opts not to impose sanctions, including a written justification that supports the President’s decision not to exercise this authority. The President has delegated INKSNA authorities to the Secretary of State. State refers to section 73 of the Arms Export Control Act and section 11B of the Export Administration Act collectively as the Missile Sanctions laws. See 22 U.S.C. § 2797b and 50 U.S.C. App. § 2410b. Macao bank (Banco Delta Asia SARL).facilitation of financial transactions conducted by North Korean– related accounts that related to money laundering and illicit activities, including trade in counterfeit U.S. currency, counterfeit cigarettes, and narcotics, as grounds for its action. Five UNSCRs target North Korean–related activities that include WMD proliferation, cash transfers, and trade in luxury goods to North Korea (see table 2). Under the UN Charter, all 193 UN member states are required to implement sanctions in the UNSCRs that include imposing an arms embargo, prohibiting travel, and freezing assets. State officials told us that UN sanctions can amplify U.S. development of bilateral sanctions specific to North Korea, and that the United States has imposed sanctions beyond those required by UNSCRs. According to State officials, the United States has implemented the sanctions within the UNSCRs, pursuant to authorities including the United Nations Participation Act of 1945. U.S. officials informed GAO that obtaining information on North Korean persons has hindered the U.S. interagency process for imposing sanctions, and that a recent EO has provided them with greater flexibility to sanction persons based on their status as government or party officials rather than evidence of specific conduct. EO 13687 allows State and Treasury to sanction persons because they are officials of the North Korean government or of the Worker’s Party of Korea, instead of based on specific conduct. State and Treasury impose sanctions following an interagency process that involves reviewing intelligence and other information to develop evidence needed to meet standards set by U.S. laws and EOs, vetting possible actions within the U.S. government, determining whether and when to sanction, and announcing sanctions decisions. Since 2006, the United States has imposed sanctions on 86 North Korean persons, including 13 North Korean government officials and entities, under EO 13687. Commerce is the U.S. government agency that controls exports by issuing licenses for shipping goods that are not prohibited to North Korea. Agency officials cited obtaining sufficient information about North Korean persons to be their greatest challenge in making sanctions determinations. Most North Korea–specific sanctions authorities require a determination that a person engaged in a specific activity. Officials said that for sanctions to be effective, financial institutions need a minimum set of identifying information so that they can ensure they are blocking the right person. However, officials said that gathering information on the activities of North Korean persons and personal identifying information can be difficult because of the nature of North Korean society, whose citizens are tightly controlled by the government. Without sufficient information, the United States could mistakenly designate and therefore block the assets of the wrong person, particularly one with a common surname. State officials also cited obtaining sufficient information as a challenge to North Korean sanctions implementation, especially if the sanctions authority requires information indicating that the foreign person knowingly engaged in sanctionable activities. Officials in both agencies also said that they face challenges in obtaining information that can be made public in the Federal Register. Sony Cyberattacks On November 24, 2014, Sony Pictures Entertainment experienced a cyberattack that disabled its information technology, destroyed data, and released internal e-mails. Sony also received e-mails threatening terrorist attacks on theaters scheduled to show a film, The Interview, which depicted the assassination of Kim Jong Un. The Federal Bureau of Investigation and the Director of National Intelligence attributed these cyberattacks to the North Korean government. State and Treasury officials informed us that EO 13687, issued on January 2, 2015, gives them greater flexibility to impose sanctions despite the lack of complete information about persons’ activities. Treasury officials noted that sanctions under EO 13687 are status-based rather than conduct-based, which means that the EO allows agencies to sanction persons, for example, based on their status as North Korean government officials, rather than on their engagement in specific activities. EO 13687 allows Treasury to designate persons based solely on their status as officials, agencies, or controlled entities of the North Korean government, and to designate other persons acting on their behalf or providing them with material support. According to Treasury, EO 13687 represents a significant broadening of Treasury’s authority to increase financial pressure on the North Korean government and to further isolate North Korea from the international financial system. The White House issued the EO in response to North Korean cyberattacks on Sony Pictures