Otto Warmbier North Korea Nuclear Sanctions Act
(Sec. 3) This bill directs the Department of the Treasury to prohibit a foreign financial institution that knowingly provides significant financial services to a "covered person" from opening or maintaining a correspondent account in the United States. "Covered person" includes any person doing business with North Korea, any North Korean person employed outside North Korea (unless waived by Treasury), and any person that knowingly employs a North Korean person outside North Korea. The bill establishes civil and criminal penalties for violations.
Treasury must prohibit a U.S.-based financial institution from knowingly engaging in a significant transaction with a covered person. The bill establishes civil penalties for violations.
(Sec. 4) The bill amends the Bretton Woods Agreements Act to direct the United States to oppose international financial assistance for a foreign government that does not implement these sanctions against North Korea. The President may waive this directive after specified steps are taken.
The bill amends the Export-Import Bank Act to prohibit the bank from providing support to a covered person.
(Sec. 5) Treasury must report on compliance with this bill among financial institutions, including any penalties imposed and efforts by Treasury to support compliance.
The bill amends the International Financial Institutions Act to require Treasury to: (1) instruct the U.S. Executive Director at the International Monetary Fund (IMF) to support the use of the IMF's administrative budget for technical assistance that strengthens the capacity of IMF members to prevent money laundering and the financing of terrorism, and (2) report on the effectiveness of such assistance.
(Sec. 6) The President may suspend or terminate sanctions under this bill if certain steps regarding nonproliferation of weapons of mass destruction are taken by North Korea.
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3898 Introduced in House (IH)]
<DOC>
115th CONGRESS
1st Session
H. R. 3898
To require the Secretary of the Treasury to place conditions on certain
accounts at United States financial institutions with respect to North
Korea, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 2, 2017
Mr. Barr (for himself, Mr. Hollingsworth, Ms. Moore, Mr. Perlmutter,
Mr. Hill, and Mr. Vargas) introduced the following bill; which was
referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To require the Secretary of the Treasury to place conditions on certain
accounts at United States financial institutions with respect to North
Korea, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Impeding North Korea's Access to
Finance Act of 2017''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) On June 1, 2016, the Department of the Treasury's
Financial Crimes Enforcement Network announced a Notice of
Finding that the Democratic Republic of North Korea is a
jurisdiction of primary money laundering concern due to its use
of state-controlled financial institutions and front companies
to support the proliferation and development of weapons of mass
destruction (WMD) and ballistic missiles.
(2) The Financial Action Task Force (FATF) has expressed
serious concerns with the threat posed by North Korea's
proliferation and financing of WMD, and has called on FATF
members to apply effective counter-measures to protect their
financial sectors from North Korean money laundering, WMD
proliferation financing, and the financing of terrorism.
(3) In its February 2017 report, the U.N. Panel of Experts
concluded that--
(A) North Korea continued to access the
international financial system in support of illicit
activities despite sanctions imposed by U.N. Security
Council Resolutions 2270 (2016) and 2321 (2016);
(B) during the reporting period, no member state
had reported taking actions to freeze North Korean
assets; and
(C) sanctions evasion by North Korea, combined with
inadequate compliance by member states, had
significantly negated the impact of U.N. Security
Council resolutions.
(4) In its September 2017 report, the U.N. Panel of Experts
found that--
(A) North Korea continued to violate financial
sanctions by using agents acting abroad on the
country's behalf;
(B) foreign financial institutions provided
correspondent banking services to North Korean persons
and front companies for illicit purposes;
(C) foreign companies violated sanctions by
maintaining links with North Korean financial
institutions; and
(D) North Korea generated at least $270 million
during the reporting period through the violation of
sectoral sanctions.
(5) North Korean entities engage in significant financial
transactions through foreign bank accounts that are maintained
by non-North Korean nationals, thereby masking account users'
identity in order to access financial services.
(6) North Korea's sixth nuclear test on September 3, 2017,
demonstrated an estimated explosive power more than 100 times
greater than that generated by its first nuclear test in 2006.
(7) North Korea has successfully tested submarine-launched
and intercontinental ballistic missiles, and is rapidly
progressing in its development of a nuclear-armed missile that
is capable of reaching United States territory.
