Otto Warmbier Banking Restrictions Involving North Korea Act of 2019

II 116TH CONGRESS 1ST SESSION S. 667 To impose sanctions with respect to the Democratic People’s Republic of Korea, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 5, 2019 Mr. VAN HOLLEN (for himself and Mr. TOOMEY) introduced the following bill; which was read twice and referred to the Committee on Banking, Hous- ing, and Urban Affairs A BILL To impose sanctions with respect to the Democratic People’s Republic of Korea, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Otto Warmbier Banking Restrictions Involving North 5 Korea Act of 2019’’. 6 (b) TABLE OF CONTENTS.—The table of contents for 7 this Act is as follows: 8 Sec. 1. Short title; table of contents. TITLE I—SANCTIONS WITH RESPECT TO NORTH KOREA VerDate Sep 11 2014 22:14 Mar 21, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\S667.IS S667 pbinns on DSK79D2C42PROD with BILLS 2 •S 667 IS Sec. 101. Findings. Sec. 102. Sense of Congress. Sec. 103. Definitions. Subtitle A—Expansion of Sanctions and Related Matters Sec. 111. Sanctions with respect to foreign financial institutions that provide financial services to certain sanctioned persons. Sec. 112. Codification of Executive orders relating to sanctions with respect to North Korea. Sec. 113. Expansion of mandatory designations under North Korea Sanctions and Policy Enhancement Act of 2016. Sec. 114. Extension of applicability period of proliferation prevention sanctions. Sec. 115. Sense of Congress on identification and blocking of property of North Korean officials. Sec. 116. Modification of report on implementation of United Nations Security Council resolutions by other governments. Sec. 117. Report on use by the Government of North Korea of beneficial owner- ship rules to access the international financial system. Subtitle B—Congressional Review and Oversight Sec. 121. Notification of termination or suspension of sanctions. Sec. 122. Reports on certain licensing actions. Sec. 123. Briefings on implementation and enforcement of sanctions. Sec. 124. Report on financial networks and financial methods of the Govern- ment of North Korea. Sec. 125. Report on countries of concern with respect to transshipment, re- exportation, or diversion of certain items to North Korea. Subtitle C—General Matters Sec. 131. Rulemaking. Sec. 132. Authority to consolidate reports. Sec. 133. Waivers, exemptions, and termination. Sec. 134. Procedures for review of classified information. Sec. 135. Briefing on proliferation financing. TITLE II—DIVESTMENT FROM NORTH KOREA Sec. 201. Authority of State and local governments to divest from companies that invest in North Korea. Sec. 202. Safe harbor for changes of investment policies by asset managers. Sec. 203. Sense of Congress regarding certain ERISA plan investments. Sec. 204. Rule of construction. TITLE III—FINANCIAL INDUSTRY GUIDANCE TO HALT TRAFFICKING Sec. 301. Short title. Sec. 302. Findings. Sec. 303. Sense of Congress. Sec. 304. Coordination of human trafficking issues by the Office of Terrorism and Financial Intelligence. Sec. 305. Strengthening the role of anti-money laundering and other financial tools in combating human trafficking. Sec. 306. Sense of Congress on resources to combat human trafficking. VerDate Sep 11 2014 22:14 Mar 21, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\S667.IS S667 pbinns on DSK79D2C42PROD with BILLS 3 •S 667 IS TITLE I—SANCTIONS WITH 1 RESPECT TO NORTH KOREA 2 SEC. 101. FINDINGS. 3 Congress finds the following: 4 (1) Since 2006, the United Nations Security 5 Council has adopted 10 resolutions imposing sanc- 6 tions against North Korea under chapter VII of the 7 United Nations Charter, which— 8 (A) prohibit the use, development, and pro- 9 liferation of weapons of mass destruction by 10 North Korea; 11 (B) prohibit the supply, sale, or transfer of 12 arms and related materiel to or from North 13 Korea; 14 (C) prohibit the transfer of luxury goods to 15 North Korea; 16 (D) restrict access by North Korea to fi- 17 nancial services that could contribute to nu- 18 clear, missile, or other programs related to the 19 development of weapons of mass destruction; 20 (E) restrict North Korean shipping, includ- 21 ing the registration, reflagging, or insuring of 22 North Korean ships; 23 VerDate Sep 11 2014 22:14 Mar 21, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S667.IS S667 pbinns on DSK79D2C42PROD with BILLS 4 •S 667 IS (F) prohibit, with limited exceptions, 1 North Korean exports of coal, precious metals, 2 iron, vanadium, and rare earth minerals; 3 (G) prohibit the transfer to North Korea 4 of rocket, aviation, or jet fuel, as well as gaso- 5 line, condensates, and natural gas liquids; 6 (H) prohibit new work authorization for 7 North Korean laborers and require the repatri- 8 ation of all North Korean laborers