Entertainment in November and December 2014. Treasury officials also noted that although the new authority allows them to target any North Korean government official, they continue to target activities prohibited under current sanctions, such as WMD proliferation. Treasury and State officials informed us that they have established processes to determine when and if the United States should impose sanctions related to North Korea. The processes involve reviewing evidence to identify sanctions targets, ensuring that they have adequate evidence to sanction, and imposing and publicizing the sanctions. (See fig. 2.) For North Korea–specific sanctions that fall under Treasury’s jurisdiction, Treasury officials said they investigate and collaborate with other U.S. government agencies to identify specific targets. The Office of Foreign Assets Control investigates the target’s activities and communicates with Treasury and other agency officials about the potential target. Where appropriate, Treasury will notify foreign authorities of the activities of the targeted person and seek commitment to stop the activity. State’s Bureau of International Security and Nonproliferation’s Office of Counterproliferation Initiatives leads an interagency process to evaluate whether a person’s activities are potentially sanctionable under EO 13382, which targets proliferation of weapons of mass destruction. The Office of Missile, Biological and Chemical Nonproliferation, also under the Bureau of International Security and Nonproliferation, leads the process for INKSNA, EO 12938, and the Missile Sanctions laws. The process begins with four State-led interagency working groups responsible for coordinating nonproliferation efforts involving (1) chemical and biological weapons, (2) missile technology, (3) nuclear technology, and (4) advanced conventional weapons. Each working group is chaired by a State official and consists of representatives from several U.S. government departments and agencies such as the Departments of Defense, Commerce, Homeland Security, Treasury, and Energy; the Federal Bureau of Investigation; and various intelligence community agencies. State officials said that the working groups regularly evaluate reports concerning proliferation-related activities and determine an appropriate response to impede activities of concern. As part of this review process, these groups identify transactions that may be sanctionable under various nonproliferation sanction authorities, including those related to North Korea. According to State and other working group officials, the interagency review process relies on criteria defined in the laws and EOs when assessing a transaction for the potential application of those sanctions. State officials also said the groups do not pursue sanctions for a target if they determine available information does not provide a basis for applying sanctions or is not legally sufficient. Officials in each agency said that they follow an evidence-based process to gain inter- and intra-agency consensus on imposing sanctions. At Treasury, Office of Foreign Assets Control officials said that they create an evidentiary record that contains the information they have gathered on a targeted person to present sufficient evidence that the person has engaged in sanctionable activity. The record contains identifying information such as date of birth, place of birth, or passport information, or if the targeted person is a company, the identifying information might be an address or telephone number. After the Office of Foreign Assets Control has approved this document, it is further reviewed for legal sufficiency by the Department of Justice, Department of State, and other relevant agencies. At State, the Offices of Counterproliferation Initiatives and Missile, Biological and Chemical Nonproliferation draft a statement of facts that provides a summary of intelligence available on a targeted transaction. Concurrently, State drafts a policy memo that explains the legal justification for the case. State circulates these documents internally and obtains advice from appropriate agencies and, in the case of actions targeted under EO 13382, consults with Treasury’s Office of Foreign Assets Control. Officials from the Offices of Counterproliferation Initiatives and Missile, Biological and Chemical Nonproliferation also said they circulate a decision memorandum to relevant stakeholders for approval. Officials at State and Treasury also told us that their process includes steps for making and announcing final sanctions determinations. At Treasury, the Office of Foreign Assets Control makes the final determination. Officials then publicize the sanctions in the Federal Register. At State, once the stakeholders have cleared the memorandum, the Offices of Counterproliferation Initiatives and Missile, Biological and Chemical Nonproliferation forward it to the Secretary of State or his or her designee for a final sanctions determination. They then prepare a report on imposed sanctions for publication in the Federal Register. When State or Treasury makes a determination that results in blocked assets, Treasury places the sanctioned person on the Specially Designated Nationals and Blocked Persons (SDN) list indicating that the person’s assets are blocked. Pursuant to