[Federal Register Volume 85, Number 70 (Friday, April 10, 2020)]
[Rules and Regulations]
[Pages 20158-20163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07497]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 510


North Korea Sanctions Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule.

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SUMMARY: The Department of the Treasury's Office of Foreign Assets 
Control (OFAC) is amending the North Korea Sanctions Regulations to 
implement the Treasury-administered provisions of the North Korea 
Sanctions and Policy Enhancement Act of 2016, as amended by the 
Countering America's Adversaries Through Sanctions Act and the National 
Defense Authorization Act for Fiscal Year 2020. Specifically, OFAC is 
incorporating blocking and correspondent account sanctions provisions, 
adding a new prohibition that is applicable for persons that are owned 
or controlled by a U.S. financial institution and established or 
maintained outside the United States, adding new statutory exemptions 
relevant to certain newly added prohibitions, making technical and 
conforming edits to three definitions, revising an interpretive 
provision, and updating the authorities and delegation sections of the 
regulations. OFAC is also amending the definition of luxury goods.

DATES: This rule is effective April 10, 2020.

FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for 
Licensing, tel.: 202-622-2480; Assistant Director for Regulatory 
Affairs, tel.: 202-622-4855; or Assistant Director for Sanctions 
Compliance & Evaluation, tel.: 202-622-2490.

SUPPLEMENTARY INFORMATION: 

Electronic Availability

    This document and additional information concerning OFAC are 
available on OFAC's website (www.treasury.gov/ofac).

Background

    On November 4, 2010, OFAC issued the North Korea Sanctions 
Regulations, 31 CFR part 510 (75 FR 67912, November 4, 2010) (the 
``Regulations''). Since then, OFAC has amended the Regulations several 
times. This rule amends the Regulations to incorporate the Treasury-
administered provisions of the North Korea Sanctions and Policy 
Enhancement Act of 2016, Public Law 114-122, 130 Stat. 93 (22 U.S.C. 
9201-9255) (NKSPEA), as amended by the Countering America's Adversaries 
Through Sanctions Act, Public Law 115-44, 131 Stat. 886 (22 U.S.C. 9201 
et seq.) (CAATSA) and the National Defense Authorization Act for Fiscal 
Year 2020, Public Law 116-92, 133 Stat. 1198 (FY 2020 NDAA).

NKSPEA

    On February 18, 2016, the President signed NKSPEA into law. Among 
other things, section 104 of NKSPEA provides that the President, with 
certain exceptions, shall block and prohibit all transactions in 
property and interests in property that are in the United States, that 
come within the United States, or that are or come within control or 
possession of a U.S. person of: The Government of North Korea, the 
Workers' Party of Korea, and other persons the President determines 
knowingly engage in certain North Korea-related activities.
    On August 2, 2017, the President signed CAATSA into law. Title III 
of CAATSA, among other things, amends NKSPEA. Section 311(a) of CAATSA 
amends section 104(a) of NKSPEA to provide that the President shall, 
with certain exceptions, block and prohibit all transactions in 
property and interests in property that are in the United States, that 
come into the United States, or that are or come into the possession of 
U.S. persons of any person the President determines knowingly, directly 
or indirectly, imports, exports, or reexports to or from North Korea 
any defense article or defense service or engages in certain other 
North Korea-related activities. Section 104(b) of NKSPEA provides that 
the President may, with certain exceptions, block any person that 
knowingly engages in, contributes to, assists, sponsors, or provides 
financial, material, or technological support for, or goods and 
services in support of, any sanctioned person.
    On December 20, 2019, the President signed the FY 2020 NDAA. Title 
LXXI of the 2020 NDAA, titled the ``Otto Warmbier North Korea Sanctions 
and Enforcement Act of 2019,'' among other things, amends NKSPEA by 
adding new sections 104(g), 201B, and 201C. NKSPEA section 104(g) 
requires the President to designate any person that he determines 
knowingly engages in certain specified North Korea-related activities.
    New section 201B of NKSPEA requires the Secretary of the Treasury 
to impose sanctions with respect to any foreign financial institution 
(FFI) that the Secretary of the Treasury determines, in consultation 
with the Secretary of State, knowingly on or after April 18, 2020, 
provides significant financial services to any person designated for 
the imposition of sanctions with respect to North Korea under NKSPEA 
subsections 104(a), 104(b), or 104(g), an applicable Executive order, 
or an applicable United Nations Security Council resolution. Section 
201B provides that the Secretary may impose blocking sanctions on such 
FFIs, or may prohibit or impose strict conditions on the opening or

