[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1591 Introduced in Senate (IS)]
<DOC>
115th CONGRESS
1st Session
S. 1591
To impose sanctions with respect to the Democratic People's Republic of
Korea, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 19, 2017
Mr. Van Hollen (for himself and Mr. Toomey) introduced the following
bill; which was read twice and referred to the Committee on Banking,
Housing, 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 Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Banking
Restrictions Involving North Korea (BRINK) Act of 2017''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
TITLE I--FINANCIAL REQUIREMENTS AND SANCTIONS RELATING TO TRANSACTIONS
INVOLVING NORTH KOREA
Sec. 101. Sanctions with respect to financial institutions providing
support to the Government of North Korea.
Sec. 102. Expansion of licensing requirements for transactions in North
Korean covered property.
Sec. 103. Authorization of imposition of sanctions with respect to the
provision of specialized financial
messaging services to North Korean
financial institutions and sanctioned
persons.
Sec. 104. Authorization of imposition of sanctions with respect to
governments that fail to comply with United
Nations Security Council sanctions against
North Korea.
Sec. 105. Grants to conduct research on financial networks and
financial methods of the Government of
North Korea.
Sec. 106. Report on use by the Government of North Korea of beneficial
ownership rules to access the international
financial system.
Sec. 107. Sense of Congress on identification and blocking of property
of North Korean officials.
Sec. 108. Sense of Congress regarding the Kaesong Industrial Complex.
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--GENERAL AUTHORITIES
Sec. 301. Rulemaking.
Sec. 302. Authority to consolidate reports.
Sec. 303. Rule of construction.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Since 2006, the United Nations Security Council has
approved 5 resolutions imposing sanctions against North Korea
under chapter VII of the United Nations Charter, which--
(A) prohibit the use, development, and
proliferation of weapons of mass destruction by the
Government of North Korea;
(B) prohibit the transfer of arms and related
materiel to or by the Government of North Korea;
(C) prohibit the transfer of luxury goods to North
Korea;
(D) restrict access by the Government of North
Korea to the financial system and require due diligence
on the part of financial institutions to prevent the
financing of proliferation involving the Government of
North Korea;
(E) restrict North Korean shipping, including the
reflagging of ships owned or controlled by the
Government of North Korea;
(F) limit the sale by the Government of North Korea
of precious metals, iron, coal, vanadium, and rare
earth minerals; and
(G) prohibit the transfer to North Korea of rocket,
aviation, or jet fuel.
(2) The Government of North Korea has threatened to carry
out nuclear attacks against the United States and South Korea
and has sent clandestine agents to kidnap or murder the
citizens of foreign countries and murder dissidents in exile.
(3) The Federal Bureau of Investigation has determined that
the Government of North Korea was responsible for cyberattacks
against the United States and South Korea.
(4) In February 2016, the Director of National Intelligence
reported that the Government of North Korea is ``committed to
developing a long-range, nuclear-armed missile that is capable
of posing a direct threat to the United States'' and some arms
control experts have estimated that the Government of North
Korea may acquire this capability by 2020.
(5) The Government of North Korea tested its 5th and
largest nuclear device on September 9, 2016.
(6) The Government of North Korea has increased the pace of
its missile testing, including the test of a submarine-launched
ballistic missile, potentially furthering the development of
capability to attack the United States with a nuclear weapon.
(7) Financial transactions and investments that provide
financial resources to the Government of North Korea, and that
fail to incorporate adequate safeguards against the misuse of
those financial resources, pose an undue risk of contributing
to--
(A) weapons of mass destruction programs of that
government; and
(B) prohibited imports or exports of arms and
related materiel, services, or technology by that
government.
(8) The strict enforcement of sanctions is essential to the
efforts by the international community to achieve the peaceful,
complete, verifiable, and irreversible dismantlement of weapons
of mass destruction programs of the Government of North Korea.
SEC. 3. DEFINITIONS.
In this Act:
(1) Applicable executive order; applicable united nations
security council resolution; government of north korea; north
korea.--The terms ``applicable Executive order'', ``applicable
United Nations Security Council resolution'', ``Government of
North Korea'', and ``North Korea'' have the meanings given
those terms in section 3 of the North Korea Sanctions and
Policy Enhancement Act of 2016 (22 U.S.C. 9202).
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Banking, Housing, and Urban
Affairs and the Committee on Foreign Relations of the
Senate; and
(B) the Committee on Financial Services and the
Committee on Foreign Affairs of the House of
Representatives.
(3) 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.
(4) North korean covered property.--
(A) In general.--The term ``North Korean covered
property'' includes any goods, services, or
technology--
(i) that are in North Korea;
(ii) that are made with significant amounts
of North Korean labor, materials, goods, or
technology;
(iii) in which the Government of North
Korea or a North Korean financial institution
has a significant interest or exercises
significant control; or
(iv) in which a designated person has a
significant interest or exercises significant
control.
(B) Designated person.--In this paragraph, the term
designated person means a person who is designated
under--
(i) an applicable Executive order;
(ii) an applicable United Nations Security
Council resolution; or
(iii) section 104 of the North Korea
Sanctions and Policy Enhancement Act of 2016
(22 U.S.C. 9204).
(5) North korean financial institution.--The term ``North
Korean financial institution'' includes--
(A) 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);
(B) 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;
(C) 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; and
(D) any financial institution that is a joint
venture between any person and the Government of North
Korea.
(6) Secretary.--Unless otherwise specified, the term
``Secretary'' means the Secretary of the Treasury.
(7) United states financial institution.--The term ``United
States financial institution'' means a financial institution
that--
(A) is a United States person, regardless of where
the person operates; or
(B) operates or does business in the United States,
including by conducting wire transfers through
correspondent banks in the United States.
(8) United states person.--The term ``United States
person'' means--
(A) a citizen or resident of the United States or a
national of the United States (as defined in section
101(a) of the Immigration and Nationality Act (8 U.S.C.
1101(a))); and
(B) an entity that is organized under the laws of
the United States or any jurisdiction within the United
States, including a foreign subsidiary of such an
entity.