regulation, U.S. persons, including banks, are required to block any assets of such persons that are in their possession or that come within their possession.consequence of the blocking, U.S. persons are generally prohibited from engaging in activities with the property or interests in property of persons As a on the SDN list. U.S. citizens are generally prohibited from doing business with individuals and persons on the SDN list.noted that persons’ status on this list does not expire, but persons may apply to be taken off the list. However, no North Korean person has asked for his or her name to be removed. Since 2006, the United States has imposed sanctions on 86 North Korean persons under five EOs, INKSNA, and Missile Sanctions laws (see table 3). The most frequently used EO during this time period was EO 13382, which, as noted above, is not specific to North Korea. Treasury imposed the most recent sanctions on North Korean persons in January 2015, in response to North Korea’s cyberattacks on Sony Pictures. In response, Treasury placed 10 North Korean individuals on the SDN list, and updated information about 3 persons on the list. State and Treasury have used EO 13382 most frequently—43 times in 10 years—to impose sanctions on North Korean persons that they found had engaged in activities related to WMD proliferation. For example, in March 2013, Treasury used EO 13382 to designate the following for sanctions: North Korea’s primary foreign exchange bank, which facilitated millions of dollars in transactions that benefited North Korean arms dealing. The chairman of the North Korean committee that oversees the production of North Korea’s ballistic missiles. Three North Korean government officials who were connected with North Korea’s nuclear and ballistic weapons production. According to the Federal Register notice, the United States imposed sanctions on these persons because State determined that they “engaged, or attempted to engage, in activities or transactions that have materially contributed to, or pose a risk of materially contributing to, the proliferation of WMD 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, by any person or foreign country of proliferation concern.” Commerce’s Bureau of Industry and Security requires those exporters who wish to ship items to North Korea to obtain a license for dual-use items that are subject to the Export Administration Regulations. Dual- use items are goods and technology that are designed for commercial use but could have military applications, such as computers and telecommunications equipment. In general, the Bureau of Industry and Security reviews applications for items requiring a license for export or reexport to North Korea and approves or denies applications on a case- by-case basis. According to the Bureau of Industry and Security, it will deny a license for luxury goods or any item that could contribute to North Korea’s nuclear-related, ballistic missile–related, or other WMD-related programs. Commerce officials informed us that they receive relatively few requests for licenses to export items to North Korea and in most of these cases Commerce issues a license because most of the applications are for humanitarian purposes. In 2014, the Bureau of Industry and Security approved licenses for items such as telecommunications equipment and medical devices, as well as water well–drilling equipment and volcanic seismic measuring instruments. Commerce does not require a license to export some items, such as food and medicine, to North Korea. Commerce officials informed us that, under the Export Administration Regulations, the Bureau of Industry and Security, in consultation with the Departments of Defense and State, will generally approve applications to export or reexport humanitarian items, such as blankets, basic footwear, and other items meeting subsistence needs that are intended for the benefit of the North Korean people. For example, it will approve items in support of UN humanitarian efforts, and agricultural commodities or medical devices that the Bureau of Industry and Security determines are not luxury goods. While UN sanctions have a broader reach than U.S. sanctions because all UN member states are obligated to implement and enforce them, the UN does not know the extent to which members are actually implementing its sanctions. The UN process for imposing sanctions on North Korea or related persons relies on a Security Council committee and a UN panel of experts that investigates suspected violations of North Korea sanctions and recommends actions to the UN. The panel has found North Korean persons using illicit techniques to evade sanctions and trade in arms and related material and has designated 32 North Korean or related entities for sanctioning since 2006, including a North Korean company found to be shipping armaments from Cuba to North Korea. However, while the UN calls upon member states to submit reports describing the steps or measures they have taken to implement effectively specified sanctions provisions, fewer than half have done so. According to UN and U.S. officials, many member states lack the technical capacity to develop the reports and implement sanctions. Member state delegates to the UN Security Council and U.S. officials agree that the lack of reports from all member