North Korea Sanctions and Enforcement Actions Advisory: Risks for Businesses with Supply Chain Links to North Korea

Bureau of Economic and Business Affairs
July 23, 2018

   

The U.S. Department of State, with the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Homeland Security’s (DHS) Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE), is issuing this advisory to highlight sanctions evasions tactics used by North Korea that could expose businesses – including manufacturers, buyers, and service providers – to sanctions compliance risks under U.S. and/or United Nations sanctions authorities. This advisory also assists businesses in complying with the requirements under Title III, the Korean Interdiction and Modernization of Sanctions Act of the Countering America’s Adversaries Through Sanctions Act (CAATSA). Businesses should be aware of deceptive practices employed by North Korea in order to implement effective due diligence policies, procedures, and internal controls to ensure compliance with applicable legal requirements across their entire supply chains.

Multiple U.S. and UN sanctions impose restrictions on trade with North Korea and the use of North Korean labor.[1] The two primary risks are: (1) inadvertent sourcing of goods, services, or technology from North Korea; and (2) the presence of North Korean citizens or nationals in companies’ supply chains, whose labor generates revenue for the North Korean government. This advisory also provides due diligence references for businesses.

North Korea’s system of forced labor operates both domestically and internationally. In North Korea, most laborers work between 12 and 16 hours per day (and sometimes up to 20 hours per day) with only one or two rest days per month in jobs they are assigned to by the North Korean government. Outside of North Korea, there are two primary groups of North Korean laborers earning income: (1) North Korean overseas laborers whose primary work is organized, managed, and overseen by, and produces revenue for, the North Korean government; and (2) North Koreans who have fled North Korea, including refugees and asylum seekers who live and work outside of North Korea and are earning income to sustain themselves in a personal capacity.

The U.S. government is focusing its disruption efforts on North Korean citizens or nationals whose labor generates revenue for the North Korean government. In most cases, employers pay salaries directly to the North Korean government, which takes between 70 percent and 90 percent of the total earnings. The North Korean government reportedly earns hundreds of millions of U.S. dollars per year from exporting labor. These remittances support the North Korean government’s weapons of mass destruction (WMD) and ballistic missile programs. Use of North Korean citizens or nationals as laborers in supply chains could trigger U.S. sanctions, and the issuance of work authorizations for these North Korean nationals is prohibited under UN Security Council resolution 2397 (2017).

The U.S. government is not seeking to disrupt the efforts of North Korean refugees and asylum seekers, who are living and working outside of North Korea, to earn an income to sustain themselves in a personal capacity. Individuals originally from North Korea, who obtain South Korean citizenship or any other citizenship, are no longer considered North Korean citizens or nationals, for purposes of CAATSA § 321 (b).

I. Heightened Risk for and Potential Indicators of Goods, Services, and Technology with a North Korean Nexus

  • Sub-Contracting/Consignment Firms: Third-country suppliers shift manufacturing or sub-contracting work to a North Korean factory without informing the customer or other relevant parties. For example, a Chinese factory sub-contracts with a North Korean firm to provide embroidery detailing on an order of garments.
  • Mislabeled Good/Services/Technology: North Korean exporters disguise the origin of goods produced in North Korea by affixing country-of-origin labels that identify a third country. For example, North Korean seafood is smuggled into third countries where it is processed, packaged, and sold without being identified as originating from North Korea. There are also cases in which garments manufactured in North Korea are affixed with “Made in China” labels.
  • Joint Ventures: North Korean firms have established hundreds of joint ventures with partners from China and other countries in various industries, such as apparel, construction, small electronics, hospitality, minerals, precious metals, seafood, and textiles. See Annex 2 for a list of known North Korean joint ventures.
  • Raw Materials or Goods Provided with Artificially Low Prices: North Korean exporters sell goods and raw materials well below market prices to intermediaries and other traders, which provides a commercial incentive for the purchase of North Korean goods. This practice has been documented in the export of minerals. For example, a close review of trade data on North Korea’s export of anthracite coal to China from 2014-2017 reveals a consistent sub-market price for this export.
  • Information Technology (IT) Services: North Korea sells a range of IT services and products abroad, including website and app development, security software, and biometric identification software that have military and law enforcement applications. North Korean firms disguise their footprint through a variety of tactics including the use of front companies, aliases, and third country nationals who act as facilitators. For example, there are cases where North Korean companies exploit the anonymity provided by freelancing websites to sell their IT services to unwitting buyers.