TITLE I--FINANCIAL REQUIREMENTS AND SANCTIONS RELATING TO TRANSACTIONS
INVOLVING NORTH KOREA
SEC. 101. SANCTIONS WITH RESPECT TO FINANCIAL INSTITUTIONS PROVIDING
SUPPORT TO THE GOVERNMENT OF NORTH KOREA.
(a) Report on Noncompliant Financial Institutions.--
(1) In general.--Not later than 60 days after the date of
the enactment of this Act, and every 180 days thereafter, the
President shall submit to the appropriate congressional
committees and publish in the Federal Register a report that
contains a list of any financial institutions that the
President has identified as having engaged in, during the one-
year period preceding the submission of the report, the
following conduct:
(A) Dealing in North Korean covered property.
(B) Providing correspondent or interbank services
to one or more North Korean financial institutions.
(C) Failing to apply enhanced due diligence to
prevent North Korean financial institutions from
gaining access to correspondent or interbank services
in the United States or provided by United States
persons.
(D) Knowingly operating or participating with or on
behalf of an offshore United States dollar clearing
system that conducts transactions involving the
Government of North Korea or North Korean covered
property.
(E) Conducting or facilitating one or more
significant transactions in North Korean covered
property involving covered goods (as that term is
defined in section 1027.100 of title 31, Code of
Federal Regulations, or any successor regulation) or
the currency of a country other than the country in
which the person is operating at the time of the
transaction.
(2) Form of report.--Each report required under paragraph
(1) shall be submitted in unclassified form but may contain a
classified annex.
(b) Imposition of Sanctions.--
(1) In general.--If the President determines that a
financial institution identified under subsection (a) has
knowingly engaged in conduct described in that subsection, the
President shall apply the following sanctions with respect to
that financial institution:
(A) Prohibit the designation of the financial
institution, or the continuation of any prior
designation of the financial institution, as a primary
dealer in United States Government debt instruments.
(B) Prohibit the financial institution from serving
as agent of the United States Government or as a
repository for funds of the United States Government.
(C) One or more of the following:
(i) Prohibit the opening, and prohibit or
impose strict conditions on the maintaining, in
the United States of any correspondent account
or payable-through account by the financial
institution if the financial institution is a
foreign financial institution.
(ii) Prohibit any transactions in foreign
exchange that are subject to the jurisdiction
of the United States and in which the financial
institution has any interest.
(iii) In accordance with the International
Emergency Economic Powers Act (50 U.S.C. 1701
et seq.), block and prohibit all transactions
in all property and interests in property of
the financial institution if such property and
interests in property are in the United States,
come within the United States, or are or come
within the possession or control of a United
States person.
(2) Civil penalties.--If the President determines that a
financial institution identified under subsection (a) that is a
United States financial institution has knowingly engaged in
conduct described in that subsection--
(A) if the financial institution has taken
reasonable steps to prevent a recurrence of conduct
described in that subsection and is cooperating fully
with the efforts of the President to enforce the
provisions of this Act--
(i) unless the financial institution is
described in clause (ii), the President shall
impose a civil penalty not to exceed $100,000
for each reportable act described in
subparagraphs (A) through (E) of subsection
(a)(1) that is knowingly conducted; or
(ii) if the financial institution has not
previously been reported for similar conduct
under subsection (a), the President shall issue
a cautionary letter to that financial
institution; or
(B) if the financial institution is not a financial
institution described in subparagraph (A), the
President shall impose a civil penalty not to exceed
$250,000 for each reportable act described in
subparagraphs (A) through (E) of subsection (a)(1) that
is knowingly conducted.
(c) Suspension for Law Enforcement Purposes.--The President may
suspend the submission of the reports described in subsection (a) and
the application of sanctions and penalties described in subsection (b)
for a one-year period if--
(1) such reporting and application of sanctions and
penalties could compromise an ongoing law enforcement
investigation or prosecution; or
(2) a criminal prosecution is pending, or a criminal or
civil fine or penalty has been imposed or conditionally
deferred, for the conduct reported pursuant to subsection (a).
(d) Suspension and Termination of Sanctions and Penalties.--
(1) Suspension.--The President may suspend the application
of any sanctions or penalties under subsection (b) for a period
of not more than one year if the President certifies to the
appropriate congressional committees that the Government of
North Korea is taking steps toward--
(A) the verification of its compliance with
applicable United Nations Security Council Resolutions;
and
(B) fully accounting for and repatriating United
States citizens and permanent residents (including
deceased United States citizens and permanent
residents)--
(i) abducted or unlawfully held captive by
the Government of North Korea; or
(ii) detained in violation of the Agreement
Concerning a Military Armistice in Korea,
signed at Panmunjom July 27, 1953 (commonly
referred to as the ``Korean War Armistice
Agreement'').
(2) Renewal of suspension.--The President may renew a
suspension described in paragraph (1) for additional periods of
not more than 180 days if the President certifies to the
appropriate congressional committees that the Government of
North Korea continues to take steps as described in paragraph
(1).
(3) Termination of sanctions.--Subject to subsection (f),
the President may terminate the application of any sanctions or
penalties under subsection (b) if the President certifies that
the Government of North Korea has made significant progress
towards--
(A) completely, verifiably, and irreversibly
dismantling all of its nuclear, chemical, biological,
and radiological weapons programs, including all
programs for the development of systems designed in
whole or in part for the delivery of such weapons; and
(B) fully accounting for and repatriating United
States citizens and permanent residents (including
deceased United States citizens and permanent
residents)--
(i) abducted or unlawfully held captive by
the Government of North Korea; or
(ii) detained in violation of the Agreement
Concerning a Military Armistice in Korea,
signed at Panmunjom July 27, 1953 (commonly
referred to as the ``Korean War Armistice
Agreement'').
(e) Waiver.--Subject to subsection (f), the President may waive the
application of sanctions or penalties under subsection (b) with respect
to a financial institution if the President determines that the waiver
is in the national security interest of the United States.
(f) Congressional Review of Proposed Actions To Waive or Terminate
Sanctions.--
(1) Submission to congress of proposed action.--
(A) In general.--Notwithstanding any other
provision of law, before taking any action described in
subparagraph (B), the President shall submit to the
appropriate congressional committees and leadership a
report that describes the proposed action and the
reasons for that action.