states is an impediment to UN sanctions implementation. Member state delegates to the UN Security Council informed us that the UN has established a process to determine when and if to impose sanctions on persons that have violated the provisions of UNSCRs. The process involves the Security Council committee established pursuant to Security Council Resolution 1718 that oversees UN sanctions on North Korea; the Panel of Experts, which reviews information on violations of North Korea sanctions sent by member states and conducts investigations based on requests from the committee; and member states whose role is to implement sanctions on North Korea as required by various UN Security Council resolutions. (See fig. 3.) The UN established the committee in 2006. It consists of 15 members, including the 5 permanent members of the United Nations Security Council and 10 nonpermanent members. The committee makes all decisions by consensus and is mandated to seek information from member states regarding their actions to implement the measures imposed by UNSCR 1718. It is also mandated to examine and take action on information regarding alleged sanctions violations, consider and decide upon requests for exemptions, determine additional items to be added to the list of sanctioned goods, designate individuals and entities for sanctions, promulgate guidelines to facilitate the implementation of sanctions measures, and report at least every 90 days to the UN Security Council on its work overseeing sanctions measures set out in United Nations Security Council resolution 1718 on North Korea. The Panel of Experts was established in 2009 as a technical body within the committee. Pursuant to UNSCR 1874, the panel is tasked with, among other things, gathering, examining, and analyzing information regarding incidents of noncompliance with United Nations Security Council sanctions on North Korea. The panel was originally created for a 1-year period, but the Security Council extended the panel’s mandate in subsequent resolutions. The panel acts under the committee’s direction to implement its mandate to gather, examine, and analyze information from member states, relevant UN bodies, and other interested parties regarding North Korea sanctions implementation. The panel does not have enforcement authority and relies on the cooperation of member states to provide information that helps it with its investigations. The panel consists of eight subject matter experts from UN member states, including representatives from the council’s 5 permanent members. The Secretary General appoints panel members, who currently are from China, France, Japan, Russia, South Africa, South Korea, the United Kingdom, and the United States. According to the UN, these subject matter experts specialize in technical areas such as WMD arms control and nonproliferation policy, customs and export controls, finance, missile technology, maritime transport, and nuclear issues. According to a representative of the committee, panel members are not intended to represent their countries, but to be independent in order to provide objective assessments. According to UN guidance, the panel reviews public information and conducts investigative work on incidents or events, and consults foreign governments and seeks information beyond what member states provide them. Representatives of the U.S. Mission to the United Nations (USUN) informed us that the United States and other countries provide the panel with information to help facilitate investigations. The UN Security Council encourages UN member states to respond promptly and thoroughly to the panel’s requests for information and to invite panel members to visit and investigate alleged violations of the sanctions regime, including inspection of items that might have been seized by national authorities. Following investigations of suspected sanctions violations, the panel submits investigative reports (incident reports) to the committee detailing its findings and recommendations on how to proceed, according to UN guidance. The panel treats its incident reports as confidential and provides access only to committee and Security Council members. According to a representative of the committee, the committee considers the violations and recommendations and makes sanctions designations based on the consensus of committee members. According to a representative of the committee, if the committee does not reach consensus, it can refer the case to the UN Security Council, pending member agreement Ultimately, the UN Security Council determines whether or not recommended designations meet the criteria for sanctions, according to a representative of the committee. If the decision is affirmative, it takes action by making sanctions designations mostly through new resolutions. This process has resulted in 32 designations since 2006. All but one of these designations were made through new resolutions, according to a USUN official. For example, the committee designated the Ocean Maritime Management Company for sanctions through the committee process in July 2014. The panel is generally required, with each extension of its mandate, to provide the committee with an interim and final report, including findings and recommendations. The panel’s final reports have identified North Korea’s use