II. Heightened Risk for and Potential Indicators of North Korean Overseas Labor

A. Heightened Risk for North Korean Overseas Labor Producing Revenue for the Government of North Korea

Industries

The North Korean government exports large numbers of laborers to fulfill a single contract in various industries, including but not limited to apparel, construction, footwear manufacturing, hospitality, IT services, logging, medical, pharmaceuticals, restaurant, seafood processing, textiles, and shipbuilding.

Location

In 2017-18, North Korean laborers working on behalf of the North Korean government were present in the listed countries and jurisdictions below.[2] China and Russia continue to host more North Korean laborers than all other countries and jurisdictions combined.

  • Algeria
  • Angola
  • Bangladesh
  • Belarus
  • Cambodia
  • China
  • Democratic Republic of the Congo
  • Equatorial Guinea
  • Ethiopia
  • Ghana
  • Guinea
  • Indonesia
  • Kyrgyzstan
  • Kuwait
  • Laos
  • Libya
  • Mali
  • Malaysia
  • Mongolia
  • Mozambique
  • Namibia
  • Nepal
  • Nigeria
  • Oman
  • Peru
  • Poland
  • Qatar
  • Republic of Congo
  • Russia
  • Rwanda
  • Senegal
  • Singapore
  • Tanzania
  • Taiwan
  • Thailand
  • Uganda
  • United Arab Emirates
  • Uruguay
  • Vietnam
  • Zambia
  • Zimbabwe

B. Potential Indicators of North Korean Overseas Labor[3]

  • Wages: Indicators include the employer withholding wages, making unreasonable pay deductions, paying wages late, and making in-kind payments. In some instances, laborers earning revenue for the government are paid wages in cash and pay a lump sum to the North Korean government upon their return home.
  • Contracts: Laborers producing revenue for the government typically are hired under two-to-five year contracts that require a large upfront payment to the North Korean government (anecdotally, up to 30 percent of the total contract amount).
  • Housing: Laborers often reside in unsafe and unsanitary conditions provided by the employer and sometimes face excessive costs for those accommodations. Laborers providing revenue for the government typically reside in collective housing and are isolated from laborers of other nationalities.
  • Control over Laborers: Laborers often have no access to or control over bank accounts. Employers retain passports and/or confiscate or destroy laborers’ personal documents (e.g. visas). Laborers producing revenue for the North Korean government will generally have official documentation, including government-issued passports (as opposed to refugees and asylum seekers who will likely not have any such documentation). As with many victims of forced labor, these documents – as well as visas and work permits – may be retained by employers or recruiters. Laborers providing revenue for the government also get little to no time off and are required to attend mandatory self-criticism sessions.
  • Lack of Transparency: Contract details are often hidden, and financial transactions are handled in such a way that it is difficult to determine the ultimate beneficiary. North Korea also often limits third parties from conducting worksite inspections. Laborers producing revenue for the North Korean government typically cannot be interviewed without a “minder” present.

III. Due Diligence Best Practices

Businesses should closely examine their entire supply chain(s) for North Korean laborers and goods, services, or technology, and adopt appropriate due diligence best practices. This especially applies to those businesses with operations in high-risk countries, or who operate in high-risk industries. While due diligence practices will vary based on the size and nature of the business, well-documented due diligence policies and practices may be considered mitigating factors when the U.S. government determines the appropriate enforcement response. For specific recommendations of due diligence practices and potential mitigating factors, please see DHS Q&A, specifically question eight, and OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R Part 501, Appendix A.

IV. Penalties for Violations of Sanctions and Enforcement Actions

Individuals and entities should be aware of the potential consequences for engaging in or facilitating prohibited or sanctionable conduct.