by December 9 2019; 10 (I) prohibit exports of North Korean food 11 and agricultural products, including seafood; 12 (J) prohibit joint ventures or cooperative 13 commercial entities or expanding joint ventures 14 with North Korea; 15 (K) prohibit exports of North Korean tex- 16 tiles; 17 (L) require member countries of the 18 United Nations to seize, inspect, and impound 19 any ship in its jurisdiction that is suspected of 20 violating Security Council resolutions with re- 21 spect to North Korea and to interdict and in- 22 spect all cargo heading to or from North Korea 23 by land, sea, or air; 24 VerDate Sep 11 2014 22:14 Mar 21, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S667.IS S667 pbinns on DSK79D2C42PROD with BILLS 5 •S 667 IS (M) limit the transfer to North Korea of 1 refined petroleum products and crude oil; 2 (N) ban the sale or transfer to North 3 Korea of industrial machinery, transportation 4 vehicles, electronics, iron, steel, and other met- 5 als; 6 (O) reduce North Korean diplomatic staff 7 numbers in member countries of the United 8 Nations and expel any North Korean diplomats 9 found to be working on behalf of a person sub- 10 ject to sanctions or assisting in sanctions eva- 11 sion; 12 (P) limit North Korean diplomatic mis- 13 sions abroad with respect to staff size and ac- 14 cess to banking privileges and prohibit com- 15 merce from being conducted out of North Ko- 16 rean consular or diplomatic offices; 17 (Q) require member states of the United 18 Nations to close representative offices, subsidi- 19 aries, and bank accounts in North Korea; 20 (R) prohibit countries from providing or 21 receiving military training to or from North 22 Korea or hosting North Koreans for specialized 23 teaching or training that could contribute to the 24 VerDate Sep 11 2014 22:14 Mar 21, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S667.IS S667 pbinns on DSK79D2C42PROD with BILLS 6 •S 667 IS programs of North Korea related to the devel- 1 opment of weapons of mass destruction; 2 (S) ban countries from granting landing 3 and flyover rights to North Korean aircraft; 4 and 5 (T) prohibit trade in statuary of North Ko- 6 rean origin. 7 (2) The Government of North Korea has 8 threatened to carry out nuclear attacks against the 9 United States, South Korea, and Japan. 10 (3) The Government of North Korea tested its 11 sixth and largest nuclear device on September 3, 12 2017. 13 (4) According to a report by the International 14 Atomic Energy Agency released in August 2018, 15 ‘‘The continuation and further development of the 16 DPRK’s nuclear programme and related statements 17 by the DPRK are a cause for grave concern. The 18 DPRK’s nuclear activities, including those in rela- 19 tion to the Yongbyon Experimental Nuclear Power 20 Plant (5 MW(e)) reactor, the use of the building 21 which houses the reported centrifuge enrichment fa- 22 cility and the construction at the light water reactor, 23 as well as the DPRK’s sixth nuclear test, are clear 24 violations of relevant UN Security Council resolu- 25 VerDate Sep 11 2014 22:14 Mar 21, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S667.IS S667 pbinns on DSK79D2C42PROD with BILLS 7 •S 667 IS tions, including resolution 2375 (2017) and are 1 deeply regrettable.’’. 2 (5) In July 2018, Secretary of State Mike 3 Pompeo testified to the Committee on Foreign Rela- 4 tions of the Senate that North Korea ‘‘continue[s] to 5 produce fissile material’’ despite public pledges by 6 North Korean leader Kim Jong-un to denuclearize. 7 (6) The 2019 Missile Defense Review conducted 8 by the Department of Defense states that North 9 Korea ‘‘continues to pose an extraordinary threat 10 and the United States must remain vigilant. In the 11 past, North Korea frequently issued explicit nuclear 12 missile threats against the United States and allies, 13 all the while working aggressively to field the capa- 14 bility to strike the U.S. homeland with nuclear- 15 armed ballistic missiles. Over the past decade, it has 16 invested considerable resources in its nuclear and 17 ballistic missile programs, and undertaken extensive 18 nuclear and missile testing in order to realize the ca- 19 pability to threaten the U.S. homeland with missile 20 attack. As a result, North Korea has neared the 21 time when it could credibly do so.’’. 22 (7) Financial transactions and investments that 23 provide financial resources to the Government of 24 North Korea, and that fail to incorporate adequate 25 VerDate Sep 11 2014 22:14 Mar 21, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S667.IS S667 pbinns on DSK79D2C42PROD with BILLS 8 •S 667 IS safeguards against the misuse of those financial re- 1 sources, pose an undue risk of contributing to— 2 (A) weapons of mass destruction programs 3 of that Government; and 4 (B) efforts to evade restrictions required 5 by the United Nations Security Council on im- 6 ports or exports of arms and related materiel, 7 services, or technology by that Government. 