[[Page 20159]]

maintenance of a correspondent account or a payable-through account in 
the United States.
    New section 201C of NKSPEA requires the Secretary of the Treasury, 
in consultation with the Secretary of State, to prohibit an entity 
owned or controlled by a U.S. financial institution and established or 
maintained outside the United States from knowingly engaging in any 
transaction, directly or indirectly, with the Government of North Korea 
or any person designated for the imposition of sanctions with respect 
to North Korea under NKSPEA subsections 104(a), 104(b), or 104(g), an 
applicable Executive order, or an applicable United Nations Security 
Council resolution.

Regulatory Amendments

    With this rule, OFAC is incorporating the blocking and 
correspondent or payable-through account sanctions contained in 
sections 104(a), 104(b), 104(g), and 201B of NKSPEA, as amended by 
CAATSA and the FY 2020 NDAA (NKSPEA, as amended), into the Regulations 
as new Sec.  510.201(a)(3)(vii) through (x), respectively. OFAC is 
incorporating the correspondent or payable-through account sanctions of 
section 201B of NKSPEA, as amended, in Sec.  510.210(c), and adding a 
new provision at Sec.  510.214 to implement section 201C of NKSPEA, as 
amended.
    OFAC is also incorporating certain statutory exemptions under 
NKSPEA, as amended, in new paragraph (f) to Sec.  510.213; amending the 
definition of luxury goods at Sec.  510.317 to create a regulatory 
exception to exclude items approved for import, export, or reexport to 
or into North Korea by the United Nations Security Council; making 
technical and conforming edits to the definitions of ``effective date'' 
in Sec.  510.304, ``financial, material, or technological support'' in 
Sec.  510.306, and ``North Korean person'' in Sec.  510.319; amending 
the interpretive provision at Sec.  510.413 related to significant 
transactions; updating the authorities section of the Regulations to 
incorporate the FY 2020 NDAA and to shorten citations to conform with 
Federal Register guidance; and amending the delegation section at Sec.  
510.802 to add the delegation of certain functions with respect to the 
FY 2020 NDAA.

Public Participation

    Because the amendment of the Regulations involves a foreign affairs 
function, the provisions of Executive Order 12866 and the 
Administrative Procedure Act (5 U.S.C. 553) requiring notice of 
proposed rulemaking, opportunity for public participation, and delay in 
effective date, as well as the provisions of Executive Order 13771, are 
inapplicable. Because no notice of proposed rulemaking is required for 
this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not 
apply.

Paperwork Reduction Act

    The collections of information related to the Regulations are 
contained in 31 CFR part 501 (the ``Reporting, Procedures and Penalties 
Regulations''). Pursuant to the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507), those collections of information have been approved by 
the Office of Management and Budget under control number 1505-0164. An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless the collection of 
information displays a valid control number.

List of Subjects in 31 CFR Part 510

    Administrative practice and procedure, Banks, Banking, Blocking of 
assets, Foreign financial institutions, Foreign trade, Imports, North 
Korea, Services, United Nations, Vessels, Workers' Party of Korea.

    For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control amends 31 CFR part 510 as 
follows:

PART 510--NORTH KOREA SANCTIONS REGULATIONS

0
1. The authority citation for part 510 is revised to read as follows:

     Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; 22 U.S.C. 287c; 28 U.S.C. 2461 note; 50 U.S.C. 1705 note; 
22 U.S.C. 9201-9255; 22 U.S.C. 9201 note; Pub. L. 116-92, 133 Stat. 
1198; E.O. 13466, 73 FR 36787, 3 CFR, 2008 Comp., p. 195; E.O. 
13551, 75 FR 53837, 3 CFR, 2010 Comp., p. 242; E.O. 13570, 76 FR 
22291, 3 CFR, 2011 Comp., p. 233; E.O. 13687, 80 FR 819, 3 CFR, 2015 
Comp., p. 259; E.O. 13722, 81 FR 14943, 3 CFR, 2016 Comp., p. 446; 
E.O. 13810, 82 FR 44705, 3 CFR, 2017 Comp., p. 379.

