Citation, commencement, interpretation and extent

1.-(1) This Order may be cited as the Democratic People's Republic of Korea (Sanctions) (Overseas Territories) (Amendment) (No. 2) Order 2016 and comes into force on 10th August 2016.

(2) In this Order, "the principal Order" means the Democratic People's Republic of Korea (Sanctions) (Overseas Territories) Order 2012(4).

(3) This Order extends to the territories listed in Schedule 1 to the principal Order.

Amendment of the principal Order

2.  The principal Order is amended in accordance with articles 3 to 17.

3.  In article 3(1)-

(a)in the appropriate places, insert-

""investment services" means-

""payee" means a person that is the intended recipient of transferred funds;",

""payer" means a person-

""payment service provider" means a person providing transfer of funds services;", and

""petroleum products" means items listed in Annex If to the Council Regulation;"; and

(b)for "financing and financial assistance" (in both places) substitute "financing or financial assistance".

4.  In the heading to article 7, for "and gold and ores" substitute "gold and ores, and petroleum products".

5.  In article 7, for paragraphs (3) to (5), substitute-

"(3) It is an offence for a person to knowingly obtain from North Korea-

(a)coal, iron and iron ore;

(b)gold and ores;

(c)luxury goods; or

(d)petroleum products,

regardless of whether the goods originated in North Korea.

(3A) Paragraphs (2) and (3) in relation to luxury goods do not apply to-

(a)personal effects of a person travelling to or from North Korea;

(b)goods of a non-commercial nature for personal use contained in the luggage of a person travelling to or from North Korea;

(c)goods necessary for the official purposes of diplomatic or consular missions in North Korea or the personal effects of their staff; or

(d)goods necessary for the official purposes of international organisations enjoying immunities in North Korea in accordance with international law or the personal effects of their staff.

(4) It is an offence for a relevant person to knowingly use a ship, aircraft or vehicle falling within paragraph (7) for the carriage of restricted goods, luxury goods or aviation fuel if the carriage is, or forms part of, carriage from any place outside North Korea to any destination in North Korea.

(5) It is an offence for a relevant person to knowingly use a ship, aircraft or vehicle falling within paragraph (7) for the carriage of restricted goods, coal, iron and iron ore, or gold and ores, if the carriage is, or forms part of, carriage from any place in North Korea to any destination outside North Korea.".

6.  In article 10(1) for "article 7(3) or (5)" substitute "article 7(4) or (5)".

7.  For article 10G, substitute-

"10G.-(1) A credit or financial institution ("P") commits an offence if P provides financing or financial assistance for trade which P knows or has reasonable cause to suspect may contribute to-

(a)the nuclear-related, other weapons of mass destruction-related, or ballistic missile-related programmes of North Korea; or

(b)an activity prohibited under this Order.

(2) Paragraph (1) does not apply if-

(a)the contract or agreement to provide financing or financial assistance was concluded prior to 10th August 2016; or

(b)the trade is in food, agricultural or medical equipment, or is for humanitarian purposes.".

8.  For article 10J, substitute-

"10J.-(1) It is an offence for a person ("P") to provide access to ports in the Territory to any vessel that P knows or has reasonable cause to suspect-

(a)is owned or operated by North Korea;

(b)is owned or controlled directly or indirectly by a person listed in Annex IV to the Council Regulation;

(c)contains restricted goods, luxury goods, aviation fuel, gold and ores, coal, iron and iron ore, petroleum products or any other goods prohibited under this Order;

(d)has refused to be inspected for carriage of goods prohibited by this Order after such inspection has been authorised by the vessel's flag State; or

(e)is without nationality and has refused to be inspected for carriage of goods prohibited by this Order.

(2) Paragraph (1) does not apply if-

(a)access to a port is needed by the vessel in a case of emergency;

(b)the vessel is coming into port for inspection; or

(c)the vessel is returning to its port of origin.

(3) This article is subject to articles 11 and 12.".

9.  After article 10K, insert-

"Investment in commercial activity

10L.-(1) A person ("P") commits an offence if P accepts or approves investment in any commercial activity knowing or having reasonable cause to suspect that such investment is made by-

(a)a person falling within paragraph (2);

(b)a person acting on behalf, or at the direction of, a person falling within paragraph (2); or

(c)a legal person owned or controlled by a person falling within paragraph (2).