OFAC investigates apparent violations of its regulations and maintains enforcement authority as outlined in its Economic Sanctions Enforcement Guidelines, 31 C.F.R Part 501, Appendix A. Persons who violate U.S. sanctions with respect to North Korea can be subject to civil monetary penalties equal to the greater of twice the value of the underlying transaction or $295,141 per violation, referred for criminal prosecution, or both.[4] For additional information regarding OFAC’s enforcement authorities, Economic Sanctions Enforcement Guidelines, and recent civil penalties and enforcement actions, visit the OFAC Resource Center.

CBP and ICE enforce the prohibition against importing goods made with forced labor through civil and criminal enforcement actions, respectively. Where CBP finds evidence of prohibited North Korean labor, CBP will deny entry of the goods, which could lead to the issuance of civil penalties, and the seizure and forfeiture of the associated goods, as appropriate. ICE’s Homeland Security Investigations works with CBP on these types of enforcement actions and may initiate criminal investigations relating to the importation of these proscribed goods that target individuals and/or corporations for their roles in the importation of proscribed goods into the United States in violation of the law. These laws include, but are not limited to, 18 U.S.C. 1761, 18 U.S.C. 545, and 18 U.S.C. 1589, and conviction under these laws could result in incarceration, fines, and forfeiture of any/all goods imported and proceeds of these crimes.

V. Activities that Could Result in Designation by OFAC

OFAC has authority to impose sanctions on any person determined to, among other things:

  • operate in the construction, energy, financial services, fishing, information technology, manufacturing, medical, mining, textiles, or transportation industries in North Korea;
  • have engaged in at least one significant importation from or exportation to North Korea of any goods, services, or technology;
  • have engaged in, facilitated, or been responsible for an abuse or violation of human rights by the government of North Korea or the Workers’ Party of Korea or any person acting for or on behalf of either such entity;
  • have engaged in, facilitated, or been responsible for the exportation of laborers from North Korea, including exportation to generate revenue for the government of North Korea or the Workers’ Party of Korea; or
  • have sold, supplied, transferred, or purchased, directly or indirectly, to or from North Korea or any person acting for or on behalf of the government of North Korea or the Workers’ Party of Korea, metal, graphite, coal, or software, where any revenue or goods received may benefit the government of North Korea or the Workers’ Party of Korea.

Additionally, if the Secretary of the Treasury, in consultation with the Secretary of State, determines that a foreign financial institution has knowingly conducted or facilitated significant trade with North Korea, or knowingly conducted or facilitated a significant transaction on behalf of a person designated under a North Korea-related Executive order, or under Executive Order 13382 for North Korea-related activity, that institution may, among other potential restrictions, lose the ability to maintain a correspondent account in the United States.

VI. North Korea Sanctions Resources

For additional information on OFAC sanctions, please see the North Korean Sanctions Regulations, 31 C.F.R. Part 510. For questions or concerns related to OFAC sanctions regulations and requirements, including disclosing a potential violation of U.S. sanctions regulations, please contact OFAC’s Compliance Hotline at 1-800-540-6322 or OFAC_Feedback@treasury.gov. To submit a request to OFAC for a specific license, see https://licensing.ofac.treas.gov/Apply/Introduction.aspx.

The DHS Q&A publication focuses on CAATSA Title III Section 321(b), which affects the entry of merchandise produced by North Korean nationals or citizens. CAATSA reiterates the need for comprehensive due diligence by and on behalf of U.S. companies involved in importing goods. Careful consideration of, and reasonable care with respect to, the different risks presented in your supply chain should always be taken into account when importing into the United States.

Importers have an obligation to exercise reasonable care and take all necessary and appropriate steps to ensure that goods entering the United States comply with all laws and regulations. To assist importers in understanding these obligations, CBP recently updated and published an Informed Compliance Publication, What Every Member of the Trade Community Should Know: Reasonable Care. CBP has also published seven fact sheets on various topics related to forced labor, including Forced Labor – Importer Due Diligence. These are also posted on CBP.gov.

The Responsible Sourcing Tool, funded by the State Department, is an online platform with resources to help federal contractors, acquisitions officers, and businesses identify, prevent, and address human trafficking risks in their global supply chains. The site contains information on industries and commodities at risk for trafficking or trafficking-related activities, as well as 10 risk management tools and a set of tools specific to the seafood industry.

