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The Democratic People's Republic of Korea (European Union Financial Sanctions) Regulations 2017

Changes over time for: PART 3

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Version Superseded: 12/10/2017

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PART 3 U.K.Restrictions on Financial Services and Markets

Credit and financial institutions: accounts and correspondent banking relationshipsU.K.

10.—(1) A credit or financial institution falling within the scope of [F1Article 1] of the Council Regulation must not—

(a)open a new bank account with,

(b)establish a new correspondent banking relationship with,

(c)establish a new joint venture with, or

(d)take an ownership interest in,

a person falling within paragraph (2), if the credit or financial institution knows or has reasonable cause to suspect that the account, relationship or venture is with, or the ownership interest is in, a person falling within paragraph (2).

(2) The following persons fall within this paragraph—

(a)a credit or financial institution domiciled in the Democratic People's Republic of Korea;

(b)a branch or subsidiary, wherever located, of a credit or financial institution domiciled in the Democratic People's Republic of Korea F2...;

[F3(c)a credit or financial institution that is not domiciled in the Democratic People’s Republic of Korea but is controlled by a person, entity or body domiciled in the Democratic People’s Republic of Korea.]

(3) A credit or financial institution falling within the scope of [F4Article 1] of the Council Regulation must not—

(a)open a new representative office in the Democratic People's Republic of Korea, or

(b)establish a new branch or subsidiary in the Democratic People's Republic of Korea.

(4) Paragraph 1(b) to (d) are subject to regulation 23.

Textual Amendments

Credit and financial institutions: representative offices etcU.K.

11.  A person (“P”) must not—

(a)authorise the opening of a representative office or the establishment of a branch or subsidiary in the European Union of a person falling within regulation 10(2);

(b)conclude an agreement for, or on behalf of, a person falling within regulation 10(2) which relates to the opening of a representative office or the establishment of a branch or subsidiary in the European Union, if P knows or has reasonable cause to suspect that the agreement is for, or on behalf of, such a person; or

(c)authorise the taking up and pursuing of business by a representative office, branch or subsidiary of a person falling within regulation 10(2), if the representative office, branch or subsidiary was not operational before 19th February 2013.

Acquisition or extension of ownership interestU.K.

12.  A person falling within regulation 10(2) must not acquire or extend a participation, or acquire any other ownership interest, in a credit or financial institution falling within the scope of [F5Article 1] of the Council Regulation.

Textual Amendments

Sale or purchase of bondsU.K.

13.—(1) A person (“P”) must not sell or purchase public or public-guaranteed bonds issued after 19th February 2013, directly or indirectly, to or from a person, entity or body falling within paragraph (4) if P knows or has reasonable cause to suspect that the sale or purchase would be to or from such a person, entity or body.

(2) A person (“P”) must not provide brokering services with respect to public or public-guaranteed bonds issued after 19th February 2013 to a person, entity or body falling within paragraph (4) if P knows or has reasonable cause to suspect that the services would be provided to such a person, entity or body.

(3) A person (“P”) must not assist a person, entity or body falling within paragraph (4) to issue public or public-guaranteed bonds, by providing—

(a)brokering services,

(b)advertising, or

(c)any other service with respect to such bonds,

if P knows or has reasonable cause to suspect that P would be assisting such a person, entity or body.

(4) The following persons, entities and bodies fall within this paragraph—

(a)the Democratic People's Republic of Korea and its Government, public bodies, corporations and agencies;

(b)the Central Bank of the Democratic People's Republic of Korea;

(c)any person falling within regulation 10(2);

(d)a person, entity or body acting on behalf of or at the direction of a legal person, entity or body falling within sub-paragraphs (a) or (b);

(e)a legal person, entity or body owned or controlled by a person, entity or body falling within sub-paragraphs (a) to (c).

DPRK credit and financial institutions: branches, subsidiaries, and representative officesU.K.

14.  A person must not operate or facilitate the operation of—

(a)a branch;

(b)a subsidiary; or

(c)a representative office,

of a person falling within regulation 10(2).

