The U.S. Treasury Department finalized tough restrictions against North Korea, further preventing it from accessing U.S. financial institutions due to increasing concerns over its illegal money laundering and risk of terrorist financing.
Treasury’s Financial Crimes Enforcement Network enacted the final restrictions against North Korea last week. The final rule prevents financial institutions in the United States from opening or maintaining accounts for North Korean banks. Financial institutions must also be increasingly diligent in preventing North Korean banks from accessing bank accounts in America.
“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 Szubin, acting under secretary for Terrorism and Financial Intelligence. “Such funds have no place in any reputable financial system.”
Section 311 of the USA PATRIOT Act allows the Department of Treasury to take action against countries who are attempting to use U.S. banks for money laundering and terrorist activities. While U.S. banks are already prohibited from conducting transactions with North Korean banks, the action to enact Section 311 offers greater protection against illegal financial activities.
The rule regarding North Korea was proposed in June 2016 as a result of ongoing concerns about North Korea’s money laundering, intent to evade international sanctions and other illegal conduct. The Treasury Department also cited concern the North Korean government was engaging in the development of ballistic missiles and other weapons of mass destruction.