 

Annex 1

Overview of North Korea Sanctions Prohibitions Related to Supply Chains

Both the United States and the United Nations (UN) maintain robust sanctions regimes against North Korea. A high-level overview of these prohibitions follows, but all individuals and entities reviewing this advisory are encouraged to ensure they understand fully all sanctions obligations, in all jurisdictions in which they operate, that pertain to their activities. Please note that this section is current as of the date of this advisory – the most-up-to-date information can be found at the websites listed in the footnotes below.

The United States prohibits, among other things[5]:

  • All transactions or dealings involving the North Korean government or the Workers’ Party of Korea;
  • The exportation or re-exportation, direct or indirect, from the United States, or by a United States person, wherever located, of any goods, services, or technology to North Korea;
  • The importation into the United States, direct or indirect, of any goods, services, or technology from North Korea;
  • Vessels and aircrafts that have visited North Korea within the last six months, or engaged in a ship-to-ship transfer with such a vessel, from visiting the United States;
  • New investment in North Korea by a United States person, wherever located;
  • Any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by the foreign person would be prohibited if performed by a United States person or within the United States, and;
  • The importation into the United States of any goods, wares, articles, and merchandise mined, produced, and manufactured wholly or in part by North Korean citizens or nationals.

The United Nations prohibits the importations from North Korea of the following[6]:

  • Coal
  • Textiles
  • Seafood, including fishing rights
  • Iron and iron ore
  • Lead and lead ore
  • Copper
  • Nickel
  • Zinc
  • Gold
  • Silver
  • Titanium ore
  • Rare earth metals
  • Vanadium ore
  • Statues and monuments
  • Conventional arms
  • Food and agricultural products
  • Machinery
  • Electrical equipment
  • Earth and stone, including magnesium and magnesite
  • Wood
  • Vessels

Joint Ventures: UN Security Council resolution 2375 requires Member States to prohibit all joint ventures with North Korean entities and individuals, whether new or already existing, subject to very narrow exceptions.

Labor: UN Security Council resolution 2397 requires all Member States to repatriate all North Koreans earning income no later than 24 months from December 22, 2017, subject to very narrow exceptions.

 

Annex 2

Joint Ventures in North Korea

NOTE: This annex lists joint ventures that have operated or are currently operating in North Korea established prior to 2016 and is not a comprehensive list of North Korean joint ventures that exist at this time. This annex is not a “sanctions list.” While some entities on this list may be entities whose property and interests in property are blocked, the inclusion of these entities in this advisory does not constitute as a determination by OFAC that any of these entities meet the designation criteria under any sanctions program. Persons subject to sanctions can be found on OFAC’s List of Specially Designated Nationals and Blocked Person and other sanctions lists, which can be searched here.

Sector

Joint Venture Name

Agriculture and Livestock

1

Naso'n City Kilso'ng Agricultural Development Liability Limited Company

2

Naso'n T'aehwa Company

3

U'np'ung Joint Venture Company

Animation

1

Pyongyang Tongmyo'ng Publishing Joint Venture

Aquaculture

1

Changch'o'ng Ku'mhwa Aquaculture Co., Ltd.

2

Chungjo Segi Industrial Development Cooperative Company

3

Hu'iwo'n Joint Venture Company

4

Korea Chasu'ng Aquaculture Cooperative Company

5

Korea Naso'n Kyeso'ng Processing Trade Company

6

Koryo' Ch'angp'yo'ng Joint Venture Company

7

Koryo' Songyo'ng Joint Venture Company

8

Najin Paekyang Trading Company

9

Najin-U'nhang Company

10

Pyongyang Su'ngbok Joint Venture Company

11

So'ngo'p Aquaculure Cooperative Company

12

Such'aebong Export Aquatic Product Cooperative

13

Su'ngni So'ngnyong Cooperative Company

14

Taeho Cooperative Company

15

Yunyang Aquaculture Cooperative Company

16

Yunyang Fish Meal Processing Co., Ltd.