(2) The following persons fall within this paragraph-

(a)the Government of North Korea, its public bodies, corporations and agencies;

(b)the Worker's Party of Korea;

(c)a North Korean national; or

(d)a person incorporated or constituted under the law of North Korea.

Joint ventures and ownership interests

10M.-(1) A person ("P") commits an offence if P-

(a)establishes a joint venture with; or

(b)takes or extends an ownership interest in, including by acquisition in full or the acquisition of shares and other securities,

a person referred to in paragraph (2), knowing or having reasonable cause to suspect that the joint venture or ownership interest is with or in such a person.

(2) Persons falling within this paragraph are persons referred to in article 10L(1)(a), (b) or (c) that are engaged in-

(a)North Korea's nuclear-related, ballistic missile-related or other weapons of mass destruction-related activities or programmes; or

(b)activities in the sectors of mining, refining and chemical industries.

Financing or financial assistance to North Korean persons

10N.  A person ("P") commits an offence if P grants financing or financial assistance knowing or having reasonable cause to suspect that it is granted to-

(a)a person incorporated or constituted under the law of North Korea; or

(b)a person acting on behalf or at the direction of, or a legal person owned or controlled by, a person referred to in sub-paragraph (a).

Provision of investment services

10O.  A person ("P") commits an offence if P provides investment services knowing or having reasonable cause to suspect that such investment services are directly related to an activity prohibited under article 10M or 10N.

Transfers of funds to and from North Korea

10P.-(1) A person ("P") commits an offence if P transfers funds knowing or having reasonable cause to suspect that the transfer is to or from North Korea.

(2) A credit or financial institution ("P") commits an offence if P enters into or continues to participate in any transaction, knowing or having reasonable cause to suspect that the transaction is with-

(a)a credit or financial institution domiciled in North Korea;

(b)a branch or subsidiary of a credit or financial institution domiciled in North Korea, regardless of the location of such branch or subsidiary; or

(c)a credit or financial institution listed in Annex VI to the Council Regulation.

(3) Paragraphs (1) and (2) do not apply if-

(a)the transaction falls within paragraph (5) and involves a transfer of funds equal to or below EUR15,000 or equivalent; or

(b)the transaction is necessary for the official purposes of a diplomatic or consular mission or an international organisation enjoying immunities in North Korea in accordance with international law.

(4) In determining the value of a transfer of funds for the purpose of paragraph (3)(a), where the transfer is executed in one or more operations which appear to be linked, the total value shall be the sum of the value of all linked transfers.

(5) A transaction falls within this paragraph if it concerns-

(a)foodstuffs, healthcare, or medical equipment, or is for agricultural or humanitarian purposes;

(b)personal remittances;

(c)the carrying out of acts permitted under this Order;

(d)a specific trade contract not prohibited by this Order;

(e)official purposes of a diplomatic or consular mission or an international organisation enjoying immunities in accordance with international law; or

(f)implementation of projects funded by the European Union or its Member States for development purposes directly addressing the needs of the civilian population or the promotion of denuclearisation.

(6) This article is subject to articles 11 and 12.".

10.  In article 11-

(a)in paragraph (1), for "or 10K(1)" substitute ", 10J, 10K(1) or 10P";

(b)in paragraph (2), for " or 10K(1)" substitute ", 10J, 10K(1) or 10P"; and

(c)in paragraph (3)-

(i)for sub-paragraph (f), substitute-

"(f)satisfaction of a judicial, administrative or arbitral decision or judgment rendered before the designated person was so designated, provided it is not for the benefit of a designated person;", and

(ii)substitute a semi-colon for the full-stop at the end of sub-paragraph (m) and after that sub-paragraph insert-

"(n)payment by a designated person due under a contract, agreement or obligation that was concluded or arose before the designated person was so designated provided that the Governor has determined-

(i)the contract is not related to any item, operation, service or transaction referred to in article 7(1), (3) or (5) as regards restricted goods, article 8 or article 9, and

(ii)the payment is not directly or indirectly for the benefit of a person listed in Annex V to the Council Regulation;

(o)access to ports for humanitarian or other purposes consistent with the objectives of United Nations Security Council resolution 2270 (2016) of 2nd March 2016;

