The Democratic People's Republic of Korea (European Union Financial Sanctions) Regulations 2013

Explanatory Note

(This note is not part of the Regulations)

These Regulations make provision relating to the enforcement of Council Regulation (EC) No. No. 329/2007 dated 27 March 2007 (OJ L 88, 29.3.2007, p.1) concerning restrictive measures against the Democratic People's Republic of Korea (“DPRK”) (“the Council Regulation”).

The measures include the freezing of funds and economic resources of designated persons and ensuring that funds and economic resources are not made available to them or for their benefit. They also include broader financial sanctions measures.

The Council Regulation has been amended recently by Council Regulation (EU) No. 296/2013 of 26 March 2013 (OJ L 90, 28.3.2013, p.4) and Council Regulation (EU) No. xxx/2013 of xx June 2013 (OJ L xx, xx.6.2013, p.x). The amendments include changes to the asset-freezing provisions and the imposition of additional financial sanctions measures relating to the actions of credit and financial institutions and the sale or purchase of bonds.

Regulation 2 defines designated persons as any person named in Annex IV, V or Va to the Council Regulation (as amended from time to time). Annex IV includes those persons listed by the United Nations Security Council, Annex V includes those persons listed by the Council of the European Union and Annex Va includes those persons working on behalf of or at the direction of a person listed in Annex IV or V or those persons assisting in the evasion of sanctions or violating the provisions of the Council Regulation.

Regulations 3 to 7 provide prohibitions against dealing with the funds or economic resources of a designated person, or making funds or economic resources available, directly or indirectly, to or for the benefit of a designated person.

Regulation 8 provides an exception to the prohibitions in regulations 4 and 5 where a frozen account is credited for a permitted reason.

Regulation 9 provides a licensing procedure to enable funds and economic resources to be exempted from the prohibitions.

Regulation 10 prohibits a credit or financial institution establishing or maintaining certain relationships with certain DPRK banks, or opening a representative office or establishing a branch in the DPRK.

Regulation 11 prohibits the making of an agreement for or on behalf of certain DPRK banks to establish a representative office, branch or subsidiary in the European Union.

Regulation 12 prohibits certain DPRK banks acquiring or extending an ownership interest in a credit or financial institution.

Regulation 13 prohibits the sale or purchase of bonds to or from, the provision of brokering services in respect of bonds to, and the provision of any assistance to issue bonds to certain persons, entities or bodies linked to the DPRK.

Regulation 14 makes it an offence to breach any of the prohibitions in regulations 3 to 7 and 10 to 13, or to seek to circumvent those provisions. Regulations 15 to 18 contain provision about penalties, proceedings and who, in relation to bodies corporate and other bodies, may be prosecuted for an offence under the Regulations.

Regulation 22 revokes the Democratic People's Republic of Korea (Asset-Freezing) Regulations 2011 which currently makes provision for penalties for contravention of the asset freezing measures contained in the Council Regulation. Regulation 23 provides that licences which were granted under those revoked Regulations continue to have effect for the purposes of these Regulations.

The Schedule makes provision for information gathering and information disclosure.

A list of designated persons is available on the Internet at: www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets.

An impact assessment has not been produced for this instrument as no impact on the costs of business or the voluntary sector is foreseen. Further information is available from Financial Sanctions, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ and on the Treasury's website (www.gov.uk/government/organisations/hm-treasury).