Update on the Continuing Illicit Finance Threat Emanating from North Korea (FinCEN Advisory – FIN-2013-A005)

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Advisory
FIN-2013-A005
Issued: July 1, 2013
Subject: Update on the Continuing Illicit Finance Threat Emanating from North Korea The Financial Crimes Enforcement Network (“FinCEN”) is issuing this Advisory to supplement information previously provided on the serious threat of money laundering, terrorism finance, and proliferation finance emanating from the Democratic People’s Republic of Korea (“North Korea” or “DPRK”),1 and to provide guidance to financial institutions regarding United Nations Security Council Resolution (“UNSCR”) 2087, adopted on January 22, 2013, and UNSCR 2094, adopted on March 7, 2013. Existing U.S. sanctions – in particular, those under the North Korea Sanctions Regulations2 and Executive Orders 133823 and 135514 – create a legal framework that limits U.S. financial institutions’ direct exposure to the types of North Korean financial or commercial transactions relating to the concerns that are the focus of UNSCRs 2087 and 2094, as well as UNSCRs focused on North Korea. This Advisory, while it does not describe any new legal obligations upon U.S. persons, reinforces FinCEN’s advice that all U.S. financial institutions should take commensurate risk-mitigation measures to diminish threats emanating from North Korea. In doing so, financial institutions should consider North Korea’s record of illicit and deceptive activity. This deceptive activity encompasses a wide range of conduct, including currency counterfeiting, drug trafficking, and the laundering of related proceeds, that increases the risk that financial institutions will unwittingly become involved in North Korea’s illicit activities. FinCEN has previously noted such conduct and deceptive practices used by North Korea, most recently in 2009.5 In addition, since February 2011, the Financial Action Task Force (“FATF”) has repeatedly, including as recently as June 2013, called upon its members and urged all