Treasury Finalizes Action to Further Restrict North Korea’s Access to the U.S. Financial System

WASHINGTON – The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) today issued a final rule under Section 311 of the USA PATRIOT Act to further restrict North Korea’s access to the U.S. financial system. Specifically, the final rule prohibits U.S. financial institutions from opening or maintaining correspondent accounts for North Korean banks and also requires U.S. financial institutions to apply additional due diligence measures in order to prevent North Korean financial institutions from gaining improper indirect access to U.S. correspondent accounts. The rule was proposed in June 2016 along with publication of the notice of finding that North Korea is a jurisdiction of “primary money laundering concern” engaged in illicit conduct, including using state-controlled financial institutions and front companies to engage in proliferation of WMD and ballistic missiles and to evade international sanctions. “North Korea continues to use front companies and agents to conduct illicit financial transactions—some of which support the proliferation of WMD and the development of ballistic missiles—and evade international sanctions,” said Adam J. Szubin, Acting Under Secretary for Terrorism and Financial Intelligence. “Such funds have no place in any reputable financial system.”