April 17, 2007

This compendium contains the text of major regulations, laws, and other documents governing U.S. interactions with North Korea. Also provided are the text of U.N. Resolutions, agreements, and other documents that represent major policy decisions in U.S. relations with North Korea. Accompanying each major document, law, or regulation is a brief analysis discussing the policy reflected by that document and major significance of the provisions of the law or regulation promulgated.

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As discussed in this compendium, changes in U.S. sanctions over time appear to reflect variations in U.S. approaches to North Korea and its nuclear program – at times reflecting a policy of engagement but at other times displaying a U.S. strategy of trying to isolate North Korea. The documents presented in this compendium demonstrate the wide latitude any U.S. Administration has in implementing sanctions on any country and the corresponding discretion to remove these sanctions.

Since the Korean War, North Korea has been viewed as a potential threat not only by the United States, but also by several major countries in northeast Asia. Although the United States, its allies in Asia, and other Asian countries might sometimes differ on how to deal with North Korea, the United States is not the only country that has imposed sanctions on North Korea. This compendium does not include sanctions laws and regulations imposed by other countries, but it does include U.N. Security Council resolutions that impose sanctions on North Korea. These Resolutions are considered binding on U.N. member states.

The laws and regulations contained in the compendium are not all North Korea-specific. Many of the laws that apply to North Korea do so because of its designation, under 6(j) of the Export Administration Act of 1979, as a state sponsor of terrorism. North Korea was placed on the terrorism list in November 1987 following the downing of KAL Flight 858 by two North Korean agents. At this time, four other countries are also on the “terrorism list” (Cuba, Syria, Iran, and Sudan) and the sanctions generated by inclusion on this list apply to those four countries as well.

Although North Korea is subject to a wide range of U.S. sanctions, there no longer is a ban on trade in civilian goods as was the case immediately following the 1950-1953 Korean War. Trade restrictions in place currently are designed not to prevent U.S.-North Korea trade in purely civilian goods, but primarily to prevent the flow of dual-use technology to North Korea and to prevent North Korea from earning hard currency through purported illicit activities.

Many of the sanctions documents presented in this compendium are incorporated into Title 31 of the Code of Federal Regulations. The major portions of the regulations that apply to North Korea are included in the compendium. The regulations are administered by the U.S. Treasury Department’s Office of Foreign Assets Control, which is responsible for evaluating and issuing specific licenses, when required, for commerce and financial transactions with North Korea.

Included in this compendium are provisions of law that establish “secondary sanctions” against North Korea – sanctions on third countries that provide prohibited assistance to the subject country. The most notable examples of secondary sanctions are provisions of the Foreign Assistance Act that were added by the Anti-Terrorism and Effective Death Penalty Act of 1996. U.S. allies and other governments widely criticize such sanctions as an extraterritorial application of U.S. law, and successive U.S. Administrations have been generally hesitant to impose actual penalties under these laws because of the likelihood of diplomatic backlash. Such backlash, in the view of successive Administrations, defeats the very purpose of U.S. diplomacy, which is to build international consensus on how to deal with states that are perceived as threats to U.S. or regional security arrangements.

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