Subpart B--Prohibitions

0
2. Amend Sec.  510.201 as follows:
0
a. Remove the word ``or'' at the end of paragraph (a)(3)(v)(F).
0
b. Remove the period at the end of paragraph (a)(3)(vi)(B) and add a 
semicolon in its place.
0
c. Redesignate Notes 3, 4, and 5 to paragraph (a) as Notes 4, 5, and 6 
to paragraph (a).
0
d. Add paragraphs (a)(3)(vii) through (x).
0
e. Revise newly redesignated Note 4 to paragraph (a).
    The additions and revision read as follows:


Sec.  510.201  Prohibited transactions involving blocked property.

    (a) * * *
    (3) * * *
    (vii) Section 104(a) of the North Korea Sanctions and Policy 
Enhancement Act of 2016, as amended by the Countering America's 
Adversaries Through Sanctions Act and the National Defense 
Authorization Act for Fiscal Year 2020 (NKSPEA, as amended). Any person 
the Secretary of the Treasury determines, in consultation with the 
Secretary of State, knowingly:
    (A) Directly or indirectly, imports, exports, or reexports to, 
into, or from North Korea any goods, services, or technology controlled 
for export by the United States because of the use of such goods, 
services, or technology for weapons of mass destruction or delivery 
systems for such weapons and materially contributes to the use, 
development, production, possession, or acquisition by any person of a 
nuclear, radiological, chemical, or biological weapon or any device or 
system designed in whole or in part to deliver such a weapon;
    (B) Directly or indirectly, provides training, advice, or other 
services or assistance, or engages in significant financial 
transactions, relating to the manufacture, maintenance, or use of any 
such weapon, device, or system to be imported, exported, or reexported 
to, into, or from North Korea;
    (C) Directly or indirectly, imports, exports, or reexports luxury 
goods to or into North Korea;
    (D) Engages in, is responsible for, or facilitates censorship by 
the Government of North Korea;
    (E) Engages in, is responsible for, or facilitates serious human 
rights abuses by the Government of North Korea;
    (F) Directly or indirectly, engages in money laundering, the 
counterfeiting of goods or currency, bulk cash smuggling, or narcotics 
trafficking that supports the Government of North Korea or any senior 
official or person acting for or on behalf of that Government;
    (G) Engages in significant activities undermining cybersecurity 
through the use of computer networks or systems against foreign 
persons, governments, or other entities on behalf of the Government of 
North Korea;
    (H) Directly or indirectly, sells, supplies, or transfers to or 
from the Government of North Korea or any person acting for or on 
behalf of that Government, a significant amount of precious metal, 
graphite, raw or semi-finished metals or aluminum, steel,

[[Page 20160]]