Building Materials

1

Ch'o'ngsong Cooperative Company

2

Korea International So'nch'un Company (Also, Representative Office of Hunchun City Chamber of Commerce)

3

Korea Potonggang Building Material Joint Venture Company

4

Korea T’aehwa Joint Venture Company

5

Korea Tongbaek Builiding Material Factory

6

Korea Wo'njo Building Material Joint Venture Company

7

Korea Yo'nggwang Furniture Joint Venture Company

8

Ku'myang Joint Venture Company

9

Milyo'ng Joint Venture Company

10

Naso'n Sambong Building Material Company

11

No. 8 Trading Company of Korea General Pine Mushroom Trading Corporation

12

Potongang Construction and Decoration Materials Joint Venture Company

13

Sinil-Manbang Joint Venture Company

Business Services

1

Beijing Changfeng Industry Company Representative Office in Pyongyang

2

China Minimetals Corporation Representative Office in North Korea

3

Chojung Investment Cooperation and Trading General Company

4

Jilin Province Changfeng Industry and Trading Co., Ltd. Office in North Korea

5

Jilin Province General Trading Representative Office in Pyongyang Municipality

6

Jilin Province Songhua River Trading Co., Ltd. Office in Pyongyang Municipality

7

Liaoning Foreign Trade Representative Office in North Korea

8

Pyongyang Office of Yanbian Tianchi Industrial and Trading Co., Ltd.

9

Representative Office in Pyongyang

10

SINOTRANS Representative Office in North Korea

Carpet

1

Korea Tibetan Sheep Wool Carpet Co., Ltd.

Chemical Products

1

Ch'o'nghu'm Cooperative Company

2

Ch'o'nsin Joint Venture Company

3

Korea Taeso'ng [Daesong] Corporation No. 5 Branch Company

4

Naso'n Myo'ngju Cosmetics Company

5

Naso'n Ryo'ngso'n Group Company

6

Tonghae Ku'mbima Joint Venture Company

Coal

1

P'yo'ngmae Joint Venture Company

Electrical Equipment

1

Haech'o'n Joint Venture Company

2

Korea Yo'nso'ngch'o'no'p New Energy Science and Technology Joint Venture Company

3

Koryo' Ch'angmyo'ng New Energy Science and Technology Company

4

Pyongyang Municipality Electric Appliance Joint Venture Company

5

Pyongyang Municipality So'ngsil Electronic Automation Joint Venture Company

6

Pyongyang Yaming Lighting Joint Venture Company

7

Tae'an-Hu'nt'ae Joint Venture Company

8

Taedonggang Magnetic Material Factory

Fertilizer

1

Pyongyang Municipality Ku'mhwi Joint Venture Company

2

Sangwo'n-Hwiku'm Joint Venture Company

Food and Beverage

1

Chojung Friendship Furfural Co., Ltd.

2

Choso'n Myohyang Honghwa Foodstuff Co., Ltd.

3

Hu'mgu'm Joint Venture Company

4

Korea Naso'n Hongwo'n Trading Company

5

Korea Naso'n Miyo'n Commerce Company

6

Korea So'ngan Joint Venture Company

7

Kukkwang Cooperative Company

8

Moranbong Juice J-V Corporation

9

Nakwo'n Natural Health Food Company

10

Naso'n Beidahuang Friendship Agricultural Company

11

Naso'n City Kilso'ng Tongya Company

12

So'ngsim Cooperative Company

13

Wo'nbong Cooperative Company

14

Yanbian Mihyang (Naso'n) Foodstuff Company

Footwear

1

Chinyo'n Shoemaking Industry Joint Venture Company

2

Naso'n Shoemaking Industry Joint Venture Company

Handicraft

1

Naso'n Hwanggu'm Delta Trading Company

2

North P'yo'ngan Province U'njo'ng Handicraft Co., Ltd.

Hotel and Hospitality

1

Korea Yo'nggu'm Joint Venture Company

2

Nangnang Hotel Joint Venture Company

3

Naso'n Irim Co., Ltd.

4

Naso'n Kangdo'k Industrial Company

5

Naso'n Kil'an Tourism Development Company, Naso'n City Travel (Tourism) Comprehensive Development Company

6

Naso'n Kwangwang [Tourism] Taeji Cooperative Company

7

Naso'n Namyang Company

8

Pyongyang Samu'i General Service Center

9

Taedonggang Hotel Co., Ltd.

Industrial and Commercial Machinery

1

Haech'o'n Joint Venture Company

2

Najin Taeyang Company

3

Pyongyang Welding Material Joint Venture Company

Infrastructure

 

1

Naso'n Economic and Trade Development Zone Investment Co., Ltd.