Severance of existing financial relationshipsU.K.

15.—(1) A credit or financial institution falling within the scope of [F6Article 1] of the Council Regulation must have, by 31st May 2016—

(a)closed any bank account with;

(b)terminated any correspondent banking relationship with;

(c)terminated any joint venture with;

(d)relinquished any ownership interest in,

a person falling within regulation 10(2).

(2) A credit or financial institution falling within the scope of [F6Article 1] of the Council Regulation must have, by 31st May 2016—

(a)closed any branch in the Democratic People's Republic of Korea; and

(b)closed any subsidiary, or representative office in the Democratic People's Republic of Korea.

(3) Paragraphs (1)(a) and (2)(b) are subject to regulation 23.

Textual Amendments

Business directly or indirectly with designated personsU.K.

16.  A person must not participate, directly or indirectly, in any business arrangements, including joint ventures, with—

(a)any person, entity or body listed in [F7Annex XIII] of the Council Regulation; or

(b)any other person, entity or body acting on behalf or at the direction of such a person, entity or body.

Textual Amendments

Financial support for tradeU.K.

17.—(1) A person may not provide any financial support for trade with the Democratic People's Republic of Korea.

(2) In paragraph (1), financial support for trade includes, but is not limited to—

(a)finance;

(b)financial assistance;

(c)export credits;

(d)guarantees; and

(e)insurance.

(3) Paragraph (1) is subject to regulation 23.

Investment and commercial activitiesU.K.

18.—(1) A person must not accept or approve investment in a commercial activity where such investment is made by a person, entity or body listed in paragraph (6).

(2) A person must not grant financing or financial assistance to any F8... person, entity or body listed in paragraph (6)(d) to (f).

(3) A person must not establish a joint venture [F9or a co-operative entity] with a F10... person, entity or body listed in paragraph (6) F11....

(4) A person must not acquire or extend any ownership interest in a F12... person, entity or body listed in paragraph (6) F13....

(5) A person must not provide investment services directly [F14or indirectly] related to any activity that is prohibited by paragraphs (2) to (4).

(6) The persons, entities and bodies listed in this paragraph are—

(a)a person, entity or body of the Government of the Democratic People's Republic of Korea;

(b)the Worker's Party of Korea;

(c)a national of the Democratic People's Republic of Korea;

(d)a legal person, entity or body incorporated or constituted under the law of the Democratic People's Republic of Korea;

(e)a person, entity or body acting on behalf of or at the direction of a person, entity or body falling within sub-paragraphs (a) to (d); or

(f)a F15... person, entity or body owned or controlled by a person, entity or body falling within sub-paragraphs (a) to (d).

F16(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Transfers of fundsU.K.

19.—(1) Subject to paragraph (3) [F17or paragraph (5)] a person (“P”) must not make a transfer of funds to, or receive a transfer of funds from, the Democratic People's Republic of Korea.

(2) Subject to paragraph (3) [F18or paragraph (5)] a credit or financial institution falling within the scope of [F19Article 1] of the Council Regulation must not enter into, or continue to participate in, any transaction with—

(a)credit or financial institutions domiciled in the Democratic People's Republic of Korea;

(b)branches or subsidiaries, wherever located, of credit or financial institutions domiciled in the Democratic People's Republic of KoreaF20...;

[F21(c)credit or financial institutions that are not domiciled in the Democratic People’s Republic of Korea but are controlled by persons, entities or bodies domiciled in the Democratic People’s Republic of Korea.]

(3) A transfer of funds may be made—

(a)where the value of the transfer is [euro]15,000 or less, if the transfer relates to a transaction mentioned in paragraph (4); or

(b)where the value of the transfer is over [euro]15,000, if—

(i)the transfer relates to a transaction mentioned in paragraph (4); and

(ii)P or the institution has obtained F22... authorisation from the Treasury.

