A number of groups and individuals have recently focused attention on U.S. rules governing imports from North Korea. Their interest has been sparked by the debate over the South Korea-U.S. Free Trade Agreement (KORUS FTA), which would lower or eliminate U.S. tariffs and non-tariff barriers on most imports from South Korea. Some, particularly the agreement's opponents, argue that the agreement could lead to increased U.S. imports of goods or components made in North Korea. The KORUS FTA will not enter into force unless Congress approves implementation legislation, which Obama Administration officials have said they expect to send to the 112 th Congress. As a result of North Korea's relative economic isolation, the undeveloped state of its export sector, and U.S. trade restrictions, the United States imports virtually no finished goods from North Korea. Between 2000 and 2010, cumulative U.S. bilateral imports of finished North Korean goods totaled $335,700, which is equivalent to a rounding error in annual U.S. trade flows with most countries. Nearly half of this amount consisted of stamps, with another 40% or so consisting of women's clothing. Since 2005, according to U.S. trade data, the only finished imports that have entered the United States from North Korea have been $8,363 worth of stamps, which were imported in June 2010. Imports of finished North Korean goods have literally been zero in four of the past five years. Those concerned that the KORUS FTA would change this situation focus considerable attention on the Kaesong Industrial Complex (KIC), a seven-year-old industrial park located in North Korea just across the demilitarized zone, where more than 100 South Korean manufacturers employ over 45,000 North Korean workers at relatively low wages. Critics argue that South Korean firms could obtain low-cost Kaesong-made goods or components, incorporate the latter into finished products such as electronics or automobiles, and then reship the final goods to the United States with "Made in [South] Korea" labels. If the KORUS FTA were in effect, the argument runs, these goods might receive preferential treatment, to the benefit of the North Korean government, which receives revenue from the KIC. The first section of this report examines existing U.S. rules and practices governing imports from North Korea. The second section analyzes the two main portals through which North Korea conducts its minimal economic interaction with the outside world: the KIC and China. The third section addresses the issue of how, if at all, the KORUS FTA would affect potential U.S. imports of North Korean content, including whether the agreement could result in legal action against the U.S. government if it kept out imports of North Korean content. Though the United States requires licenses for all imports from North Korea and severely restricts exports to that country, it no longer maintains the comprehensive embargo that was in place for years after the Korean War (1950-1953). In 1999, President Clinton significantly loosened restrictions on U.S. exports to and imports from North Korea except those involving national security concerns. The Departments of Commerce, Treasury, and Transportation issued new regulations a year later that implemented the new policy. In 2008, President Bush terminated the exercise of Trading With the Enemy Act (TWEA) authorities with regard to North Korea and removed the North Korean government from the list of state sponsors of acts of international terrorism. At the same time, the President declared a new national emergency to continue to block assets that had been frozen as of June 2000 and to continue restrictions related to DPRK-flagged vessels. Throughout this period, from the 1950 outbreak of the Korean War through the 2008 removal of the DPRK-related Trading With the Enemy Act authorities and state sponsor of terrorism designation, importing from North Korea was either highly circumscribed or banned altogether. Though President Bush removed these two obstacles to trade relations, North Korea remained subject to import restrictions based on requirements in the Arms Export Control Act and related determinations that North Korean entities were engaged in missile proliferation activities. In August 2010, President Obama invoked national emergency authorities granted his office in the International Emergency Economic Powers Act and the National Emergencies Act to block assets of any individual and entity found to be importing luxury items into North Korea, and to block assets of targeted individuals and entities engaged in proliferation, money laundering, counterfeiting of goods or currency, bulk cash smuggling, narcotics trafficking, or other illicit economic activity. On April 18, 2011, the President expanded on his 2010 actions to prohibit imports from North Korea. Direct and indirect importation of goods, services, and technology from North Korea is prohibited, and "unless exempt, all imports into the United States from North Korea must be authorized." From late 2008 to 2010, the North Korean government made a series of provocative decisions, including walking away from the Six-Party