IT

1

Morning-Panda Computer Company Limited

Jewelry

1

Pyongyang Gemsy Sewing Machine Joint Venture Company

Logistics

1

Haehang [Harbor] Joint Venture Company

2

Korea Naso'n Ch'angnyo'k International Logistics Co., Ltd.

3

Pyongyang Export Supplies Transport Joint Venture Company

4

Pyongyang Wo'nso'ng Joint Venture Company

Metal Products

1

Ch'o'nmasan Joint Venture Company

2

Korea T’aehwa Joint Venture Company

3

Naso'n Hangha Company

4

Pyongyang Fire Fighting Apparatus Joint Venture Company

Mining/Minerals

1

Chakang Province Gold Mine

2

Changhong Joint Venture Company

3

Changsaeng Chossi Trading Co., Ltd.

4

Cheil Mining Industry Joint Venture Company

5

Chojung Changsaeng Pukpang Joint Venture Company

6

Chojung Joint Venture Suan Mining Industry Company

7

Ch'o'nghu'm Mining Industry Liability Limited Company

8

Ch'o'ngjin, North Hamgyo'ng Province Suso'ngch'o'n Cooperative Company

9

Ch'o'nwo'n Cooperative Company

10

Chunggo'n Cho'nsu'ng Mining Industry Co., Ltd.

11

Democratic People's Republic of Korea Taehu'ng Trading Company

12

DPRK Paekyang Trading Company

13

Hukang Joint Venture Company

14

Hyejung Mining Industry Joint Venture Company

15

Hyesan Ch'ogu'm Joint Venture Company

16

Kaeso'n So'gwang Mining Industry Joint Venture Company

17

Kilp'yo'ng Maanshan Joint Venture Company

18

Korea Cho'ngyang Joint Venture Company

19

Korea Hoeryo'ng Mining Cooperative Company

20

Korea Hongso'ng Kaewo'l Lead and Zinc Mining Cooperative Company

21

Korea Hoyung International Mining Industry Liability Limited Company

22

Korea Ku'mgil Joint Venture Company

23

Korea Ku'mnyo'ng Tumangang Mining and Trading Cooperative Company

24

Korea Ku'msan Mining Industry Joint Venture Company

25

Korea Ku'mt'ae Mining Industry Cooperative Company

26

Korea Mokranbong Mineral Cooperative Company

27

Korea Ore Washing Cooperative Company

28

Korea P'yo'ngsan Fluorite Cooperative Company

29

Korea Ryobong Nonferrous Metal Joint Venture Company

30

Korea South Hamgyo'ng Province Tanch'o'n City So'ku-Ri Su'ngni Tungsten Liability Limited Company

31

Korea Taebong International Mining Industry Co., Ltd.

32

Korea Taeok Mining Industry Joint Venture Company

33

Korea To'khyo'n Iron Mine Company

34

Korea Tongbang Cargo Transportation Joint Venture Company (Beijing)

35

Korea Tongbang Cargo Transportation Joint Venture Company (Liaoning Province)

36

Korea Unsan Gold Mining Joint Venture Company

37

Korea U'nhae Joint Venture Company

38

Korea Yo'nggu'm Joint Venture Company

39

Koryo' Samhwa Graphite Joint Venture Company (Heilongjiang Province)

40

Koryo' Samhwa Graphite Joint Venture Company (Liaoning Province)

41

Kukso'ng Joint Venture Company

42

Ku'mbong Joint Venture Company

43

Ku'mho Mining Joint Venture Company (Beijing)

44

Ku'mho Mining Joint Venture Company (Jilin Province)

45

Ku'mhwa Technology Cooperative Company

46

Nakwo'n Ku'mch'ang Cooperative Company

47

Naso'n Tongni Sand Stone Cooperative Company

48

O'ryong Graphite Cooperative Company

49

Oryong Joint Venture Company

50

Piryukang Ku'msan Cooperative Company

51

Pyongyang International Investment Joint Venture Company

52

Sillyo'n Mining Industry Co., Ltd.