coal, or software, for use by or in industrial processes directly 
related to weapons of mass destruction and delivery systems for such 
weapons, other proliferation activities, the Korean Workers' Party, 
armed forces, internal security or intelligence activities, or the 
operation and maintenance of political prison camps or forced labor 
camps, including outside of North Korea;
    (I) Directly or indirectly, imports, exports, or reexports to, 
into, or from North Korea any arms or related materiel or any defense 
article or defense service (as such terms are defined in section 47 of 
the Arms Export Control Act (22 U.S.C. 2794));
    (J) Directly or indirectly, purchases or otherwise acquires from 
North Korea any significant amounts of gold, titanium ore, vanadium 
ore, copper, silver, nickel, zinc, or rare earth minerals;
    (K) Directly or indirectly, sells or transfers to North Korea any 
significant amounts of rocket, aviation, or jet fuel (except for use by 
a civilian passenger aircraft outside North Korea, exclusively for 
consumption during its flight to North Korea or its return flight);
    (L) Directly or indirectly, provides significant amounts of fuel or 
supplies, provides bunkering services, or facilitates a significant 
transaction or transactions to operate or maintain, a vessel or 
aircraft that is designated under an applicable Executive order or an 
applicable United Nations Security Council resolution (as such terms 
are defined in NKSPEA, as amended), or that is owned or controlled by a 
person designated under an applicable Executive order or applicable 
United Nations Security Council resolution (as such terms are defined 
in NKSPEA, as amended);
    (M) Directly or indirectly, insures, registers, facilitates the 
registration of, or maintains insurance or a registration for, a vessel 
owned or controlled by the Government of North Korea, except as 
specifically approved by the United Nations Security Council;
    (N) Directly or indirectly, maintains a correspondent account as 
defined in section 201A(d)(1) of NKSPEA, as amended, with any North 
Korean financial institution, except as specifically approved by the 
United Nations Security Council; or
    (O) Attempts to engage in any of the conduct described in 
paragraphs (a)(3)(vii)(A) through (N) of this section;
    (viii) Section 104(b) of NKSPEA, as amended. Any person the 
Secretary of the Treasury determines, in consultation with the 
Secretary of State, knowingly:
    (A) Engages in, contributes to, assists, sponsors, or provides 
financial, material, or technological support for, or goods and 
services in support of, any person designated pursuant to: An 
applicable United Nations Security Council resolution (as defined in 
NKSPEA, as amended); this section; or any applicable Executive order 
(as defined in NKSPEA, as amended);
    (B) Contributed to:
    (1) The bribery of an official of the Government of North Korea or 
any person acting for on behalf of that official;
    (2) The misappropriation, theft, or embezzlement of public funds 
by, or for the benefit of, an official of the Government of North Korea 
or any person acting for or on behalf of that official; or
    (3) The use of any proceeds of any activity described in paragraph 
(a)(3)(viii)(B)(1) or (2) of this section;
    (C) Materially assisted, sponsored, or provided significant 
financial, material, or technological support for, or goods or services 
to or in support of, the activities described in paragraph 
(a)(3)(viii)(A) or (B) of this section;
    (D) Directly or indirectly, purchased or otherwise acquired from 
the Government of North Korea significant quantities of coal, iron, or 
iron ore, in excess of the limitations provided in applicable United 
Nations Security Council resolutions (as defined in NKSPEA, as 
amended);
    (E) Directly or indirectly, purchased or otherwise acquired 
significant types or amounts of textiles from the Government of North 
Korea;
    (F) Facilitated a significant transfer of funds or property of the 
Government of North Korea that materially contributes to any violation 
of an applicable United Nations Security Council resolution (as defined 
in NKSPEA, as amended);
    (G) Directly or indirectly, facilitated a significant transfer to 
or from the Government of North Korea of bulk cash, precious metals, 
gemstones, or other stores of value not described under paragraph 
(a)(3)(vii)(J) of this section;
    (H) Directly or indirectly, sold, transferred, or otherwise 
provided significant amounts of crude oil, condensates, refined 
petroleum, other types of petroleum or petroleum byproducts, liquefied 
natural gas, or other natural gas resources to the Government of North 
Korea (except for heavy fuel oil, gasoline, or diesel fuel for 
humanitarian use or as excepted under paragraph (a)(3)(vii)(K) of this 
section);
    (I) Directly or indirectly, engaged in, facilitated, or was 
responsible for the online commercial activities of the Government of 
North Korea, including online gambling;
    (J) Directly or indirectly, purchased or otherwise acquired fishing 
rights from the Government of North Korea;
    (K) Knowingly, directly or indirectly, purchased or otherwise 
acquired significant types or amounts of food or agricultural products 
from the Government of North Korea;
    (L) Directly or indirectly, engaged in, facilitated, or was 
responsible for the exportation of workers from North Korea in a manner 
intended to generate significant revenue, directly or indirectly, for 
use by the Government of North Korea or by the Workers' Party of Korea;
    (M) Conducted a significant transaction or transactions in North 
Korea's transportation, mining, energy, or financial services 
industries; or
    (N) Facilitated the operation of any branch, subsidiary, or office 
of a North Korean financial institution, except as specifically 
approved by the United Nations Security Council, and other than through 
a correspondent account as described in paragraph (a)(3)(vii)(N) of 
this section;
    (ix) Section 104(g) of NKSPEA, as amended. Any person the Secretary 
of the Treasury determines, in consultation with the Secretary of 
State, knowingly:
    (A) Directly or indirectly, engages in the importation from or 
exportation to North Korea of significant quantities of:
    (1) Coal, textiles, seafood, iron, or iron ore;
    (2) Refined petroleum products or crude oil above limits set by the 
United Nations Security Council and with which the United States 
concurs; or
    (3) Services or technology related to goods specified in paragraph 
(a)(3)(ix)(A)(1) and (2) of this section;
    (B) Facilitates a significant transfer of funds or property of the 
Government of North Korea that materially contributes to any violation 
of an applicable United Nations Security Council resolution (as defined 
in NKSPEA, as amended);
    (C) Directly or indirectly, engages in, facilitates, or is 
responsible for the exportation of workers from North Korea, or the 
employment of such workers, in a manner that generates significant 
revenue, directly or indirectly, for use by the Government of North 
Korea or by the Workers' Party of Korea;
    (D) Directly or indirectly, sells or transfers a significant number 
of vessels to North Korea, except as specifically approved by the 
United Nations Security Council;
    (E) Engages in a significant activity to charter, insure, register, 
facilitate the registration of, or maintain insurance or