(B) Actions described.--An action described in this
subparagraph is--
(i) an action to suspend, renew a
suspension, or terminate under subsection (d)
the application of sanctions or penalties under
subsection (b); or
(ii) with respect to sanctions or penalties
under subsection (b) imposed by the President
with respect to a person, an action to waive
under subsection (e) the application of those
sanctions or penalties with respect to that
person.
(C) Description of type of action.--Each report
submitted under subparagraph (A) with respect to an
action described in subparagraph (B) shall include a
description of whether the action--
(i) is not intended to significantly alter
United States foreign policy with regard to
North Korea; or
(ii) is intended to significantly alter
United States foreign policy with regard to
North Korea.
(D) Inclusion of additional matter.--
(i) In general.--Each report submitted
under subparagraph (A) that relates to an
action that is intended to significantly alter
United States foreign policy with regard to
North Korea shall include a description of--
(I) the significant alteration to
United States foreign policy with
regard to North Korea;
(II) the anticipated effect of the
action on the national security
interests of the United States; and
(III) the policy objectives for
which the sanctions affected by the
action were initially imposed.
(ii) Requests from banking and financial
services committees.--The Committee on Banking,
Housing, and Urban Affairs of the Senate or the
Committee on Financial Services of the House of
Representatives may request the submission to
the Committee of the matter described in
subclauses (II) and (III) of clause (i) with
respect to a report submitted under
subparagraph (A) that relates to an action that
is not intended to significantly alter United
States foreign policy with regard to North
Korea.
(2) Period for review by congress.--
(A) In general.--During the period of 30 calendar
days beginning on the date on which the President
submits a report under paragraph (1)(A)--
(i) in the case of a report that relates to
an action that is not intended to significantly
alter United States foreign policy with regard
to North Korea, the Committee on Banking,
Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the
House of Representatives should, as
appropriate, hold hearings and briefings and
otherwise obtain information in order to fully
review the report; and
(ii) in the case of a report that relates
to an action that is intended to significantly
alter United States foreign policy with regard
to North Korea, the Committee on Foreign
Relations of the Senate and the Committee on
Foreign Affairs of the House of Representatives
should, as appropriate, hold hearings and
briefings and otherwise obtain information in
order to fully review the report.
(B) Exception.--The period for congressional review
under subparagraph (A) of a report required to be
submitted under paragraph (1)(A) shall be 60 calendar
days if the report is submitted on or after July 10 and
on or before September 7 in any calendar year.
(C) Limitation on actions during initial
congressional review period.--Notwithstanding any other
provision of law, during the period for congressional
review provided for under subparagraph (A) of a report
submitted under paragraph (1)(A) proposing an action
described in paragraph (1)(B), including any additional
period for such review as applicable under the
exception provided in subparagraph (B), the President
may not take that action unless a joint resolution of
approval with respect to that action is enacted in
accordance with paragraph (3).
(D) Limitation on actions during presidential
consideration of a joint resolution of disapproval.--
Notwithstanding any other provision of law, if a joint
resolution of disapproval relating to a report
submitted under paragraph (1)(A) proposing an action
described in paragraph (1)(B) passes both Houses of
Congress in accordance with paragraph (3), the
President may not take that action for a period of 12
calendar days after the date of passage of the joint
resolution of disapproval.
(E) Limitation on actions during congressional
reconsideration of a joint resolution of disapproval.--
Notwithstanding any other provision of law, if a joint
resolution of disapproval relating to a report
submitted under paragraph (1)(A) proposing an action
described in paragraph (1)(B) passes both Houses of
Congress in accordance with paragraph (3), and the
President vetoes the joint resolution, the President
may not take that action for a period of 10 calendar
days after the date of the President's veto.
(F) Effect of enactment of a joint resolution of
disapproval.--Notwithstanding any other provision of
law, if a joint resolution of disapproval relating to a
report submitted under paragraph (1)(A) proposing an
action described in paragraph (1)(B) is enacted in
accordance with paragraph (3), the President may not
take that action.
(3) Joint resolutions of disapproval or approval.--
(A) Joint resolutions of disapproval or approval
defined.--In this paragraph:
(i) Joint resolution of approval.--The term
``joint resolution of approval'' means only a
joint resolution of either House of Congress--
(I) the title of which is as
follows: ``A joint resolution approving
the President's proposal to take an
action relating to the application of
certain sanctions with respect to North
Korea.''; and
(II) the sole matter after the
resolving clause of which is the
following: ``Congress approves of the
action relating to the application of
sanctions imposed with respect to North
Korea proposed by the President in the
report submitted to Congress under
section 101(f)(1)(A) of the Banking
Restrictions Involving North Korea
(BRINK) Act of 2017 on _______ relating
to ________.'', with the first blank
space being filled with the appropriate
date and the second blank space being
filled with a short description of the
proposed action.
(ii) Joint resolution of disapproval.--The
term ``joint resolution of disapproval'' means
only a joint resolution of either House of
Congress--
(I) the title of which is as
follows: ``A joint resolution
disapproving the President's proposal
to take an action relating to the
application of certain sanctions with
respect to North Korea.''; and
(II) the sole matter after the
resolving clause of which is the
following: ``Congress disapproves of
the action relating to the application
of sanctions imposed with respect to
North Korea proposed by the President
in the report submitted to Congress
under section 101(f)(1)(A) of the
Banking Restrictions Involving North
Korea (BRINK) Act of 2017 on _______
relating to ________.'', with the first
blank space being filled with the
appropriate date and the second blank
space being filled with a short
description of the proposed action.
(B) Introduction.--During the period of 30 calendar
days provided for under paragraph (2)(A), including any
additional period as applicable under the exception
provided in paragraph (2)(B), a joint resolution of
approval or joint resolution of disapproval may be
introduced--
(i) in the House of Representatives, by the
majority leader or the minority leader; and
(ii) in the Senate, by the majority leader
(or the majority leader's designee) or the
minority leader (or the minority leader's
designee).
