Financial Crime World

Money Laundering Techniques in North Korea Revealed: EU Imposes Sanctions

European Union Updates Sanctions Against North Korea’s Military Programmes

March 11, 2024 - The European Union has updated its list of sanctions against North Korea, revealing several money laundering techniques used by the country’s military programmes.

Background

The sanctions were made under the Sanctions and Anti-Money Laundering Act 2018 and provide for the freezing of funds and economic resources of certain individuals, entities, or bodies involved in North Korea’s military activities. The amendment also includes additional information on the Ministry of the People’s Armed Forces (MPAF), which manages the general administrative and logistical needs of the Korean People’s Army.

Designated Entity: MPAF

The MPAF has been listed as a designated entity subject to an asset freeze since December 2017, with the latest update being made in March 2024. The ministry is responsible for managing the financial and economic resources of the military programmes, which includes providing financial services and making funds available for the benefit of designated persons.

Compliance Requirements

Financial institutions and other persons are required to check whether they maintain any accounts or hold funds or economic resources for designated individuals and freeze such accounts if necessary. Failure to comply with financial sanctions legislation is a criminal offence.

Consolidated List Update

The EU has also updated its Consolidated List, which provides details of those designated under sanctions legislation. Further information on the UN measures in respect of North Korea can be found on the relevant UN Sanctions Committee webpage.

UN Security Council Updates Sanctions List

In related news, the United Nations Security Council updated the Democratic People’s Republic of Korea Sanctions List earlier this month. The list includes several entities and individuals involved in North Korea’s military programmes.

Aims of the Sanctions Regime

The sanctions regime against North Korea aims to prevent the country from using its funds for military purposes. However, money laundering techniques used by the country continue to pose a significant threat to global financial stability.

Bullet Points:

  • The European Union has updated its list of sanctions against North Korea’s military programmes.
  • The MPAF is responsible for managing the financial and economic resources of the military programmes.
  • Financial institutions and other persons are required to freeze accounts if they hold funds or economic resources for designated individuals.
  • Failure to comply with financial sanctions legislation is a criminal offence.
  • The EU has updated its Consolidated List, which provides details of those designated under sanctions legislation.