[[Page 20161]]

a registration for, a vessel owned, controlled, commanded, or crewed by 
a North Korean person; or
    (F) Contributes to and participates in:
    (1) A significant act of bribery of an official of the Government 
of North Korea or any person acting for or on behalf of that official;
    (2) The misappropriation, theft, or embezzlement of a significant 
amount of public funds by, or for the benefit of, an official of the 
Government of North Korea or any person acting for or on behalf of that 
official; or
    (3) The use of any proceeds of any activity described in paragraph 
(a)(3)(ix)(A) or (B) of this section; or
    (x) Section 201B of NKSPEA, as amended. Any foreign financial 
institution that the Secretary of the Treasury determines, in 
consultation with the Secretary of State, knowingly, on or after April 
18, 2020, provides significant financial services to any person 
designated for the imposition of sanctions with respect to North Korea 
described in paragraphs (a)(3)(vii) through (ix) of this section and 
under an applicable Executive order (as defined in NKSPEA, as amended) 
or an applicable United Nations Security Council resolution (as defined 
in NKSPEA, as amended), and with respect to which the Secretary of the 
Treasury has exercised the authority to block all property and 
interests in property.

    Note 3 to paragraph (a)(3)(x):  See Sec.  510.210(c) for 
alternative sanctions that can be imposed on a foreign financial 
institution when the determination specified in paragraph (a)(3)(x) 
of this section is made.