(4) The transactions are—

(a)transactions regarding foodstuffs, healthcare or medical equipment;

(b)transactions for agricultural or humanitarian purposes;

(c)transactions regarding personal remittances;

(d)transactions that have been licensed under regulation 23;

(e)transactions that are permitted under an exemption contained in the Council Regulation;

(f)transactions regarding a trade contract that is not prohibited by the Council Regulation;

[F23(g)transactions regarding the official purposes of a diplomatic or consular mission or an international organisation enjoying immunities in accordance with international law;]

F24(h). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F25(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(j)transactions required exclusively for the implementation of projects funded by the European Union or its Member States for development purposes directly addressing the needs of the civilian population of the Democratic People's Republic of Korea or the promotion of denuclearisation;

F26(k). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F27(l). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F28(5) The prohibitions in paragraphs (1) and (2) do not apply to a transfer of funds or transaction which is necessary for the official purposes of a diplomatic or consular mission of a Member State in the Democratic People’s Republic of Korea or an international organisation enjoying immunities in the Democratic People’s Republic of Korea in accordance with international law.]

(6) In this regulation—

(a)a reference to an amount in euros includes a reference to the equivalent amount in another currency; F29...

(b)a reference to a transfer of funds of a particular amount includes a transfer executed in several operations which appear to be linked, as well as a transfer executed in a single operation [F30; and]

[F31(c)a reference to a transfer of funds includes the clearing of funds.]

Textual Amendments

AuthorisationsU.K.

20.—(1) An authorisation granted by the Treasury under regulation 19(3) may be—

(a)general or granted to a category of persons or to a particular person;

(b)subject to conditions;

(c)of indefinite duration or subject to an expiry date.

(2) The Treasury may vary or revoke an authorisation at any time.

(3) On the grant, variation or revocation of an authorisation, the Treasury must—

(a)in the case of an authorisation granted to a particular person, give written notice of the grant, variation or revocation to that person,

(b)in the case of a general authorisation or an authorisation granted to a category of persons, take such steps as the Treasury consider appropriate to publicise the grant, variation or revocation of the authorisation.

(4) A person commits an offence who, for the purpose of obtaining an authorisation, knowingly or recklessly—

(a)provides information that is false in a material respect, or

(b)provides or produces a document that is not what it purports to be.

(5) A person who purports to act under an authorisation granted by the Treasury but who fails to comply with any conditions included in the authorisation commits an offence.

Bank accounts for diplomats and diplomatic missions of the Democratic People's Republic of KoreaU.K.

21.—(1) A credit or financial institution falling within the scope of [F32Article 1] of the Council Regulation must not open a new bank account for—

(a)a diplomatic mission or consular post of the Democratic People's Republic of Korea, or

(b)a national of the Democratic People's Republic of Korea who is a member of such a diplomatic mission or consular post.

(2) A credit or financial institution falling within the scope of [F32Article 1] of the Council Regulation must close any bank account by 11th April 2017 which is held or controlled by—

(a)a diplomatic mission or consular post of the Democratic People's Republic of Korea, or

(b)a national of the Democratic People's Republic of Korea who is a member of such a diplomatic mission or consular post.

(3) Paragraphs (1) and (2) are subject to regulation 23.

Textual Amendments

Real propertyU.K.

22.—(1) A person must not—

(a)lease, or otherwise make available, real property, directly or indirectly, to persons, entities or bodies of the Government of the Democratic People's Republic of Korea;

(b)lease real property, directly or indirectly, from persons, entities or bodies of the Government of the Democratic People's Republic of Korea;

(c)engage in any activity linked to the use of real property that persons, entities or bodies of the Government of the Democratic People's Republic of Korea own, lease or are otherwise entitled to use.

(2) The prohibition in paragraph (1)(a) does not apply where the real property is used for diplomatic or consular activities.

(3) The prohibition in paragraph 1(c) does not apply to the provision of goods and services which—

(a)are essential for the functioning of diplomatic missions or consular posts; and

(b)cannot be used to generate income or profit directly or indirectly for the Government of the Democratic People's Republic of Korea.

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