(C) Floor consideration in house of
representatives.--
(i) Reporting and discharge.--If a
committee of the House of Representatives to
which a joint resolution of approval or joint
resolution of disapproval has been referred has
not reported the joint resolution within 10
calendar days after the date of referral, that
committee shall be discharged from further
consideration of the joint resolution.
(ii) Proceeding to consideration.--
Beginning on the third legislative day after
each committee to which a joint resolution of
approval or joint resolution of disapproval has
been referred reports the joint resolution to
the House or has been discharged from further
consideration of the joint resolution, it shall
be in order to move to proceed to consider the
joint resolution in the House. All points of
order against the motion are waived. Such a
motion shall not be in order after the House
has disposed of a motion to proceed on the
joint resolution. The previous question shall
be considered as ordered on the motion to its
adoption without intervening motion. The motion
shall not be debatable. A motion to reconsider
the vote by which the motion is disposed of
shall not be in order.
(iii) Consideration.--The joint resolution
of approval or joint resolution of disapproval
shall be considered as read. All points of
order against the joint resolution and against
its consideration are waived. The previous
question shall be considered as ordered on the
joint resolution to final passage without
intervening motion except 2 hours of debate
equally divided and controlled by the sponsor
of the joint resolution (or a designee) and an
opponent. A motion to reconsider the vote on
passage of the joint resolution shall not be in
order.
(D) Consideration in the senate.--
(i) Committee referral.--A joint resolution
of approval or joint resolution of disapproval
introduced in the Senate shall be--
(I) referred to the Committee on
Banking, Housing, and Urban Affairs if
the joint resolution relates to a
report submitted under paragraph (1)(A)
with respect to an action that is not
intended to significantly alter United
States foreign policy with regard to
North Korea; and
(II) referred to the Committee on
Foreign Relations if the joint
resolution relates to a report
submitted under paragraph (1)(A) with
respect to an action that is intended
to significantly alter United States
foreign policy with respect to North
Korea.
(ii) Reporting and discharge.--If the
committee to which a joint resolution of
approval or joint resolution of disapproval was
referred has not reported the joint resolution
within 10 calendar days after the date of
referral of the joint resolution, that
committee shall be discharged from further
consideration of the joint resolution and the
joint resolution shall be placed on the
appropriate calendar.
(iii) Proceeding to consideration.--
Notwithstanding Rule XXII of the Standing Rules
of the Senate, it is in order at any time after
the Committee on Banking, Housing, and Urban
Affairs or the Committee on Foreign Relations,
as the case may be, reports a joint resolution
of approval or joint resolution of disapproval
to the Senate or has been discharged from
consideration of such a joint resolution (even
though a previous motion to the same effect has
been disagreed to) to move to proceed to the
consideration of the joint resolution, and all
points of order against the joint resolution
(and against consideration of the joint
resolution) are waived. The motion to proceed
is not debatable. The motion is not subject to
a motion to postpone. A motion to reconsider
the vote by which the motion is agreed to or
disagreed to shall not be in order.
(iv) Rulings of the chair on procedure.--
Appeals from the decisions of the Chair
relating to the application of the rules of the
Senate, as the case may be, to the procedure
relating to a joint resolution of approval or
joint resolution of disapproval shall be
decided without debate.
(v) Consideration of veto messages.--Debate
in the Senate of any veto message with respect
to a joint resolution of approval or joint
resolution of disapproval, including all
debatable motions and appeals in connection
with the joint resolution, shall be limited to
10 hours, to be equally divided between, and
controlled by, the majority leader and the
minority leader or their designees.
(E) Rules relating to senate and house of
representatives.--
(i) Coordination with action by other
house.--If, before the passage by one House of
a joint resolution of approval or joint
resolution of disapproval of that House, that
House receives an identical joint resolution
from the other House, the following procedures
shall apply:
(I) The joint resolution of the
other House shall not be referred to a
committee.
(II) With respect to the joint
resolution of the House receiving the
joint resolution from the other House--
(aa) the procedure in that
House shall be the same as if
no joint resolution had been
received from the other House;
but
(bb) the vote on passage
shall be on the joint
resolution of the other House.
(ii) Treatment of a joint resolution of
other house.--If one House fails to introduce a
joint resolution of approval or joint
resolution of disapproval, a joint resolution
of approval or joint resolution of disapproval
of the other House shall be entitled to
expedited procedures in that House under this
subsection.
(iii) Treatment of house joint resolution
in senate.--If, following passage of a joint
resolution of approval or joint resolution of
disapproval in the Senate, the Senate receives
an identical joint resolution from the House of
Representatives, that joint resolution shall be
placed on the appropriate Senate calendar.
(iv) Application to revenue measures.--The
provisions of this subparagraph shall not apply
in the House of Representatives to a joint
resolution of approval or joint resolution of
disapproval that is a revenue measure.
(F) Rules of house of representatives and senate.--
This paragraph is enacted by Congress--
(i) as an exercise of the rulemaking power
of the Senate and the House of Representatives,
respectively, and as such is deemed a part of
the rules of each House, respectively, but
applicable only with respect to the procedure
to be followed in that House in the case of a
joint resolution of approval or joint
resolution of disapproval, and supersedes other
rules only to the extent that it is
inconsistent with such rules; and
(ii) with full recognition of the
constitutional right of either House to change
the rules (so far as relating to the procedure
of that House) at any time, in the same manner,
and to the same extent as in the case of any
other rule of that House.
(g) Briefing Required.--Not later than 180 days after the date of
the enactment of this Act, and every 180 days thereafter, the President
shall brief the appropriate congressional committees on the status of
efforts by the President to prevent conduct described in subparagraphs
(A) through (E) of subsection (a)(1).
(h) Rule of Construction.--Nothing in this section shall be
construed to prohibit any person from, or authorize or require the
imposition of sanctions with respect to any person for, conducting or
facilitating any transaction for the sale or donation of agricultural
commodities, food, medicine, or medical devices.
(i) Appropriate Congressional Committees and Leadership Defined.--
In this section, the term ``appropriate congressional committees and
leadership'' means--
(1) the Committee on Banking, Housing, and Urban Affairs,
the Committee on Foreign Relations, and the majority and
minority leaders of the Senate; and
(2) the Committee on Financial Services, the Committee on
Foreign Affairs, and the Speaker, the majority leader, and the
minority leader of the House of Representatives.