    Note 4 to paragraph (a):  The names of persons listed in or 
designated or identified pursuant to E.O. 13551, E.O. 13687, E.O. 
13722, or E.O. 13810 and whose property and interests in property 
are blocked pursuant to those orders and who are referenced in 
paragraph (a) of this section are published in the Federal Register 
and incorporated into OFAC's Specially Designated Nationals and 
Blocked Persons List (SDN List) with the following identifiers: for 
E.O. 13551: ``[DPRK];'' for E.O. 13687: ``[DPRK2];'' for E.O. 13722: 
``[DPRK3];'' and for E.O. 13810: ``[DPRK4].'' The names of persons 
designated or identified pursuant to NKSPEA, as amended, will be 
incorporated into the SDN List with the identifier ``[DPRK-
NKSPEA].'' Certain transactions with persons blocked pursuant to 
paragraph (a) of this section, or blocked pursuant to other parts of 
31 CFR chapter V in connection with North Korea-related activities, 
may result in the imposition of secondary sanctions, and therefore 
such blocked persons' entries on the SDN List will also include the 
descriptive prefix text ``Secondary sanctions risk:'', followed by 
information about the applicable secondary sanctions authority. 
Pursuant to Sec.  510.214, persons owned or controlled by a U.S. 
financial institution are subject to certain prohibitions under this 
part; as a result, the entries of persons blocked pursuant to 
paragraph (a) of this section, or blocked pursuant to other parts of 
31 CFR chapter V in connection with North Korea-related activities, 
will also include the descriptive prefix text ``Transactions 
Prohibited For Persons Owned or Controlled By U.S. Financial 
Institutions:'', followed by information about the applicable 
sanctions authority. The SDN List is accessible through the 
following page on OFAC's website: www.treasury.gov/sdn. Additional 
information pertaining to the SDN List can be found in appendix A to 
this chapter. See Sec.  510.411 concerning entities that may not be 
listed on the SDN List but whose property and interests in property 
are nevertheless blocked pursuant to paragraph (a) of this section. 
The property and interests in property of persons who meet the 
definition of the term Government of North Korea, as defined in 
Sec.  510.311, are blocked pursuant to paragraph (a) of this section 
regardless of whether the names of such persons are published in the 
Federal Register or incorporated into the SDN List.


0
3. Amend Sec.  510.210 as follows:
0
a. In the heading of paragraph (b), add ``prohibited by Executive Order 
13810'' after the word ``institutions''.
0
b. Remove Note 1 to Paragraph (b).
0
c. Redesignate paragraphs (c) and (d) as paragraphs (d) and (e).
0
d. Add new paragraph (c).
0
e. In newly redesignated paragraph (d) introductory text, add ``or 
(c)'' after the words ``paragraph (b)''.
0
f. Add Note 1 to Sec.  510.210.
    The additions read as follows:


Sec.  510.210  Prohibitions or strict conditions with respect to 
correspondent or payable-through accounts or blocking of certain 
foreign financial institutions identified by the Secretary of the 
Treasury.

* * * * *
    (c) Sanctionable activity by foreign financial institutions 
prohibited by NKSPEA, as amended. The Secretary of the Treasury, in 
consultation with the Secretary of State, may determine that a foreign 
financial institution has, on or after April 18, 2020, knowingly 
provided significant financial services to any person designated for 
the imposition of sanctions with respect to North Korea described in 
Sec.  510.201(a)(3)(vii) through (ix) and under an applicable Executive 
order (as defined in NKSPEA, as amended) or an applicable United 
Nations Security Council resolution (as defined in NKSPEA, as amended).
* * * * *

    Note 1 to Sec.  510.210:  For information regarding persons 
blocked pursuant to this part, or another part of 31 CFR chapter V 
in connection with North Korea-related activities, including 
identifier information for entries on the SDN List, see Note 4 to 
Sec.  510.201(a).

* * * * *

0
4. Amend Sec.  510.213 by adding paragraph (f) to read as follows:


Sec.  510.213  Exempt transactions.

* * * * *
    (f) Exemptions under the North Korea Sanctions and Policy 
Enhancement Act of 2016, as amended by the Countering America's 
Adversaries Through Sanctions Act and the National Defense 
Authorization Act for Fiscal Year 2020. The prohibitions contained in 
Sec. Sec.  510.201(a)(3)(vii) through (x), 510.210(c), and 510.214 do 
not apply to the following activities:
    (1) Activities subject to the reporting requirements under title V 
of the National Security Act of 1947 (50 U.S.C. 3091 et seq.), or to 
any authorized intelligence activities of the United States.
    (2) Any transaction necessary to comply with United States 
obligations under the Agreement between the United Nations and the 
United States of America regarding the Headquarters of the United 
Nations, signed at Lake Success June 26, 1947, and entered into force 
November 21, 1947, or under the Convention on Consular Relations, done 
at Vienna April 24, 1963, and entered into force March 19, 1967, or 
under other international agreements.
    (3) Any activities incidental to the POW/MIA accounting mission in 
North Korea, including activities by the Defense POW/MIA Accounting 
Agency and other governmental or nongovernmental organizations tasked 
with identifying or recovering the remains of members of the United 
States Armed Forces in North Korea.