of evasive techniques to export weapons. The panel’s 2014 final report described North Korea’s attempt to illicitly transport arms and related materiel from Cuba to North Korea concealed underneath thousands of bags of sugar onboard the North Korean vessel Chong Chon Gang. North Korea’s use of evasive techniques in this case was blocked by actions taken by Panama, a UN member state. Panamanian authorities stopped and examined the Chong Chon Gang vessel as it passed through Panama’s jurisdiction. After uncovering items on the vessel that it believed to be arms and related materiel, Panama alerted the committee of the possible UN sanctions violation. According to representatives of the committee, Panama cooperated with the panel as it conducted its investigation. The panel concluded that the shipment was in violation of UN sanctions and that it constituted the largest amount of arms and related materiel interdicted to North Korea since the adoption of UNSCR 1718. The committee placed the shipping company that operated the Chong Chon Gang on its sanctioned entities list. The panel’s investigations have also uncovered evidence of North Korea’s efforts to evade sanctions by routing financial transactions in support of North Korea’s procurement of sanctioned goods through intermediaries, including those in China, Malaysia, Singapore, and Thailand. For instance, in its investigation of the Chong Chon Gang case, the panel found that the vessel operator, North Korea’s Ocean Maritime Management Company, Limited, used foreign intermediaries in Hong Kong, Thailand, and Singapore to conduct financial transactions on its behalf. The panel also identified that in most cases the investigated transactions were made in United States dollars from foreign-based banks and transferred through corresponding bank accounts in the United States. The panel’s 2015 final report indicated that North Korea has successfully bypassed banking organizations’ due diligence processes by initiating transactions through other entities on its behalf. The panel expressed concern in its report regarding the ability of banks in countries with less effective banking regulations or compliance institutions to detect and prevent illicit transfers involving North Korea. The panel’s reports also reveal the essential role played by member states in implementing UN sanctions and that some member states have not been as well informed as others in working with the panel regarding sanctions implementation. For example, the panel discovered that the Ugandan government had contracted with North Korea to provide police force training. Ugandan government officials purported that they did not realize that UN sanctions prohibited this type of activity, according to a USUN official. The UN recognized the essential role that member states play when it called upon member states to submit reports on measures or steps taken to implement effectively provisions of specified Security Council resolutions to the committee within 45 or 90 days, or upon request by the committee, of the UN’s adoption of North Korea sanctions measures. UNSCRs 1718, 1874, and 2094, adopted in 2006, 2009, and 2013 respectively, call upon member states to report on the concrete measures they have taken in order to effectively implement the specified provisions For instance, a member state might report on how its of the resolutions.national export control regulations address newly adopted UN sanctions on North Korea. The United States has complied with UN reporting provisions calling on member states to submit implementation reports. U.S. implementation reports can be viewed on the committee’s website, at http://www.un.org/sc/committees/1718/mstatesreports.shtml. submitted one or more reports include member states with major international transit points (such as the United Arab Emirates) or that have reportedly been used by North Korea as a foreign intermediary (such as Thailand). The panel has expressed concern in its 2015 final report that 8 years after the adoption of UNSCR 1718, in 2006, a consistently high proportion of member states in some regions have not reported at all on the status of their implementation. It has also reported that some member states have submitted reports that lack detailed information, or were late, impeding the panel’s ability to examine and analyze information about national implementation. The panel has also reported that member states should improve their reporting of incidents of noncompliance with sanctions resolutions and inspections of North Korean cargo. Appendix III provides information on the status of member state implementation report submissions. U.S. officials and representatives of the committee agree that the lack of detailed reports from all member states is an impediment to the UN’s effective implementation of its sanctions. Through reviewing these reports, the committee uncovers gaps in member state sanctions implementation which helps the committee identify targets for outreach. The panel notes that the lack of detailed information in implementation reports impedes its ability to examine and analyze information regarding member state implementation and its challenges. It also states that member state underreporting increases North Korea’s opportunities to continue its prohibited activities. The