53

Sinu'iju Branch Joint Venture Company of Kangso'ng Trading Company

54

So'yang Paekku'msan Joint Venture Company

55

Taegyo'ngch'o'n Mining Industry Joint Venture Company

56

Taehong Joint Venture Company

57

Taekwang Joint Venture Company

58

Taeyang Rimbo Joint Venture Company

59

Titanium Development Cooperative Company

60

Wiwo'n County Industrial Silicon Factory

61

Yangbong Joint Venture Company

Musical Instruments

1

Naso'n Wiryong Electronic Musical Instrument Manufacturing Company

Oil and Gas

1

Korea So'nbong Sinhu'ng Petrochemical Liability Limited Company

2

Naso'n Hu'ngnyung Company

3

Naso'n Pongjo'ng Company

4

So'nbong Fuel Oil Processing Joint Venture Company

Paper Products

1

Pyongyang Anju Packaging Material Factory

Plastics

1

Ch'o'ngjin Metal Cooperative Company

2

Hu'iwo'n Joint Venture Company

3

Korea Changch'o'ng Joint Venture Company

4

Korea Manch'o'n Cooperative Company

5

Nado Resin Joint Venture Company

6

Naso'n Hu'mwo'n Company

Printing and Publishing

1

Tongbaek Printing Joint Venture Co., Ltd. (Hong Kong)

2

Tongbaek Printing Joint Venture Co., Ltd. (Jiangsu Province)

Real Estate Development

1

Jilin Province Langtianjiaji Foreign Econmic Cooperation Co., Ltd. Office in Naso'n, North Korea

2

Naso'n Kil'an Tourism Development Company, Naso'n City Travel (Tourism) Comprehensive Development Company

3

Naso'n Namyang Company

4

Naso'n Sindae International Business Center Company

5

So'lso'ng Joint Venture Company

Repair Services

1

Koryo' Chungso'ng Logistics Company

2

Sambok Transportation Technology Cooperative Company

Retail Trade/Wholesale Trade

1

Ch'angp'yo'ng Trading Representative Office

2

Chawo'n Pukhwa Trading Company

3

China FAW Group Import & Export Co., Ltd. Office in North Korea

4

Department Store Cooperative Company (Henan Province)

5

Department Store Cooperative Company (Hong Kong)

6

Jinting Tongda International Trade (Beijing) Co., Ltd. In Pyongyang

7

Korea Naso'n Wibong Economic and Trading Company

8

Najin Market Cooperative Company

9

Naso'n Wangfute Trading Co., Ltd.

10

Pyongyang Municipality Ku'mhwi Joint Venture Company

11

So'lso'ng Joint Venture Company

Stone and Concrete Products

1

Naso'n Stone Material Joint Venture Company

2

Naso'n Yat'ae Building Material Co., Ltd.

3

Pyongyang Kangdong County Building Material Joint Venture Complany

4

Pyongyang Pukpang Building Material Joint Venture Company

5

Yanbian So'ngsin (Naso'n) Building Material Factory

Textiles and Apparel

1

Changch'o'ng Joint Venture Company

2

Ch'o'ngjin, North Hamgyo'ng Province Myo'nguk Trading Company

3

Choso'n Kyo'ngcho Joint Venture Company

4

Choso'n So'ngo'p Company

5

Choyang Textile Joint Venture Company

6

Haeyang Knitwear Processing Company

7

Hongbong Industrial Development Co., Ltd.

8

Hwau'i Logistics Quality Inspection Center

9

Inner Mongolia Dagenlai Industrial and Trading Co., Ltd. Pyongyang Municipality Branch

10

Korea Changch'o'ng Nonwoven Product Co., Ltd.

11

Korea Cho'ngyang Joint Venture Company

12

Korea Manbok Cooperative Company

13

Korea Najin Hyesu'ng Company

14

Ku'mbo Apparel Co., Ltd.

15

Nakcho'n Apparel Co., Ltd.

16

Naso'n Chohwang (North Korea) International Trading Company

17

Naso'n City P'unghwa Apparel Co., Ltd.

18

Naso'n Myo'nguk Trading Company

19

Naso'n Ryo'ngso'n Joint Venture Company

20

So'nwo'n Sock Processing Factory

Tires

1

Chungjo Ku'mso'ng Tire Rubber Co., Ltd.

