Financial Crime World

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Compliance Procedures for Financial Institutions in North Korea Take Center Stage

In a move aimed at bolstering international efforts to combat nuclear proliferation, the UK government has updated its sanctions list to include new measures targeting North Korea. The update, effective as of November 11, 2022, underscores the need for financial institutions in the Democratic People’s Republic of Korea (DPRK) to adhere to strict compliance procedures.

What Does This Mean for Financial Institutions?

Under the updated sanctions regime, financial institutions are required to check whether they maintain any accounts or hold funds on behalf of individuals or entities listed on the UK Sanctions List. Any such accounts must be frozen immediately, and institutions must refrain from making these funds available to designated persons unless licensed by the Office of Financial Sanctions Implementation (OFSI).

  • Key points for financial institutions:
    • Check for any accounts or held funds related to designated individuals or entities
    • Freeze any found accounts immediately
    • Refrain from making funds available to designated persons unless licensed

Failed Compliance Can Have Severe Consequences

Failure to comply with financial sanctions legislation or attempting to circumvent its provisions is a criminal offense in the UK. The Office of Financial Sanctions Implementation has emphasized that institutions must report any findings related to frozen assets and provide additional information as requested.

  • Penalties for non-compliance:
    • Failure to comply is a criminal offense
    • Institutions may face severe consequences, including fines and reputational damage

Where to Find More Information

For more details on the updated sanctions regime, institutions can refer to the following resources:

  • Democratic People’s Republic of Korea financial sanctions page on Gov.UK website
  • Relevant UN Sanctions Committee webpage
  • Consolidated List and UK Sanctions List available online

Contacting the Office of Financial Sanctions Implementation

Non-media inquiries about the implementation of financial sanctions in the UK should be directed to the Office of Financial Sanctions Implementation at HM Treasury, while media inquiries can be addressed to the Treasury Press Office.