SEC. 102. EXPANSION OF LICENSING REQUIREMENTS FOR TRANSACTIONS IN NORTH
KOREAN COVERED PROPERTY.
(a) License Required.--
(1) In general.--Except as provided in paragraph (2), not
later than 180 days after the date of the enactment of this
Act, the President shall prescribe regulations prohibiting any
transaction involving the manufacture, sale, purchase,
transfer, import, or export of North Korean covered property by
a United States person or conducted in the United States.
(2) Exception.--
(A) In general.--Except as provided in subparagraph
(B), the Secretary may grant licenses and permits for
the following purposes:
(i) For any purpose covered by an exemption
or waiver under section 208 of the North Korea
Sanctions and Policy Enhancement Act of 2016
(22 U.S.C. 9228), including humanitarian,
diplomatic, consular, law enforcement, and
other purposes.
(ii) To import food products into North
Korea if such food products are not defined as
luxury goods.
(iii) To meet an urgent and compelling
humanitarian need.
(iv) For activities to promote human rights
in North Korea, the development of private
agriculture and markets in North Korea, and the
free flow of information to, from, and within
North Korea.
(v) To import agricultural products,
medicine, or medical devices into North Korea
if such products, medicine, or devices are
classified as designated ``EAR 99'' under
subchapter C of chapter VII of title 15, Code
of Federal Regulations, or any successor
regulations (commonly known as the ``Export
Administration Regulations''), and not
controlled under--
(I) the Export Administration Act
of 1979 (50 U.S.C. App. 2401 et seq.),
as continued in effect under the
International Emergency Economic Powers
Act (50 U.S.C. 1701 et seq.);
(II) the Arms Export Control Act
(22 U.S.C. 2751 et seq.);
(III) part B of title VIII of the
Nuclear Proliferation Prevention Act of
1994 (22 U.S.C. 6301 et seq.); or
(IV) the Chemical and Biological
Weapons Control and Warfare Elimination
Act of 1991 (22 U.S.C. 5601 et seq.).
(B) Exception.--The Secretary may not grant a
license or permit under subparagraph (A) for an
activity described in section 104(a) of the North Korea
Sanctions and Policy Enhancement Act of 2016 (22 U.S.C.
9214(a)).
(b) Penalties.--
(1) In general.--A person shall be fined not more than
$5,000,000, imprisoned for not more than 20 years, or both, if
the person knowingly--
(A) engages in a transaction described in
subsection (a)(1), except pursuant to a license or
permit granted under this section or regulations
prescribed pursuant to this section; or
(B) evades a requirement to obtain a license or
permit under this section or a regulations prescribed
pursuant to this section.
(2) Forfeiture of property.--Any property, real or
personal, that is involved in a transaction that is a violation
of subsection (a)(1), is involved in an attempt to conduct such
a transaction, or constitutes or is derived from proceeds
traceable to such a transaction, is subject to forfeiture to
the United States.
(c) Report Required.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, and annually thereafter, the
President shall submit to the appropriate congressional
committees a report listing any licenses or permits granted
under subsection (a).
(2) Form.--Each report required under paragraph (1) shall
be submitted in unclassified form but may include a classified
annex.
(3) Public availability.--Not later than 30 days after the
submission of a report under paragraph (1), the Secretary of
the Treasury and the Secretary of State shall each publish the
unclassified part of the report on a publicly available
Internet website of the Department of the Treasury and the
Department of State, as the case may be.
(d) Termination of Requirements.--The President may terminate the
prohibition on transactions described in subsection (a) and the
imposition of penalties under subsection (b) if the President submits
to the appropriate congressional committees the certification described
in section 402 of the North Korea Sanctions and Policy Enhancement Act
of 2016 (22 U.S.C. 9252).
(e) Modification of Definition of Specified Unlawful Activity for
Money Laundering Purposes.--Section 1956(c)(7)(D) of title 18, United
States Code, is amended--
(1) by striking ``or section 104(a) of'' and inserting
``section 104(a) of''; and
(2) by inserting before the semicolon at the end the
following: ``, or section 102(b) of the Banking Restrictions
Involving North Korea (BRINK) Act of 2017 (relating to
transactions in certain North Korean property)''.
SEC. 103. AUTHORIZATION OF IMPOSITION OF SANCTIONS WITH RESPECT TO THE
PROVISION OF SPECIALIZED FINANCIAL MESSAGING SERVICES TO
NORTH KOREAN FINANCIAL INSTITUTIONS AND SANCTIONED
PERSONS.
(a) Sense of Congress.--It is the sense of Congress that--
(1) providers of specialized financial messaging services
have been used as a critical link between the Government of
North Korea and the international financial system;
(2) the Financial Action Task Force has repeatedly called
for jurisdictions to apply countermeasures to protect the
financial system from the risks of money laundering and
proliferation financing emanating from North Korea;
(3) credible published reports have implicated the
Government of North Korea in stealing approximately $81,000,000
from the Bangladesh Bank and attempting to steal another
$951,000,000 from other banks using a financial messaging
service; and
(4) directly providing specialized financial messaging
services to, or enabling or facilitating direct or indirect
access to such messaging services for, any financial
institution designated by the United Nations Security Council
is inconsistent with applicable United Nations Security Council
resolutions.
(b) Authorization of Imposition of Sanctions.--The President may
impose sanctions pursuant to the International Emergency Economic
Powers Act (50 U.S.C. 1701 et seq.) with respect to a person if, on or
after the date that is 90 days after the date of the enactment of this
Act, the person knowingly and directly provides specialized financial
messaging services to, or knowingly enables or facilitates direct or
indirect access to such messaging services for--
(1) a North Korean financial institution;
(2) a person, including a financial institution, that is
designated pursuant to--
(A) an applicable Executive order;
(B) an applicable United Nations Security Council
resolution; or
(C) section 104 of the North Korea Sanctions and
Policy Enhancement Act of 2016 (22 U.S.C. 9214); or
(3) a person subject to sanctions under this Act.
