Sanctions Update: The US Designates Three Democratic People’s Republic of Korea Officials in Response to Pyongyang’s November ICBM Launches

The United States and other nations have placed economic sanctions on North Korea as part of a strategy to influence the direction and outcomes of its missile program. In our continuously evolving geopolitical landscape, ensuring sanctions compliance has never been more complex and essential than it is now. This blog breaks down the recent sanctions on North Korea and offers some best practices on how to ensure compliance.  

Who is being sanctioned? 

Earlier this month, the U.S. Department of State sanctioned:

• Jon Il Ho, the chair of the Workers’ Party of Korea (WPK) Committee of the Academy for Defense Research and a member of the WPK Central Committee. 
• Yu Jin, a member of the WPK Central Committee.
• Kim Su Gil, the Chief Secretary of the Kangwo’n WPK Provincial Committee and a member of the WPK Central Committee. 

Why are they being sanctioned? 

The Department of State has stated that these recent sanctions are part of an “…ongoing effort to impede the Democratic People’s Republic of Korea’s (DPRK) ability to advance its unlawful ballistic missile and weapons of mass destruction programs. These actions follow the DPRK’s unprecedented launch of over 60 ballistic missiles this year, including the test of several intercontinental ballistic missiles (ICBM).” 

What does this mean for my business? 

These sanctions freeze any US-based assets of the individuals and bar dealings with them. 

While individuals are a key target of sanctions, they are not the only focus. Entities that are tied to sanctioned individuals are also in the crosshairs. Specifically, the Office of Foreign Assets Control’s (OFAC) “50% Rule” calls for any entity that has 50% or more beneficial ownership tied to sanctioned individuals or countries to be reported and blocked. While this is the normal definition of a sanctioned entity, in the current environment, sanctioned entities could be continuously added on the basis of other criteria deemed necessary.

How can I ensure compliance? 

Protecting your charter, your organization’s reputation, and playing a supporting role in resolving the current situation are on the line. Here are five best practices to ensure compliance: 

• Perform an initial risk assessment for your organization.
  If you have a watchlist program in place, all sanctions are administered through OFAC. But you can’t assume everything is covered. In the ever-evolving compliance landscape, your organization’s first step should be to immediately perform a current risk assessment to understand whether there are any risks to your organization from recently expanded or any other sanctions that have been established.

• Encourage organizational awareness and obtain support for rapid response efforts.
  As the nature and scope of the sanctions continue to change, it is vital that teams appropriately brief key executives on the evolving landscape. Both speed and precision will be necessary to ensure compliance over the long run.
• Ensure customer onboarding is protected.
  Be certain your onboarding compliance screening is correctly configured to prevent sanctioned individuals and entities from initially establishing a relationship and transacting with your organization, especially as these individuals potentially seek out new channels to transact.
• Deploy a continuous sanctions-monitoring strategy.
  The current sanctions environment is highly fluid and dynamic. While you may have been able to perform periodic rescreens against your customer list in the past to ensure compliance, that strategy is no longer sufficient in an era of daily, if not hourly, updates to OFAC. It is recommended that your organization rescreen against sanction lists at least daily. But even daily updates still leave some risk of exposure. The best protection for your organization is continuous monitoring so you are alerted in real time to any risks requiring your attention.

How Socure can help

Socure’s Global Watchlist with Monitoring leverages sophisticated matching algorithms, proprietary data, and true continuous monitoring to deliver industry-leading accuracy and uninterrupted compliance with Know Your Customer/Customer Identification Procedures (KYC/CIP) regulations.

 Global Watchlist provides three service levels to customize your coverage for:

• OFAC.
• Specially Designated Nationals (SDN).
• The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCen).
• Global sanctions and enforcement lists.
• Politically exposed persons (PEP).
• Adverse media, and more.

Rather than rely on batch processes that can be time consuming and expose you to risk, Global Watchlist with Monitoring can enable real-time alerting so you are immediately notified of risk and always remain compliant. For example, in the case of these latest sanctions on North Korea, a Socure Global Watchlist with Monitoring customer would have received a notification within 15 minutes of the new additions to the sanctions list if these entities matched an existing customer. 

You can learn more about Global Watchlist with Monitoring here.