Trump issues new sanctions on North Korea, targeting shipping and banking

U.S. President Donald Trump today increased pressure on North Korea by announcing a new Executive Order (E.O.).

In the latest E.O. Trump is targeting trade and financial institutions of North Korea, and forms as additional sanctions with respect to the country.

This comes on the back of President Trump’s incendiary remarks on Kim Jung Un at the recently concluded United Nations General Assembly meeting at New York last week.

The E.O. authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to impose sanctions on persons involved in:

• Industries: The construction, energy, financial services, fishing, information technology, manufacturing, medical, mining, textiles, or transportation industries in North Korea
• Ports: Ownership, control, or operation of any port in North Korea, including any seaport, airport, or land port of entry
• Imports/Exports: at least one significant importation from or exportation to North Korea of any goods, services, or technology

These new authorities target individuals and entities that engage in trade with North Korea as well as the financial institutions that facilitate this trade, including directly targeting North Korea’s shipping and trade networks and issues a 180-day ban on vessels and aircraft that have visited North Korea from visiting the United States.

North Korea is dependent on its shipping networks to facilitate international trade. A sanction targeting the shipping routes would have a material impact into their already small trade networks, and would render their maritime industry to almost non-existent.

However, where the financial aspect of the E.O. is striking, it is unclear how impactful it would be, considering that the North’s banking system is already small to begin with. Any strike on this front would prove to be bearing little to no impact, significant enough to trouble the North.

The E.O. provides the authority to impose sanctions on any foreign financial institution that knowingly conducts or facilitates any significant transaction on behalf of certain designated individuals and entities.

The E.O. also provides the Secretary of the Treasury additional authority to block any funds originating from, destined for, or passing through accounts linked to North Korea that come within the United States or possession of a U.S. person.

Foreign financial institutions must choose between doing business with the United States or facilitating trade with North Korea or its designated supporters.

In a press release issued by the U.S. State Department, the reason why the country is doing this is because “The United States is committed to targeting all means used by North Korea to earn, access, and transfer funds that North Korea uses to further its WMD programs”.