(c) Enabling or Facilitating Access to Specialized Financial
Messaging Services.--For purposes of this section, enabling or
facilitating direct or indirect access to specialized financial
messaging services to a person described in paragraph (1) or (2) of
subsection (b) includes doing so by serving as an intermediary
financial institution with access to such messaging services.
(d) Suspension and Termination of Sanctions.--
(1) Suspension.--The President may suspend the application
of any sanctions under subsection (b) for a period of not more
than one year if the President certifies to the appropriate
congressional committees that the Government of North Korea is
taking steps toward--
(A) the verification of its compliance with
applicable United Nations Security Council Resolutions;
and
(B) fully accounting for and repatriating United
States citizens and permanent residents (including
deceased United States citizens and permanent
residents)--
(i) abducted or unlawfully held captive by
the Government of North Korea; or
(ii) detained in violation of the Agreement
Concerning a Military Armistice in Korea,
signed at Panmunjom July 27, 1953 (commonly
referred to as the ``Korean War Armistice
Agreement'').
(2) Renewal of suspension.--The President may renew a
suspension described in paragraph (1) for additional periods of
not more than 180 days if the President certifies to the
appropriate congressional committees that the Government of
North Korea continues to take steps as described in paragraph
(1).
(3) Termination of sanctions.--The President may terminate
the application of any sanctions under subsection (b) if the
President certifies that the Government of North Korea has made
significant progress towards--
(A) completely, verifiably, and irreversibly
dismantling all of its nuclear, chemical, biological,
and radiological weapons programs, including all
programs for the development of systems designed in
whole or in part for the delivery of such weapons; and
(B) fully accounting for and repatriating United
States citizens and permanent residents (including
deceased United States citizens and permanent
residents)--
(i) abducted or unlawfully held captive by
the Government of North Korea; or
(ii) detained in violation of the Agreement
Concerning a Military Armistice in Korea,
signed at Panmunjom July 27, 1953 (commonly
referred to as the ``Korean War Armistice
Agreement'').
SEC. 104. AUTHORIZATION OF IMPOSITION OF SANCTIONS WITH RESPECT TO
GOVERNMENTS THAT FAIL TO COMPLY WITH UNITED NATIONS
SECURITY COUNCIL SANCTIONS AGAINST NORTH KOREA.
(a) Briefing Required.--Not later than 90 days after the date of
the enactment of this Act, the President shall brief the appropriate
congressional committees regarding each government of a foreign country
that the President has identified as failing to--
(1) close the branches, subsidiaries, or representative
offices of North Korean financial institutions in that country;
(2) expel representatives of North Korean financial
institutions;
(3) close the representative offices and expel the
representatives of persons designated under applicable United
Nations Security Council resolutions;
(4) prohibit joint ventures with North Korean financial
institutions;
(5) deregister any vessel that constitutes North Korean
covered property; or
(6) expel North Korean nationals, including diplomats,
working on behalf of persons designated under applicable United
Nations Security Council resolutions.
(b) Publication.--The Secretary of the Treasury shall publish in
the Federal Register the names of each foreign country that has failed
to carry out the activities described in paragraphs (1) through (6) of
subsection (a).
(c) Sanctions Authorized.--With respect to any government of a
foreign country included in the briefing under subsection (a), the
President may, until such time as the President determines that the
government has taken substantial steps to terminate conduct described
in that subsection, impose one or more of the following sanctions with
respect to that government:
(1) Prohibit or curtail the export of any goods or
technology to that foreign country pursuant to the authorities
provided in section 6 of the Export Administration Act of 1979
(50 U.S.C. 4605) (as continued in effect pursuant to the
International Emergency Economic Powers Act (50 U.S.C. 1701 et
seq.)).
(2) Withhold assistance under the Foreign Assistance Act of
1961 (22 U.S.C. 2151 et seq.) to that government.
(3) Instruct the United States executive director at each
international financial institution (as defined in section
1701(c) of the International Financial Institutions Act (22
U.S.C. 262r(c))) to use the voice and vote of the United States
to oppose the provision of loans, benefits, or other use of the
funds of the institution to that government.
(d) Rule of Construction.--This section shall not be construed to
limit the use of other sanctions authorities available to the President
in response to conduct described in subsection (a).
SEC. 105. GRANTS TO CONDUCT RESEARCH ON FINANCIAL NETWORKS AND
FINANCIAL METHODS OF THE GOVERNMENT OF NORTH KOREA.
(a) Grants Authorized.--
(1) In general.--The President, acting through the Attorney
General, the Secretary of State, the Secretary of the Treasury,
or the Director of National Intelligence, may award grants to,
and enter into cooperative agreements with, States, units of
local government, nongovernmental organizations, and relevant
international organizations to further the purposes of this
title and provide data to address the issues identified in
section 2.
(2) Research initiatives.--Grants awarded and cooperative
agreements entered into under paragraph (1) shall include
grants and agreements for the purpose of conducting research
initiatives on the following:
(A) The methods used by the Government of North
Korea to deal in, transact in, or conceal the
ownership, control, or origin of North Korean covered
property.
(B) The relationship between proliferation by the
Government of North Korea and the financial industry or
financial institutions.
(C) The export by any person to the United States
of North Korean covered property.
(D) The involvement of any person in human
trafficking involving citizens or nationals of North
Korea.
(E) Information relating to transactions described
in section 102(a).
(F) Information relating to activities described in
section 104(a).
(G) Information relating to the identification,
blocking, and release of property or proceeds described
in section 107(a).
(H) The effectiveness of law enforcement and
diplomatic initiatives of Federal, State, and foreign
governments to comply with the provisions of applicable
United Nations Security Council resolutions.
(I) The effectiveness of compliance programs within
the financial industry to ensure compliance with
applicable United Nations Security Council resolutions.
(b) Interagency Coordination.--The President shall ensure that any
information collected pursuant to subsection (a) is shared among the
agencies involved in investigations described in section 102(b) of the
North Korea Sanctions and Policy Enhancement Act of 2016 (22 U.S.C.
9212).