0
5. Add Sec.  510.214 to read as follows:


Sec.  510.214  Prohibitions on persons owned or controlled by U.S. 
financial institutions.

    Except as otherwise authorized pursuant to this part, any person 
that is owned or controlled by a U.S. financial institution and 
established or maintained outside the United States is prohibited from 
knowingly engaging in any transaction directly or indirectly with the 
Government of North Korea or any person designated for the imposition 
of sanctions with respect to North Korea described in Sec.  
510.201(a)(3)(vii) through (ix) and under an applicable Executive order 
(as defined in NKSPEA, as amended) or an applicable United Nations 
Security Council resolution (as defined in NKSPEA, as amended).

    Note 1 to Sec.  510.214:  For information regarding persons 
blocked pursuant to this

[[Page 20162]]

part, or another part of 31 CFR chapter V in connection with North 
Korea-related activities, including identifier information for 
entries on the SDN List, see Note 4 to Sec.  510.201(a).


    Note 2 to Sec.  510.214:  A U.S. financial institution is 
subject to the civil penalties provided for in section 206(b) of the 
International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) 
if any entity that it owns or controls violates, attempts to 
violate, conspires to violate, or causes a violation of the 
prohibitions set forth in this section. See Sec.  510.701.

Subpart C--General Definitions

0
6. Amend Sec.  510.304 as follows:
0
a. In paragraph (a)(4), remove the period at the end of the paragraph 
and add in its place a semicolon.
0
b. In paragraph (a)(8), remove the word ``and'' after the semicolon.
0
c. In paragraph (a)(9), remove ``Sec.  510.210'' everywhere it appears 
and add in its place ``Sec.  510.210(b)'' and remove ``such 
prohibition, condition, or blocking.'' and add in its place ``such 
prohibition or condition; and''.
0
d. Add paragraph (a)(10).
0
e. In paragraph (b), add ``, or a notice of the imposition of a 
prohibition or strict condition pursuant to Sec.  510.210,'' after the 
words ``interests in property''.
    The addition reads as follows:


Sec.  510.304  Effective date.

    (a) * * *
    (10) With respect to the prohibition set forth in Sec.  510.210(c), 
April 18, 2020. The effective date of a prohibition or strict condition 
imposed pursuant to Sec.  510.210(c) on the opening or maintaining of a 
correspondent account or a payable-through account in the United States 
by a U.S. financial institution for a particular foreign financial 
institution is the earlier of the date the U.S. financial institution 
receives actual or constructive notice of such prohibition or 
condition.
* * * * *


Sec.  510.306  [Amended]

0
7. In Sec.  510.306, remove ``Sec.  510.201(a)(3)(ii)(E), 
(a)(3)(iii)(D), (a)(3)(iv)(G), and (a)(3)(v)(E),'' and add in its place 
``Sec.  510.201(a),''.

0
8. Revise Sec.  510.317 to read as follows:


Sec.  510.317  Luxury goods.

    The term luxury goods, as used in Sec.  510.201(a) includes those 
items listed in 15 CFR 746.4(b)(1) and supplement no. 1 to part 746, 
similar items, and items so designated under an applicable United 
Nations Security Council resolution (as defined by the North Korea 
Sanctions and Policy Enhancement Act of 2016, as amended by the 
Countering America's Adversaries Through Sanctions Act and the National 
Defense Authorization Act for Fiscal Year 2020), except as specifically 
approved by the United Nations Security Council for import, export, or 
reexport to or into North Korea.


Sec.  510.319  [Amended]

0
9. In Sec.  510.319(b), remove ``Sec.  510.201(a)(3)(v)'' and add in 
its place ``Sec.  510.201(a)''.

Subpart D--Interpretations

0
10. Revise Sec.  510.413 to read as follows:


Sec.  510.413  Significant activity or activities; significant 
transaction(s); significant financial service(s).