SEC. 3. CONDITIONS WITH RESPECT TO CERTAIN ACCOUNTS AND TRANSACTIONS AT
UNITED STATES FINANCIAL INSTITUTIONS.
(a) Correspondent and Payable-Through Accounts Held by Foreign
Financial Institutions.--
(1) In general.--Not later than 45 days after the date of
the enactment of this Act, the Secretary of the Treasury shall
prescribe regulations to prohibit, or impose strict conditions
on, the opening or maintaining in the United States of a
correspondent account or a payable-through account by a foreign
financial institution that the Secretary finds knowingly
facilitates a significant transaction or transactions or
provides significant financial services for a covered person.
(2) Penalties.--
(A) Civil penalty.--A person who violates, attempts
to violate, conspires to violate, or causes a violation
of regulations prescribed under this subsection shall
be subject to a civil penalty in an amount not to
exceed the greater of--
(i) $250,000; or
(ii) an amount that is twice the amount of
the transaction that is the basis of the
violation with respect to which the penalty is
imposed.
(B) Criminal penalty.--A person who willfully
commits, willfully attempts to commit, or willfully
conspires to commit, or aids or abets in the commission
of, a violation of regulations prescribed under this
subsection shall, upon conviction, be fined not more
than $1,000,000, or if a natural person, may be
imprisoned for not more than 20 years, or both.
(b) Restrictions on Certain Transactions by United States Financial
Institutions.--
(1) In general.--Not later than 45 days after the date of
the enactment of this Act, the Secretary of the Treasury shall
prescribe regulations to prohibit a United States financial
institution, and any person owned or controlled by a United
States financial institution, from knowingly engaging in a
significant transaction or transactions with or benefitting any
person that the Secretary finds to be a covered person.
(2) Civil penalty.--A person who violates, attempts to
violate, conspires to violate, or causes a violation of
regulations prescribed under this subsection shall be subject
to a civil penalty in an amount not to exceed the greater of--
(A) $250,000; or
(B) an amount that is twice the amount of the
transaction that is the basis of the violation with
respect to which the penalty is imposed.
SEC. 4. OPPOSITION TO ASSISTANCE BY THE INTERNATIONAL FINANCIAL
INSTITUTIONS AND THE EXPORT-IMPORT BANK.
(a) International Financial Institutions.--The Bretton Woods
Agreements Act (22 U.S.C. 286 et seq.) is amended by adding at the end
the following:
``SEC. 73. OPPOSITION TO ASSISTANCE FOR ANY GOVERNMENT THAT FAILS TO
IMPLEMENT SANCTIONS ON NORTH KOREA.
``(a) In General.--The Secretary of the Treasury shall instruct the
United States Executive Director at the international financial
institutions (as defined under section 1701(c) of the International
Financial Institutions Act) to use the voice and vote of the United
States to oppose the provision of financial assistance to a foreign
government, other than assistance to support basic human needs, if the
President determines that, in the year preceding consideration of
approval of such assistance, the government has knowingly failed to
prevent the provision of financial services to, or freeze the funds,
financial assets, and economic resources of, a person described under
subparagraphs (A) through (E) of section 7(2) of the Impeding North
Korea's Access to Finance Act of 2017.
``(b) Waiver.--The President may waive subsection (a) for up to 180
days at a time with respect to a foreign government if the President
reports to Congress that--
``(1) the foreign government's failure described under (a)
is due exclusively to a lack of foreign government capacity;
``(2) the foreign government is taking effective steps to
prevent recurrence of such failure; or
``(3) such waiver is vital to the national security
interests of the United States.''.
(b) Export-Import Bank.--Section 2(b) of the Export-Import Bank Act
of 1945 (12 U.S.C. 635(b)) is amended by adding at the end the
following:
``(14) Prohibition on support involving persons connected
with north korea.--The Bank may not guarantee, insure, or
extend credit, or participate in the extension of credit in
connection with the export of a good or service to a covered
person (as defined under section 7 of the Impeding North
Korea's Access to Finance Act of 2017).''.
SEC. 5. TREASURY REPORTS ON COMPLIANCE, PENALTIES, AND TECHNICAL
ASSISTANCE.