denuclearization negotiations, testing short-range and long-range ballistic missiles, claiming to have successfully detonated a nuclear explosive device, violating U.N. Security Council resolutions, presumably sinking a South Korean naval vessel (the Cheonan ), and launching artillery shells at the South Korean island of Yeongpyeong. In May 2010, a six-nation, civilian-military ad hoc group determined that North Korea was complicit in the Cheonan 's sinking. In considering how imports from North Korea are treated under U.S. laws and regulations, it is necessary to distinguish between two concepts: (1) whether North Korean finished goods or components are admissible (i.e., allowed) into the United States; and (2) the tariff treatment of goods that are deemed to be admissible. One may not import directly from North Korea without approval from OFAC; this applies to all imports from North Korea. The President's executive order of April 2011 states Except to the extent provided in statutes or in licenses, regulations, orders, or directives that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the date of this order, the importation into the United States, directly or indirectly, of any goods, services, or technology from North Korea is prohibited. The Office of Foreign Assets Control prohibits all transactions that are first prohibited by Executive Orders 13466 (continuing some prohibitions imposed under Trading With the Enemy Act authorities), 13551 (prohibiting transactions with designated persons and entities), and 13570 (prohibiting unlicensed direct or indirect importation into the United States from North Korea). The Secretary of the Treasury (or OFAC, as delegated), in consultation with the State Department, is authorized by the President to promulgate the regulations and rules required to implement the purposes of the executive order. OFAC is authorized to issue licenses for engaging in transactions, including those required to import from North Korea. The President retains authority to revise or revoke the executive order at any time if he finds national emergency conditions no longer exist. Executive orders invoking a national emergency require annual renewal, however, to remain in force. Importers seeking to bring North Korean goods into the United States through a third country must have OFAC approval to do so. The President reiterated this in the executive order of April 18, 2011, stating, "except to the extent provided … the importation into the United States, directly or indirectly, of any goods, services, or technology from North Korea is prohibited." The importation of finished goods made with North Korean components is also prohibited, as stated in OFAC guidance issued following the President's 2011 executive order, which provides that goods, services, and technology from North Korea may not be imported into the United States, directly or indirectly, without a license from OFAC. This broad prohibition applies to goods, services, and technology from North Korea that are used as components of finished products of, or substantially transformed in, a third country. New regulations issued by OFAC in June 2011 implement the license requirements for both direct and indirect importing. Although the updated North Korea Sanctions regulations (31 C.F.R. Part 510) do not expressly address such issues as the treatment of North Korean component parts used in third-country manufacturing, OFAC has stated that it "intends to supplement" its June 2011 regulations "with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance and additional general licenses and statements of licensing policy." The relatively small amount of import trade with North Korea presumably accounts for the skeletal nature of the past regulatory regime. If North Korea's export sector expands significantly, the scope and timing of any elaboration of U.S. regulatory requirements may be affected as well. The North Korean economy is one of the world's most isolated. The DPRK's stated policy of self-reliance ( juche ), its suspicion of foreign countries, and the collapse of its industrial base since the late 1980s have resulted in an extremely low level of commercial and financial relations with other nations in the world. Over the course of the 2000s, North Korea's significant export markets shrunk to two countries, South Korea and China, which in 2010 appear to have accounted for over three-quarters of North Korea's export shipments. North Korea's exports to South Korea have increased by nearly 25% since 2006, though at $1 billion in 2010, they are still at a relatively low level. Over time, a greater proportion of these exports have been due to the activities at the Kaesong Industrial Complex. This phenomenon accelerated in 2010, when South Korea halted virtually all non-KIC trade with North Korea following the Cheonan 's sinking in March 2010. By the end of February 2011, almost all of North Korea's exports to South Korea were attributable to activities in the KIC. By the end of 2010, over 120 small and medium-sized South Korean manufacturing companies were operating in Kaesong. The facility in 2010 produced $323 million in output.