North Korean Trade Sanctions

Is it possible that we could eventually see a time when free and fair trade can be established with North Korea? Possibly…

On June 26, 2008, President Bush made an announcement that he will lift certain key trade sanctions against North Korea, as well as remove that country from the list of state sponsors of terrorism. These actions are in response to cooperation by the North Korean government in the disarmament of its highly controversial nuclear weapons program.

The key trade sanctions that have been lifted are those put forth through the issuance of Presidential Proclamation 2914 signed December 16, 1950, by then President Truman. This proclamation expanded the Trading with the Enemy Act of 1917 to include North Korea.

Although the trade sanctions implored by the Trading with the Enemy Act of 1917 have been lifted, there are still many barriers to trade with North Korea that will remain in effect by authority granted to the President under the International Emergency Economic Powers Act (IEEPA), the National Emergencies Act (NEA), and Section 301, Title 3, United States Code.

Over the years the trade sanctions and regulations associated with those sanctions that have been imposed on North Korea have dramatically changed from stringent to relatively relaxed depending upon the actions taken by the North Korean government with regard to issues of national security interest to the United States.

Please do not mistake the lifting of the sanctions implemented by the Trading with the Enemy Act of 1917 as a sign that anything and everything can be exported or re-exported to North Korea.

So, if some trade sanctions have been lifted but free and fair trade is still not a reality, what may be exported to North Korea?

Currently, licenses are required to export or re-export virtually all U.S. origin goods except for food and medicine. The U.S. government may approve a license for non-food and non-medical humanitarian items provided those items are intended for the benefit of the North Korean people. Additionally, certain agricultural commodities and medical devices may be granted licenses provided the items do not qualify as luxury goods, which are prohibited exports or re-exports to North Korea.

When conducting business internationally, please do not make the assumption that trade relations with the North Korean government have normalized with the recent announcement by President Bush; the consequence could be quite disastrous.