(a) Quarterly Report.--
(1) In general.--Not later than 120 days following the date
of the enactment of this Act, and every 90 days thereafter, the
Secretary of the Treasury shall submit a report to the
Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate that includes--
(A) a list of financial institutions that, in the
period since the preceding report, knowingly
facilitated a significant transaction or transactions
or provided significant financial services for a
covered person, or failed to apply appropriate due
diligence to prevent such activities;
(B) a list of any penalties imposed under section 3
in the period since the preceding report; and
(C) a description of efforts by the Department of
the Treasury in the period since the preceding report,
through consultations, technical assistance, or other
appropriate activities, to strengthen the capacity of
financial institutions and foreign governments to
prevent the provision of financial services benefitting
a person described under subparagraphs (A) through (L)
of section 7(2).
(2) Form of report; public availability.--
(A) Form.--The report required under paragraph (1)
shall be submitted in unclassified form but may contain
a classified annex.
(B) Public availability.--The unclassified portion
of such report shall be made available to the public
and posted on the website of the Department of the
Treasury.
(b) Testimony Required.--Upon request of the Committee on Financial
Services of the House of Representatives or the Committee on Banking,
Housing, and Urban Affairs of the Senate, the Under Secretary of the
Treasury for Terrorism and Financial Intelligence shall testify to
explain the effects of this Act, and the amendments made by this Act,
on North Korea's access to financial services.
(c) International Monetary Fund.--Title XVI of the International
Financial Institutions Act (22 U.S.C. 262p et seq.) is amended by
adding at the end the following:
``SEC. 1629. SUPPORT FOR CAPACITY OF THE INTERNATIONAL MONETARY FUND TO
PREVENT MONEY LAUNDERING AND FINANCING OF TERRORISM.
``The Secretary of the Treasury shall instruct the United States
Executive Director at the International Monetary Fund to support the
use of the administrative budget of the Fund for technical assistance
that strengthens the capacity of Fund members to prevent money
laundering and the financing of terrorism.''.
(d) National Advisory Council Report to Congress.--The Chairman of
the National Advisory Council on International Monetary and Financial
Policies shall include in the report required by section 1701 of the
International Financial Institutions Act (22 U.S.C. 262r) for the
fiscal year following the date of the enactment of this Act a
description of--
(1) the activities of the International Monetary Fund in
the most recently completed fiscal year to provide technical
assistance that strengthens the capacity of Fund members to
prevent money laundering and the financing of terrorism, and
the effectiveness of the assistance; and
(2) the efficacy of efforts by the United States to support
such technical assistance through the use of the Fund's
administrative budget.
SEC. 6. SUSPENSION AND TERMINATION OF PROHIBITIONS AND PENALTIES.
(a) Suspension.--The President may suspend, on a case-by-case
basis, the application of any provision of this Act, or provision in an
amendment made by this Act, for a period of not more than 180 days at a
time if the President certifies to Congress that--
(1) the Government of North Korea has--
(A) committed to the verifiable suspension of North
Korea's proliferation and testing of WMD, including
systems designed in whole or in part for the delivery
of such weapons; and
(B) has agreed to multilateral talks including the
Government of the United States, with the goal of
permanently and verifiably limiting North Korea's WMD
and ballistic missile programs; or
(2) such suspension is vital to the national security
interests of the United States, with an explanation of the
reasons therefor.
(b) Termination.--
(1) In general.--On the date that is 30 days after the date
on which the President makes the certification described under
paragraph (2)--
(A) section 3, subsections (a) and (b) of section
5, and section 6(a) of this Act shall cease to have any
force or effect;
(B) section 73 of the Bretton Woods Agreements Act,
as added by section 4(a), shall be repealed; and
(C) section 2(b)(14) of the Export-Import Bank Act
of 1945, as added by section 4(b), shall be repealed.
(2) Certification.--The certification described under this
paragraph is a certification by the President to the Congress
that--
(A) the Government of North Korea--
(i) has ceased to pose a significant threat
to national security, with an explanation of
the reasons therefor; or
(ii) is committed to, and is taking
effective steps to achieving, the goal of
permanently and verifiably limiting North
Korea's WMD and ballistic missile programs; or
(B) such termination is vital to the national
security interests of the United States, with an
explanation of the reasons therefor.
SEC. 7. DEFINITIONS.