panel will not have the information it needs to completely understand North Korea’s evasive techniques if it does not have the full cooperation of member states. U.S. officials and representatives of the committee told us that many member states lack the technical capacity to enforce sanctions and prepare reports. For instance, representatives of the committee told us that some member states may have weak customs and border patrol systems or export control regulatory structures because of the high resource requirements of these programs. In addition, representatives of the committee stated that some member states may lack awareness of the full scope of North Korea sanctions or may not understand how to implement the sanctions. Moreover, some countries may not make the sanctions a high priority because they believe they are not directly affected by North Korea. In addition, member states that are geographically distant from North Korea or lack a diplomatic or trade relationship with it may not see the need to implement the sanctions, according to representatives of the committee. The UN has taken some steps to address this impediment. The committee and the panel provide limited assistance to member states upon request in preparing and submitting reports. For example, the committee has developed and issued a checklist template that helps member states indicate the measures, procedures, legislation, and regulations or policies that have been adopted to address various UNSCR measures relevant to member states’ national implementation reports. A committee member indicated that the committee developed a list of 25 to 30 member states where outreach would most likely have an impact on reporting outcomes. The panel reported in its 2015 final report that it sent 95 reminder letters to the member states that have not submitted implementation reports, emphasizing the importance of submitting reports and that the panel is available to provide assistance. Despite the steps the UN has taken to help member states adhere to reporting provisions, the panel’s 2015 report continues to identify the lack of member states’ reports as an impediment. The panel stated that it is incumbent on member states to implement the measures in the UN Security Council resolutions more robustly in order to counter North Korea’s continued violations, and that while the resolutions provide member states with tools to curb the prohibited activities of North Korea, they are effective only when implemented. State Department officials informed us that the United States has offered technical assistance to some member states for preventing proliferation and implementing sanctions. However, they were unable to determine the extent to which the United States has provided specific assistance aimed at ensuring that member states provide the UN with the implementation reports it needs to assess member state implementation of UN sanctions on North Korea. North Korea’s actions pose threats to the security of the United States and other UN members. Both the United States and the UN face impediments to implementing the sanctions they have imposed in response to these actions. While the United States has recently taken steps to provide more flexibility to impose sanctions, and thereby possibly impose more sanctions on North Korean persons, the United Nations is seeking to address the challenge posed by many UN member states not providing the UN with implementation information. According to U.S. officials, many member states require additional technical assistance to develop the implementation reports needed by the panel. The lack of implementation reports from member states impedes the panel’s ability to examine and analyze information about member state implementation of North Korea sanctions. GAO recommends the Secretary of State work with the UN Security Council to ensure that member states receive technical assistance to help prepare and submit reports on their implementation of UN sanctions on North Korea. We provided a draft of this report to the Departments of State, Treasury, and Commerce for comment. In its written comments, reproduced in Appendix IV, State concurred with our recommendation. Treasury and Commerce declined to provide written comments. State, Treasury, and Commerce provided technical comments, which were incorporated into the draft as appropriate. We are sending copies of this report to the appropriate congressional committees, the Secretaries of State, Treasury, and Commerce, the U.S. Ambassador to the United Nations, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-9601 or melitot@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix V. The United States and the United Nations (UN) Security Council have imposed a wide range of sanctions against North Korea and Iran as part of their broader efforts to prevent the proliferation of weapons of mass destruction. Table 4 compares the major activities targeted by U.S. and UN sanctions on those countries. Officials from the Department of State, the Department of the Treasury, and other sources identified the following factors that may influence the types of sanctions imposed by the United States and the UN on these countries. Different political systems. North Korea is an isolated society that is under the exclusive rule