(c) Authorization of Appropriations.--There is authorized to be
appropriated for each of fiscal years 2018 through 2021 such sums as
may be necessary to carry out this section.
SEC. 106. REPORT ON USE BY THE GOVERNMENT OF NORTH KOREA OF BENEFICIAL
OWNERSHIP RULES TO ACCESS THE INTERNATIONAL FINANCIAL
SYSTEM.
(a) In General.--Not later than November 11, 2018, the Director of
the Financial Crimes Enforcement Network of the Department of the
Treasury shall submit to the appropriate congressional committees and
publish in the Federal Register a report setting forth the findings of
the Director regarding how the Government of North Korea is using laws
regarding beneficial ownership of property to access the international
financial system.
(b) Elements.--The Director shall include in the report required
under subsection (a) proposals for such legislative and administrative
action as the Director considers appropriate.
SEC. 107. SENSE OF CONGRESS ON IDENTIFICATION AND BLOCKING OF PROPERTY
OF NORTH KOREAN OFFICIALS.
(a) In General.--It is the sense of Congress that the President
should collaborate with the Stolen Asset Recovery Initiative of the
World Bank Group and the United Nations Office on Drugs and Crime to
prioritize the identification, blocking, and release for humanitarian
purposes of--
(1) any property owned or controlled by a North Korean
official; or
(2) any significant proceeds of kleptocracy by the
Government of North Korea or a North Korean official.
(b) North Korean Official Defined.--In this section, the term
``North Korean official'' includes--
(1) the individuals described in section 304(a)(2)(B) of
the North Korea Sanctions and Policy Enhancement Act of 2016
(22 U.S.C. 9243(a)(2)(B)); and
(2) such additional officials as the President may
determine to be officials of the Government of North Korea.
SEC. 108. SENSE OF CONGRESS REGARDING THE KAESONG INDUSTRIAL COMPLEX.
(a) Findings.--Congress finds the following:
(1) On October 14, 2006, the United Nations Security
Council adopted Resolution 1718, paragraph 8(d) of which
requires member states of the United Nations to ensure that
persons under their jurisdiction prevent any funds, financial
assets, and economic resources from being used by persons or
entities engaged in or proving support for the nuclear,
chemical, or biological weapons programs of North Korea or the
ballistic missile programs of North Korea.
(2) On April 11, 2011, the President signed Executive Order
13570 (50 U.S.C. 1701 note; relating to prohibiting certain
transactions with respect to North Korea), which prohibits the
importation into the United States, directly or indirectly, of
any goods, services, or technology from North Korea, except as
provided in statute or in licenses, regulations, orders, or
directives that may be issued pursuant to that Executive order.
(3) In April 2013, the Under Secretary of the Treasury for
Terrorism and Financial Intelligence said, in reference to the
Kaesong Industrial Complex, ``Precisely what North Koreans do
with earnings from Kaesong, I think, is something that we are
concerned about.''.
(4) In February 2016, on announcing the suspension of
operations at the Kaesong Industrial Complex, the Unification
Ministry of the Republic of Korea stated that the Government of
North Korea may have used the proceeds from the Kaesong
Industrial Complex to finance its nuclear weapons program.
(5) On November 30, 2016, the United States Security
Council approved Resolution 2321, paragraph 32 of which
requires member states of the United Nations to prohibit public
and private financial support for trade with North Korea from
within their territories or by persons subject to their
jurisdiction, including the granting of export credits,
guarantees, or insurance to persons involved in such trade,
except as approved in advance by a committee appointed by the
Security Council on a case-by-case basis.
(b) Sense of Congress.--It is the sense of Congress that--
(1) the United States stands in solidarity with its ally in
the Republic of Korea, and has expressed that solidarity with
the sacrifice of 36,914 people of the United States and with
the continued presence of 29,500 members of the Armed Forces of
the United States in the Republic of Korea;
(2) the nuclear weapons program of North Korea poses a
grave and imminent threat to the freedom and security of both
the United States and the Republic of Korea;
(3) the Kaesong Industrial Complex yielded few, if any,
apparent benefits with regard to the reform, liberalization, or
disarmament of North Korea;
(4) the unconditional provision of revenue from the Kaesong
Industrial Complex to the Government of North Korea undermines
the financial pressure necessary to strict and effective
enforcement of United Nations Security Council sanctions;
(5) the strict and effective enforcement of United Nations
Security Council sanctions is the last plausible option to
achieve the complete, verifiable, irreversible, and peaceful
nuclear disarmament of North Korea; and
(6) the Kaesong Industrial Complex should not be reopened
until the Government of North Korea has completely, verifiably,
and irreversibly dismantled all of its nuclear, chemical,
biological, and radiological weapons programs, including all
programs for the development of systems designed in whole or in
part for the delivery of such weapons.
TITLE II--DIVESTMENT FROM NORTH KOREA
SEC. 201. AUTHORITY OF STATE AND LOCAL GOVERNMENTS TO DIVEST FROM
COMPANIES THAT INVEST IN NORTH KOREA.
(a) Sense of Congress.--It is the sense of Congress that the United
States should support the decision of any State or local government,
for moral, prudential, or reputational reasons, to divest from, or
prohibit the investment of assets of the State or local government in,
a person that engages in investment activities involving North Korean
covered property if North Korea is subject to economic sanctions
imposed by the United States or the United Nations Security Council.
(b) Authority To Divest.--Notwithstanding any other provision of
law, a State or local government may adopt and enforce measures that
meet the requirements of subsection (c) to divest the assets of the
State or local government from, or prohibit investment of the assets of
the State or local government in, any person that the State or local
government determines, using credible information available to the
public, engages in investment activities involving North Korean covered
property of a value of more than $10,000.
(c) Requirements.--Any measure taken by a State or local government
under subsection (b) shall meet the following requirements:
(1) Notice.--The State or local government shall provide
written notice to each person with respect to which a measure
under this section is to be applied.
(2) Timing.--The measure applied under this section shall
apply to a person not earlier than the date that is 90 days
after the date on which written notice under paragraph (1) is
provided to the person.