8 (8) The Federal Bureau of Investigation has 9 determined that the Government of North Korea 10 was responsible for cyberattacks against entities in 11 the United States, South Korea, and around the 12 world. 13 (9) In November 2017, President Donald 14 Trump designated the government of North Korea 15 as a state sponsor of terrorism pursuant to authori- 16 ties under the Export Administration Act of 1979 17 (50 U.S.C. App. 2401 et seq.), as continued in effect 18 at the time under the International Emergency Eco- 19 nomic Powers Act (50 U.S.C. 1701 et seq.), the 20 Foreign Assistance Act of 1961 (22 U.S.C. 2151 et 21 seq.), and the Arms Export Control Act (22 U.S.C. 22 2751 et seq.); 23 (10) On February 22, 2018, the Secretary of 24 State determined that the Government of North 25 VerDate Sep 11 2014 22:14 Mar 21, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S667.IS S667 pbinns on DSK79D2C42PROD with BILLS 9 •S 667 IS Korea was responsible for the lethal nerve agent at- 1 tack in 2017 on Kim Jong Nam, the half-brother of 2 North Korean leader Kim Jong-un, in Malaysia, 3 triggering sanctions required under the Chemical 4 and Biological Weapons Control and Warfare Elimi- 5 nation Act of 1991 (22 U.S.C. 5601 et seq.). 6 (11) The strict enforcement of sanctions is es- 7 sential to the efforts of the international community 8 to achieve the peaceful, complete, verifiable, and ir- 9 reversible dismantlement of weapons of mass de- 10 struction programs of the Government of North 11 Korea. 12 SEC. 102. SENSE OF CONGRESS. 13 It is the sense of Congress that— 14 (1) the United States is committed to working 15 with its allies and partners to halt the nuclear and 16 ballistic missile programs of North Korea through a 17 policy of maximum pressure and diplomatic engage- 18 ment; 19 (2) the imposition of sanctions, including those 20 under this Act, should not be construed to limit the 21 authority of the President to fully engage in diplo- 22 matic negotiations to further the policy objective de- 23 scribed in paragraph (1); 24 VerDate Sep 11 2014 22:14 Mar 21, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S667.IS S667 pbinns on DSK79D2C42PROD with BILLS 10 •S 667 IS (3) the successful use of sanctions to halt the 1 nuclear and ballistic missile programs of North 2 Korea is part of a broader diplomatic and economic 3 strategy that relies on effective coordination among 4 relevant Federal agencies and officials, as well as 5 with international partners of the United States; and 6 (4) the coordination described in paragraph (3) 7 should include proper vetting of external messaging 8 and communications from all parts of the Executive 9 branch to ensure that those communications are an 10 intentional component of and aligned with the strat- 11 egy of the United States with respect to North 12 Korea. 13 SEC. 103. DEFINITIONS. 14 (a) IN GENERAL.—In this title, the terms ‘‘applicable 15 Executive order’’, ‘‘applicable United Nations Security 16 Council resolution’’, ‘‘appropriate congressional commit- 17 tees’’, ‘‘Government of North Korea’’, ‘‘North Korea’’, 18 and ‘‘North Korean financial institution’’ have the mean- 19 ings given those terms in section 3 of the North Korea 20 Sanctions and Policy Enhancement Act of 2016 (22 21 U.S.C. 9202), as amended by subsection (b). 22 (b) AMENDMENTS TO DEFINITIONS IN NORTH 23 KOREA SANCTIONS AND POLICY ENHANCEMENT ACT OF 24 2016.—Section 3 of the North Korea Sanctions and Pol- 25 VerDate Sep 11 2014 22:14 Mar 21, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S667.IS S667 pbinns on DSK79D2C42PROD with BILLS 11 •S 667 IS icy Enhancement Act of 2016 (22 U.S.C. 9202) is amend- 1 ed— 2 (1) in paragraph (1)(A), in the matter pre- 3 ceding clause (i), by striking ‘‘Executive Order No. 4 13694’’ and all that follows through ‘‘to the extent 5 that’’ and inserting the following: ‘‘Executive Order 6 13694 (50 U.S.C. 1701 note; relating to blocking 7 the property of certain persons engaging in signifi- 8 cant malicious cyber-enabled activities), Executive 9 Order 13722 (50 U.S.C. 1701 note; relating to 10 blocking the property of the Government of North 11 Korea and the Workers’ Party of Korea, and prohib- 12 iting certain transactions with respect to North 13 Korea), or Executive Order 13810 (82 Fed. Reg. 14 44705; relating to imposing additional sanctions 15 with respect to North Korea), to the extent that’’; 16 and 17 (2) in paragraph (2)(A), by striking ‘‘or 2321 18 (2016)’’ and inserting ‘‘2321 (2016), 2356 (2017), 19 2371 (2017), 2375 (2017), or 2397 (2017)’’. 20 VerDate Sep 11 2014 22:14 Mar 21, 2019 Jkt 089200 [Text truncated for display. Full text available on Congress.gov.]