of a dictator who controls all aspects of the North Korean political system, including the legislative and judicial processes. Though Iran operates under a theocratic political system, with a religious leader serving as its chief of state, Iranian citizens participate in popular elections for president and members of its legislative branch. Different economic systems. North Korea has a centrally planned economy generally isolated from the rest of the world. It exports most of its basic commodities to China, its closest ally. Iran, as a major exporter of oil and petrochemical products, has several major trade partners, including China, India, Turkey, South Korea, and Japan. Different social environments. North Korea’s dictatorship tightly controls the activities of its citizens by restricting travel; prohibiting access to the Internet; and controlling all forms of media, communication, and political expression. In contrast, Iranian citizens travel abroad relatively freely, communicate with one another and the world through the Internet and social media, and can hold political protests and demonstrations. This report (1) identifies the activities that are targeted by U.S. and United Nations (UN) sanctions specific to North Korea, (2) describes how the United States implements its sanctions specific to North Korea and examines the challenges it faces in doing so, and (3) describes how the UN implements its sanctions specific to North Korea and examines the challenges it faces in doing so. In appendix I, we compare U.S. and UN North Korea–specific sanctions with those specific to Iran. (See app. I.) To address our first objective, we reviewed U.S. executive orders and laws and UN Security Council resolutions issued from 2006 to 2015 with sanctions related to North Korea. We also interviewed officials from the Department of State (State), the Department of the Treasury (Treasury), and the UN to confirm the universe of North Korea–specific sanctions. We also interviewed these officials to determine any other executive orders, laws, or resolutions not specific to North Korea that they have used to impose sanctions on North Korea during this time period. We then analyzed the executive orders, laws, and resolutions to identify the activities targeted by the sanctions. To address our second objective, we interviewed State and Treasury officials to determine the process that each agency follows to impose sanctions on North Korea and related persons. We also spoke with State, Treasury and Commerce officials to identify the challenges that U.S. agencies face in implementing sanctions related to North Korea. We interviewed Department of Commerce (Commerce) officials to learn about how the U.S. government controls exports to North Korea. We analyzed documents and information from State and Treasury to determine the number of North Korean entities that have been sanctioned since 2006. To address our third objective, we reviewed UN documents and interviewed UN officials to determine the process that the UN uses to impose sanctions on North Korea and related entities. We reviewed United Nations security resolutions relevant to North Korea, 1718 Committee guidelines and reports, and Panel of Expert guidelines and reports. We interviewed relevant officials at the U.S. State Department and traveled to New York to visit UN headquarters and interview officials from the U.S. Mission to the United Nations and members of the UN 1718 Committee. We interviewed two former members of the Panel of Experts to obtain their views on the UN process for making North Korea sanctions determinations. We also reviewed the 1718 Committee’s sanctions list to determine the number of designations the UN has made on North Korean or related entities and the reasons for designating. For examples of how the Panel of Experts has investigated cases of sanctions violations and worked with member states through the investigation process, particularly related to the Cong Chon Gang case, we reviewed the panel’s final reports summarizing its investigation findings and interviewed members of the 1718 Committee involved in conducting the investigation. To determine the extent to which member states are submitting reports on their implementation of UN sanctions on North Korea, we examined the 1718 Committee’s record of member state implementation reports and interviewed 1718 Committee members. To identify the challenges the UN faces related to member state reporting and the efforts the UN has taken to help member states meet reporting provisions of the UN Security Council resolutions (UNSCR), we interviewed U.S. and UN officials, and reviewed 1718 Committee and Panel of Expert reports and documents. To examine the efforts the UN has taken to address the lack of member state reporting, we interviewed members of the UN 1718 Committee and reviewed documents outlining UN outreach efforts. To compare U.S. and UN sanctions specific to North Korea and Iran (see app. I), we reviewed U.S. executive orders, laws, and UN Security Council resolutions with sanctions specific to North Korea and Iran. We analyzed these documents to identify the activities targeted by the sanctions. On the basis of a comprehensive literature review, we developed a list of targeted activities frequently identified in relation to North Korea