Tobacco

1

Naso'n Sinhu'ng Tobacco Company

2

Pyongyang Baishan Tobacco Liability Limited Company

3

Taedonggang Tobacco Co., Ltd.

Transport Services

1

Korea Cho'ngyang Joint Venture Company

2

Korea P'yo'ngun Sangae Cooperative Company

Transportation Equipment

1

Chojung Hapryo'k Hyo'njin Special Purpose Vehicle Manufacturing Joint Venture Company

2

Choso'n P'yo'ngjin Bicycle Joint Venture Company

3

Haeso'ng Wheeled Machinery Cooperative Company

4

Korea Ku'mp'yo'ng Joint Venture Company

5

Korea T'ongda Transportation Cooperative Company

6

Ku'mgang Vehicle Joint Venture Company

7

P'yo'ngun Chungso'ng Joint Venture Company

8

Samdaeso'ng Joint Venture Company

9

Tianjin Digital Commerce Liability Limited Company Representative Office

10

To'kchung Vehicle Cooperative Company

Wood Products

1

Tumangang Timber Processing Factory

Various

1

Haech'o'n Joint Venture Company

2

Korea Hwich'ang Cooperative Company

3

Korea Naso'n Sinhu'ng Branch Business Company

4

Naso'n Su'ngjin Company

 

Annex 3

Sectoral Breakdown of North Korean Overseas Workers

Note: This annex reflects open source data on North Korean overseas workers in the below countries, jurisdictions, and industries. It is not a comprehensive list of all countries, jurisdictions, or industries. Businesses involved in these countries or jurisdictions’ sectors should scrutinize their supply chain to ensure compliance with U.S. laws. UN Security Council resolution 2397 requires UN Member States to repatriate all North Koreans earning income no later than 24 months from December 22, 2017. Therefore, countries and jurisdictions may have taken actions to expel North Korean workers since this data was reported.

Industries

High Risk Country or Jurisdiction

Agriculture

Poland

Russia

Construction

Algeria

Angola

Equatorial Guinea

Ethiopia

Kuwait

Mali

Malaysia

Mongolia

Namibia

Nepal

Oman

Poland

Qatar

Russia

Senegal

The United Arab Emirates

Zimbabwe

Defense & Munitions

Democratic Republic of the Congo

Namibia

Uganda

Energy

China

IT

Angola

Bangladesh

China

Laos

Nigeria

Uganda

Vietnam

Medical Clinics

Angola

Cambodia

China

Mongolia

Mozambique

Nepal

Nigeria

Republic of Congo

Tanzania

Uganda

Home Repair Services

Russia

Seafood

China

Mozambique

Taiwan

Uruguay

Textiles and Apparel

China

Timber

Russia

 


 

[1] Annex 1 provides a more detailed description of the North Korean sanctions prohibitions related to supply chains.

[2] The State Department regularly reports on countries and industries hosting North Korean laborers in our annual reports including the Country Reports on Human Rights Practices and Trafficking in Persons Report. In addition, a number of NGOs have conducted extensive research on this topic and have released public reports. These NGOs include the Database Center for North Korean Human Rights, the ASAN Institute, C4ADS, and the Committee for Human Rights in North Korea.

[3] Indicators in section B may apply to either North Korean laborers producing revenue for the North Korean government, or to North Korean refugees and asylum seekers, unless otherwise specified.

[4] Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Sec. 701 of Public Law 114-74, OFAC adjusted its civil monetary penalty amounts on August 1, 2016, February 10, 2017, and March 19, 2018, and will adjust those amounts annually.

[5] These prohibitions apply to transactions by a U.S. person or within the United States, including those that pass through the U.S. financial system. These prohibitions do not apply to exempt transactions. This document is explanatory only and does not have the force of law. This document does not supplement or modify the statutory authorities, Executive orders, or regulations. For additional details on OFAC prohibitions related to North Korea, see www.treasury.gov/ofac.

[6] All UN Member States have a legal obligation to implement the sanctions measures imposed by UN Security Council resolutions (UNSCRs). North Korea-related UNSCRs can be found on the 1718 Committee website at https://www.un.org/sc/suborg/en/sanctions/1718.