Office of Foreign Assets Control, U.S. Department of the Treasury NORTH KOREA: WHAT YOU NEED TO KNOW ABOUT THE U.S. EMBARGO An overview of the Foreign Assets Control Regulations as they relate to North Korea--Title 31 Part 500 of the U.S. Code of Federal Regulations o INTRODUCTION - The Foreign Assets Control Regulations, authorized under the Trading with the Enemy Act, established economic sanctions against the Democratic People's Republic of Korea ("North Korea") in 1950. Although recently modified as a result of commitments made to begin normalization of relations, the Regulations are still in force and affect all U.S. citizens and permanent residents wherever they are located, all people and organizations physically in the United States, and all branches, subsidiaries and controlled affiliates of U.S. organizations throughout the world. They are administered by the U.S. Treasury Department's Office of Foreign Assets Control. Penalties for violating the sanctions range up to 10 years in prison, $1,000,000 in corporate fines, and $250,000 in individual fines. This fact sheet is a broad summary of the Regulations for all individuals intending to travel to or otherwise deal with North Korea. o SELLING TO NORTH KOREA - Except for information and informational materials, such as books, magazines, films, compact disks, CD ROMs, artworks, news wire feeds and recordings. U.S. products, technology or services generally may not be exported to North Korea, either directly or through third countries, unless licensed by the Bureau of Export Administration of the U.S. Department of Commerce. This prohibition includes dealing in or assisting the sale of goods or commodities to or from North Korea, since such brokering is considered to be the export of a service. Exports of commercially-supplied goods to meet basic human needs may be authorized under individual validated licenses by the U.S. Commerce Department on a case-by-case basis. Licenses are also granted to U.S. persons by the U.S. Treasury Department to enable them to participate in transactions that further North Korea's transition to light-water reactor ("LWR") power plants. Such projects include LWR power plant design, site preparation, excavation, delivery of essential nonnuclear components (including turbines and generators), building construction, the disposition of spent nuclear fuel and the provision of heavy oil for heating and electricity generation pending completion of the first LWR unit. For information regarding licensing criteria, please contact the Licensing Division of the Office of Foreign Assets Control at 202/622-2480. o BUYING FROM NORTH KOREA - Goods or services of North Korean origin generally may not be imported into the United States either directly or through third countries, without authorization from the Office of Foreign Assets Control. The only exceptions are non-commercial quantities of North Korean merchandise up to $100 in value, which may be brought into the United States for strictly personal use as accompanied baggage by a person traveling to North Korea and informational materials, which may be imported without limitation. Receipts should be kept to document any goods purchased in North Korea and those receipts should be made available to U.S. Customs when entry is made into the United States. Specific licenses may be issued by the Office of Foreign Assets Control to allow the importation into the United States of North Korean-origin Magnesite or magnesia. For further information regarding licensing criteria, please contact the Licensing Division of the Office of Foreign Assets Control at 202/622-2480. o SPECIALLY DESIGNATED NATIONALS - The Regulations prohibit buying from or selling to North Korean nationals whether they are physically located in North Korea or doing business elsewhere. Individuals or organizations who act for or on behalf of North Korea anywhere in the world are considered by the U.S. Treasury Department to be "Specially Designated Nationals" of North Korea. Their names are published in the Federal Register, an official publication of the U.S. Government. A listing of such Specially Designated Nationals may be obtained by calling the Office of Foreign Assets Control at 202/622-2420. The listing, however, is a partial one and any U.S. individual or organization engaging in transactions with foreign nationals must take reasonable care to make certain that such foreign nationals are not acting for or on behalf of North Korea. Specially Designated Nationals of North Korea operating in the United States are subject to criminal prosecution and U.S. individuals or organizations who violate the Regulations by transacting business with them are also subject to criminal prosecution. o SENDING GIFTS - Gift parcels may only be shipped or carried to an individual, or to a religious, charitable, or educational organization in North Korea for the use of the recipient or of the recipient's immediate family, subject to the following limitations: the combined total domestic retail value of all the items in the parcel must not exceed $400; not more than one parcel may be sent or given by the same person in the U.S. to the same recipient in North Korea in any month; and only items normally sent