    In determining, for purposes of Sec. Sec.  510.201(a) and 510.210, 
whether an activity or activities, transaction(s), or financial 
service(s) are significant, the Secretary of the Treasury or the 
Secretary's designee may consider the totality of the facts and 
circumstances. As a general matter, the Department of the Treasury may 
consider some or all of the following factors:
    (a) Size, number, and frequency. The size, number, and frequency of 
the activity or activities, transaction(s), or financial service(s) 
conducted or performed over a period of time, including whether the 
activity or activities, transaction(s), or financial service(s) are 
increasing or decreasing over time and the rate of increase or 
decrease.
    (b) Nature. The nature of the activity or activities, 
transaction(s), or financial service(s), including the type, 
complexity, and commercial purpose of the activity or activities, 
transaction(s), or financial service(s).
    (c) Level of awareness; pattern of conduct. (1) Whether the 
activity or activities, transaction(s), or financial service(s) are 
performed with the involvement or approval of management or only by 
clerical personnel; and
    (2) Whether the activity or activities, transaction(s), or 
financial service(s) are part of a pattern of conduct or the result of 
a business development strategy.
    (d) Nexus. The proximity between the foreign financial institution 
engaging in the activity or activities, transaction(s), or financial 
service(s) and North Korea or a person blocked pursuant to Sec.  
510.201, a person sanctioned pursuant to Sec.  510.210, or trade with 
North Korea.
    (e) Impact. The impact of the activity or activities, 
transaction(s), or financial service(s) on the relevant U.S. sanctions 
program objectives including:
    (1) The economic or other benefit conferred or attempted to be 
conferred on North Korea or a person blocked pursuant to Sec.  510.201, 
or sanctioned pursuant to Sec.  510.210; and
    (2) Whether and how the activity or activities, transaction(s), or 
financial service(s) contribute(s) to North Korea's nuclear and 
ballistic missile programs, commission of serious human rights abuses, 
use of funds generated through international trade to support its 
nuclear and missile programs and weapons proliferation, money 
laundering and other illicit activities, procurement of luxury goods, 
human rights violations, and violations of United Nations Security 
Council Resolutions.
    (f) Deceptive practices. Whether the activity or activities, 
transaction(s), or financial service(s) involve(s) an attempt to 
obscure or conceal the actual parties or true nature of the activity or 
activities, transaction(s), or financial service(s) or to evade 
sanctions.
    (g) Other relevant factors. Such other factors that the Department 
of the Treasury deems relevant on a case-by-case basis in determining 
the significance of an activity or activities, transaction(s), or 
financial service(s).

Subpart H--Procedures

0
11. Revise Sec.  510.802 to read as follows:


Sec.  510.802  Delegation of certain authorities of the Secretary of 
the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13466 of June 26, 2008, Executive Order 
13551 of August 30, 2010, Executive Order 13570 of April 18, 2011, 
Executive Order 13687 of January 2, 2015, Executive Order 13722 of 
March 15, 2016, Executive Order 13810 of September 20, 2017, and any 
further Executive orders relating to the national emergency declared in 
Executive Order 13466 of June 26, 2008, and any action that the 
Secretary of the Treasury is authorized to take pursuant to 
Presidential Memorandum of May 18, 2016: Delegation of Certain 
Functions and Authorities under the North Korea Policy Enhancement Act 
of 2016, Presidential Memorandum of September 29, 2017: Delegation of 
Certain Functions and Authorities under the Countering America's 
Adversaries Through Sanctions Act of 2017, the Ukraine Freedom Support 
Act of 2014, and the Support for the Sovereignty, Integrity, Democracy, 
and Economic Stability of Ukraine Act of 2014, and Presidential 
Memorandum of February 21, 2020: Delegation of Certain Functions and 
Authorities under the

[[Page 20163]]

National Defense Authorization Act for Fiscal Year 2020, may be taken 
by the Director of OFAC or by any other person to whom the Secretary of 
the Treasury has delegated authority so to act.

    Dated: April 6, 2020.
Andrea Gacki,
Director, Office of Foreign Assets Control.
[FR Doc. 2020-07497 Filed 4-9-20; 8:45 am]
 BILLING CODE 4810-AL-P