For purposes of this Act:
(1) Terms related to north korea.--The terms ``applicable
Executive order'', ``Government of North Korea'', ``North
Korea'', and ``North Korean person'' have the meanings given
those terms, respectively, in section 3 of the North Korea
Sanctions and Policy Enhancement Act of 2016 (22 U.S.C. 9202).
(2) Covered person.--The term ``covered person'' means the
following:
(A) Any designated person under an applicable
Executive order.
(B) Any North Korean person that facilitates the
transfer of bulk cash or covered goods (as defined
under section 1027.100 of title 31, Code of Federal
Regulations).
(C) Any North Korean financial institution.
(D) Any North Korean person employed outside of
North Korea.
(E) Any person acting on behalf of, or at the
direction of, a person described under subparagraphs
(A) through (D).
(F) Any person that knowingly employs a person
described under subparagraph (D).
(G) Any person that facilitates the import of
goods, services, technology, or natural resources,
including energy imports and minerals, or their
derivatives, from North Korea.
(H) Any person that facilitates the export of
goods, services, technology, or natural resources,
including energy exports and minerals, or their
derivatives, to North Korea, except for food, medicine,
or medical supplies required for civilian humanitarian
needs.
(I) Any person that invests in, or participates in
a joint venture with, an entity in which the Government
of North Korea participates or an entity that is
created or organized under North Korean law.
(J) Any person that provides financial services,
including through a subsidiary or joint venture, in
North Korea.
(K) Any person that insures, registers, facilitates
the registration of, or maintains insurance or a
registration for, a vessel commanded or operated by a
North Korean person.
(L) Any person providing specialized teaching,
training, or information to a North Korean person that
may contribute to North Korea's development and
proliferation of WMD, including systems designed in
whole or in part for the delivery of such weapons.
(3) Financial institution definitions.--
(A) Financial institution.--The term ``financial
institution'' means a United States financial
institution or a foreign financial institution.
(B) Foreign financial institution.--The term
``foreign financial institution'' has the meaning given
that term under section 1010.605 of title 31, Code of
Federal Regulations.
(C) North korean financial institution.--The term
``North Korean financial institution'' includes--
(i) any North Korean financial institution,
as defined in section 3 of the North Korea
Sanctions and Policy Enhancement Act of 2016
(22 U.S.C. 9202);
(ii) any financial agency, as defined in
section 5312 of title 31, United States Code,
that is owned or controlled by the Government
of North Korea;
(iii) any money transmitting business, as
defined in section 5330(d) of title 31, United
States Code, that is owned or controlled by the
Government of North Korea;
(iv) any financial institution that is a
joint venture between any person and the
Government of North Korea; and
(v) any joint venture involving a North
Korean financial institution.
(D) United states financial institution.--The term
``United States financial institution'' has the meaning
given the term ``U.S. financial institution'' under
section 510.310 of title 31, Code of Federal
Regulations.
(4) Knowingly.--The term ``knowingly'' with respect to
conduct, a circumstance, or a result, means that a person has
actual knowledge, or should have known, of the conduct, the
circumstance, or the result.
<all>
Hearings Held by the Subcommittee on Monetary Policy and Trade Prior to Introduction and Referral.
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
Committee Consideration and Mark-up Session Held.
Committee Consideration and Mark-up Session Held.
Ordered to be Reported (Amended) by the Yeas and Nays: 56 - 0.
Reported (Amended) by the Committee on Financial Services. H. Rept. 115-361.
Reported (Amended) by the Committee on Financial Services. H. Rept. 115-361.
Placed on the Union Calendar, Calendar No. 265.
Mr. Barr moved to suspend the rules and pass the bill, as amended.
Considered under suspension of the rules. (consideration: CR H8099-8104)
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DEBATE - The House proceeded with forty minutes of debate on H.R. 3898.
At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.
Considered as unfinished business. (consideration: CR H8129-8130)
Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 415 - 2 (Roll no. 581).(text: CR H8099-8100)
Roll Call #581 (House)On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 415 - 2 (Roll no. 581). (text: CR H8099-8100)
Roll Call #581 (House)Motion to reconsider laid on the table Agreed to without objection.
The title of the measure was amended. Agreed to without objection.
Received in the Senate and Read twice and referred to the Committee on Foreign Relations.