as gifts, such as food, clothing, toilet articles, or medicine, may be included in the gift parcel. Gold coins and gold bullion are not eligible for gift parcel treatment. Organizations that consolidate and send multiple gift parcels in single shipments must obtain a validated license from the U.S. Department of Commerce. Each gift parcel must meet commodity, dollar-value, and frequency limitations. If a parcel being shipped or carried to North Korea fails to meet these standards, the parcel, and any parcel in a consolidated shipment with it, are subject to seizure by the U.S. Government. o TRAVELING TO NORTH KOREA - U.S. passports are valid for travel to North Korea and individuals do not need U.S. Government permission to travel there. All transactions ordinarily incident to travel to, from and within North Korea and to maintenance within North Korea are authorized. U.S. travel service providers are authorized to organize group travel to North Korea, including transactions with North Korean carriers. However, individuals may only spend money in North Korea to purchase items related to travel, such as hotel accommodations, meals, and goods for personal consumption by the traveler in North Korea. There is no longer any per diem restriction on these expenses, and the use of credit cards for these transactions is also authorized. A traveler returning from North Korea may bring back into the United States as accompanied baggage $100 worth of merchandise in non-commercial quantities, as well as informational materials without limitation. Because the sanctions program prohibits business dealings with North Korea unless licensed by the U.S. Treasury Department, purchases of other goods or services unrelated to travel are prohibited. At the present time, individuals who wish to travel to North Korea must obtain North Korean entry visas in third countries. Travelers should consult the U.S. State Department for any special travel advisories. o ACCOUNTS AND ASSETS - As a general rule, no U.S. person may have any dealings in North Korean assets, either governmental or private; nor may they have any financial dealings with North Korea, except for financial transactions incident to authorized activities, such as travel-related transactions and licensed trade. All property of North Korea, of North Korean nationals, and of Specially Designated Nationals of North Korea controlled by or in the possession of persons subject to U.S. jurisdiction is "blocked." U.S. financial institutions may now rely on originators or beneficiaries of funds transfers with regard to compliance with the sanctions against North Korea and are authorized by general license to process the post-February 14, 1995 transfer of funds in which North Korea or a national thereof has an interest. Persons subject to U.S. jurisdiction who are originators or ultimate beneficiaries of such funds transfers, however, including U.S. banking institutions that are themselves originators or beneficiaries, may not initiate or receive such transfers if the underlying transactions to which they relate are prohibited. Specific licenses may be issued on a case-by-case basis to authorize the unblocking of funds that were blocked by financial institutions pursuant to this part because of an interest of North Korea or a national thereof, that came into the financial institution's possession or control by wire transfer or check remittance prior to the effective date of the general license authorizing such activity. Such licenses will only authorize the return of funds to remitting parties, provided that no funds are released to the Government of North Korea, to any entity controlled by the Government of North Korea, to any person located in or controlled from North Korea, or to any entity organized under the laws of North Korea. o ESTATES AND INSURANCE POLICIES - An estate is blocked whenever a North Korean resident is an heir or is the deceased; money from a life insurance policy is blocked whenever the deceased or the beneficiary is a North Korean resident. It is possible for the heir of a person who died in North Korea, or the beneficiary of a life insurance policy of a person who died in North Korea, to apply for a license from the U.S. Treasury Department to unblock the estate or the insurance proceeds, provided the heir or beneficiary is not a North Korean national. Persons administering or interested in blocked estates or life insurance proceeds should contact the Licensing Division of the Office of Foreign Assets Control at 202/622-2480 to obtain further information concerning procedures for requesting a Treasury license. The Treasury Department's Office of Foreign Assets Control also administers sanctions programs involving Iraq, Libya, the Federal Republic of Yugoslavia (Serbia and Montenegro), Cuba, the National Union for the Total Independence of Angola (UNITA), Iran, and Terrorists who threaten to disrupt the Middle East peace process. It has certain residual authority with regard to sanctions against Cambodia. For additional information about these programs or about the North Korean sanctions program, please contact the: OFFICE OF FOREIGN ASSETS CONTROL U.S. Department of the Treasury Washington, D.C. 20220 202/622-2520 (02-24-95) .