(3) Opportunity to demonstrate compliance.--
(A) In general.--The State or local government
shall provide to each person with respect to which a
measure is to be applied under this section an
opportunity to demonstrate to the State or local
government that the person does not engage in
investment activities in North Korean covered property.
(B) Nonapplication.--If a person with respect to
which a measure is to be applied under this section
demonstrates to the State or local government under
subparagraph (A) that the person does not engage in
investment activities in North Korean covered property,
the measure shall not apply to that person.
(4) Sense of congress on avoiding erroneous targeting.--It
is the sense of Congress that a State or local government
should not adopt a measure under subsection (b) with respect to
a person unless the State or local government has--
(A) made every effort to avoid erroneously
targeting the person; and
(B) verified that the person engages in investment
activities in North Korean covered property.
(d) Notice to Department of Justice.--Not later than 30 days after
a State or local government applies a measure under this section, the
State or local government shall notify the Attorney General of that
measure.
(e) Authorization for Prior Applied Measures.--
(1) In general.--Notwithstanding any other provision of
this section or any other provision of law, a State or local
government may enforce a measure (without regard to the
requirements of subsection (c), except as provided in paragraph
(2)) applied by the State or local government before the date
of the enactment of this Act that provides for the divestment
of assets of the State or local government from, or prohibits
the investment of the assets of the State or local government
in, any person that the State or local government determines,
using credible information available to the public, engages in
investment activities in North Korean covered property that are
identified in that measure.
(2) Application of notice requirements.--A measure
described in paragraph (1) shall be subject to the requirements
of paragraphs (1), (2), and (3)(A) of subsection (c) on and
after the date that is two years after the date of the
enactment of this Act.
(f) No Preemption.--A measure applied by a State or local
government authorized under subsection (b) or (e) is not preempted by
any Federal law.
(g) Definitions.--In this section:
(1) Asset.--
(A) In general.--Except as provided in subparagraph
(B), the term ``asset'' means public monies, and
includes any pension, retirement, annuity, endowment
fund, or similar instrument, that is controlled by a
State or local government.
(B) Exception.--The term ``asset'' does not include
employee benefit plans covered by title I of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1001 et seq.).
(2) Investment.--The term ``investment'' includes--
(A) a commitment or contribution of funds or
property;
(B) a loan or other extension of credit; and
(C) the entry into or renewal of a contract for
goods or services.
(h) Effective Date.--
(1) In general.--Except as provided in paragraph (2) and
subsection (e), this section applies to measures applied by a
State or local government before, on, or after the date of the
enactment of this Act.
(2) Notice requirements.--Except as provided in subsection
(h), subsections (c) and (d) apply to measures applied by a
State or local government on or after the date of the enactment
of this Act.
SEC. 202. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY ASSET
MANAGERS.
(a) In General.--Section 13(c)(1) of the Investment Company Act of
1940 (15 U.S.C. 80a-13(c)(1)) is amended--
(1) in subparagraph (A) by striking ``or'' at the end;
(2) in subparagraph (B) by striking the period and
inserting ``; or''; and
(3) by adding at the end the following:
``(C) engage in investment activities involving
North Korean covered property, as defined in section 3
of the Banking Restrictions Involving North Korea
(BRINK) Act of 2017.''.
(b) Securities and Exchange Commission Regulations.--Not later than
120 days after the date of the enactment of this Act, the Securities
and Exchange Commission shall issue any revisions the Securities and
Exchange Commission determines to be necessary to the regulations
requiring disclosure by each registered investment company that divests
itself of securities in accordance with section 13(c) of the Investment
Company Act of 1940 (15 U.S.C. 80a-13(c)), including in accordance with
paragraph (1)(C) of that section, as added by subsection (a)(3).
SEC. 203. SENSE OF CONGRESS REGARDING CERTAIN ERISA PLAN INVESTMENTS.
It is the sense of Congress that--
(1) a fiduciary of an employee benefit plan, as defined in
section 3(3) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1002(3)), may divest plan assets from, or avoid
investing plan assets in, any person the fiduciary determines
engages in investment activities involving North Korean covered
property, if--
(A) the fiduciary makes that determination using
credible information that is available to the public;
and
(B) the fiduciary prudently determines that the
result of that divestment or avoidance of investment
would not be expected to provide the employee benefit
plan with--
(i) a lower rate of return than alternative
investments with commensurate degrees of risk;
or
(ii) a higher degree of risk than
alternative investments with commensurate rates
of return; and
(2) by divesting assets or avoiding the investment of
assets as described in paragraph (1), the fiduciary is not
breaching the responsibilities, obligations, or duties imposed
upon the fiduciary by subparagraph (A) or (B) of section
404(a)(1) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1104(a)(1)).
SEC. 204. RULE OF CONSTRUCTION.
Nothing in this Act or any other provision of law authorizing
sanctions with respect to North Korea shall be construed to affect or
displace--
(1) the authority of a State or local government to issue
and enforce rules governing the safety, soundness, and solvency
of a financial institution subject to its jurisdiction; or
(2) the regulation and taxation by the several States of
the business of insurance, pursuant to the Act of March 9, 1945
(59 Stat. 34, chapter 20; 15 U.S.C. 1011 et seq.) (commonly
known as the ``McCarran-Ferguson Act'').
TITLE III--GENERAL AUTHORITIES
SEC. 301. RULEMAKING.
The President may prescribe such rules and regulations as may be
necessary to carry out this Act.
SEC. 302. AUTHORITY TO CONSOLIDATE REPORTS.
(a) In General.--Any and all reports required to be submitted to
the appropriate congressional committees under this Act that are
subject to a deadline for submission consisting of the same unit of
time may be consolidated into a single report that is submitted
pursuant to that deadline.
(b) Contents.--Any reports consolidated under subsection (a) shall
contain all information required under this Act and any other elements
that may be required by existing law.
SEC. 303. RULE OF CONSTRUCTION.
Nothing in this Act shall be construed to limit the authority or
obligation of the President--
(1) to apply the sanctions described in section 104 of the
North Korea Sanctions and Policy Enhancement Act of 2016 (22
U.S.C. 9214) with regard to persons that meet the criteria for
designation under such section; or
(2) to exercise any other law enforcement authorities
available to the President.
<all>