and Iran sanctions and grouped these activities into high- level categories. To ensure data reliability in categorizing the targeted activities into high-level categories, we conducted a double-blind exercise whereby each member of our team reviewed the activities identified within the U.S. executive orders and laws and UN resolutions for each country and assigned each activity to a high-level category, such as financial transactions with targeted persons. We then compared the results, discussed any differences and reconciled our responses to reach consensus, and developed a matrix to compare the targeted activities for North Korea sanctions with those of Iran sanctions. We interviewed State and Treasury officials to discuss the differences in activities targeted by North Korea and Iran sanctions. To develop appendix III, on United Nations member state implementation report submissions, we examined the UN 1718 Committee’s website record of member state implementation reports. The record of member state implementation reports allowed us to determine the number of member states that have either reported or not reported. Bolivia (Plurinational State of) Micronesia (Federated States of) Venezuela (Bolivarian Republic of) In addition to the contact named above, Pierre Toureille (Assistant Director), Leah DeWolf, Christina Bruff, Mason Thorpe Calhoun, Tina Cheng, Karen Deans, Justin Fisher, Toni Gillich, Michael Hoffman, and Grace Lui made key contributions to this report.

Summary: North Korea is a closely controlled society, and its regime has taken actions that threaten the United States and other United Nations member states. North Korean tests of nuclear weapons and ballistic missiles have prompted the United States and the UN to impose sanctions on North Korea. GAO was asked to review U.S. and UN sanctions on North Korea. This report (1) identifies the activities that are targeted by U.S. and UN sanctions specific to North Korea, (2) describes how the United States implements its sanctions specific to North Korea and examines the challenges it faces in doing so, and (3) describes how the UN implements its sanctions specific to North Korea and examines the challenges it faces in doing so. To answer these questions, GAO analyzed documents from the Departments of State, Treasury, and Commerce, and the UN. GAO also interviewed officials from the Departments of State, Treasury, and Commerce, and the UN. U.S. executive orders (EO) and the Iran, North Korea, and Syria Nonproliferation Act target activities for the imposition of sanctions that include North Korean (Democratic People's Republic of Korea) proliferation of weapons of mass destruction and transferring of luxury goods. The EOs and the act allow the United States to respond by imposing sanctions, such as blocking the assets of persons involved in these activities. United Nations (UN) Security Council resolutions target similar North Korean activities, and under the UN Charter, all 193 UN member states are required to implement sanctions on persons involved in them. U.S. officials informed GAO that obtaining information on North Korean persons has hindered the U.S. interagency process for imposing sanctions, and that EO 13687, announced in January 2015, provided them with greater flexibility to sanction persons based on their status as government officials rather than evidence of specific conduct. State and Treasury impose sanctions following an interagency process that involves: reviewing intelligence and other information to develop evidence needed to meet standards set by U.S. laws and EOs, vetting possible actions within the U.S. government, determining whether to sanction, and announcing sanctions decisions. Since 2006, the United States has imposed sanctions on 86 North Korean persons, including on 13 North Korean government persons under EO 13687. Although UN sanctions have a broader reach than U.S. sanctions, the UN lacks reports from many member states describing the steps or measures they have taken to implement specified sanctions provisions. The UN process for imposing sanctions relies on a UN Security Council committee and a UN panel of experts that investigates suspected sanctions violations and recommends actions to the UN. The Panel of Experts investigations have resulted in 32 designations of North Korean or related entities for sanctions since 2006, including a company found to be shipping armaments from Cuba in 2013. While the UN calls upon all member states to submit reports detailing plans for implementing specified sanctions provisions, fewer than half have done so because of a range of factors including a lack of technical capacity. The committee uses the reports to uncover gaps in sanctions implementation and identify member states that require additional outreach. The United States as a member state has submitted all of these reports. UN and U.S. officials agree that the lack of reports from all member states is an impediment to the UN's implementation of its sanctions. Source: GAO | GAO-15-485 GAO recommends the Secretary of State work with the UN Security Council to ensure that member states receive technical assistance to help prepare and submit reports on their implementation of UN sanctions on North Korea. The Department of State concurred with this recommendation.