(p)payment or a transaction of a similar nature to satisfy a claim against North Korea, its nationals or persons incorporated under the law of North Korea, provided that the Governor has determined that the payment or transaction does not contribute to activities prohibited by this Order;

(q)a transaction in excess of EUR15,000 or equivalent, provided that the Governor is satisfied that the transaction falls within article 10P(5);

(r)a transaction in respect of luxury goods referred to in point 17 of Annex III to the Council Regulation, provided that the Governor has determined that the goods are for humanitarian purposes;

(s)sale, supply, transfer or export of restricted goods, provided that the Governor has determined that the goods are for food, agricultural, medical or other humanitarian purposes; and

(t)assistance in respect of restricted goods, provided that the Governor has determined that the goods are for food, agricultural, medical or other humanitarian purposes.".

11.  In article 12, for "or 10K(1)" substitute ", 10J, 10K(1) and 10P".

12.  After article 12, insert-

"Claims for indemnity or under contract

12A.-(1) No claim in connection with any contract or transaction, the performance of which has been affected, directly or indirectly, in whole or in part, by this Order shall be enforced if it is made by-

(a)a person listed in Annex IV or V to the Council Regulation;

(b)a person incorporated or constituted under the law of North Korea;

(c)the Government of North Korea, its public bodies, corporations and agencies;

(d)a person acting on behalf of a designated person; or

(e)a person acting on behalf of or at the direction of a person falling within sub-paragraph (a), (b), (c) or (d).

(2) Paragraph (1) applies in particular to any claim for indemnity or any other claim of this type, such as a claim for compensation or a claim under guarantee (including a financial guarantee or indemnity).

(3) In any proceedings for the enforcement of such a claim, the burden of proof that the claim is not prohibited is on the person seeking to enforce that claim.".

13.  For article 13 substitute-

"Requirement to publish list of designated persons, restricted goods, luxury goods, aviation fuel, coal, iron and iron ore, gold and ores, and petroleum products

13.-(1) The Governor must-

(a)publish a list of-

(i)designated persons,

(ii)restricted goods,

(iii)luxury goods,

(iv)aviation fuel,

(v)coal, iron and iron ore,

(vi)gold and ores, and

(vii)petroleum products; and

(b)keep the list up to date.

(2) The Governor may publish a list under paragraph (1) in any form the Governor considers appropriate, including by means of a website.".

14.  In article 16(a), for "to 10K" substitute "to 10P".

15.  In article 17(2), after "10K" insert ", 10L, 10M, 10N, 10O, 10P(1), 10P(2)".

16.  In Schedule 2-

(a)in the heading above paragraph 2, for "or aviation fuel" substitute ", aviation fuel or petroleum products"; and

(b)in paragraphs 2(1)(a) and (3) and 3(4) and (5), for "or aviation fuel" substitute ", aviation fuel or petroleum products".

17.  In Schedule 3, in paragraph 1(3) after "10K, " insert "10L, 10M, 10N, 10O, 10P(1), 10P(2),".

EXPLANATORY NOTE

(This note is not part of the Order)

This Order amends the Democratic People's Republic of Korea (Sanctions) (Overseas Territories) Order 2012 (S.I. 2012/3066), as amended.

This Order reflects and gives appropriate effect in specified Overseas Territories to additional sanctions measures adopted by the European Union in Council Decision (CFSP) 2016/849 and Council Regulation (EC) No 329/2007, most recently amended by Council Regulation (EU) 2016/841 of 27th May 2016. That Council Decision and Council Regulation (EU) 2016/841 also make minor changes to the implementation by the European Union of the sanctions recently adopted by the United Nations Security Council in resolution 2270 (2016). These UN sanctions were given effect in specified Overseas Territories in the Democratic People's Republic of Korea (Sanctions) (Overseas Territories) (Amendment) Order 2016 (S.I. 2016/630) and this Order gives effect to those minor changes.

In particular this Order provides for the imposition of additional financial sanctions measures, including those related to investment in commercial activity or joint ventures with, and financing and provision of investment services to, certain North Korean persons. It also prevents certain transactions with North Korean persons and transfers of funds to and from North Korea.

This Order also gives effect to a new sectoral prohibition relating to obtaining petroleum products.