The US Treasury has issued a new final rule (link here), further restricting North Korea’s access to the US financial system. The new rule, issued by the Treasury’s Financial Crimes Enforcement Network (FinCEN), prohibits US financial institutions from opening or maintaining correspondent accounts for North Korean banks, and requires US financial institutions to apply additional due diligence measures in order to block North Korean financial institutions from gaining access to US correspondent accounts.
The rule was proposed in June this year, together with the publication of the finding by the US Treasury that North Korea was a jurisdiction of primary money laundering concern. Although North Korea’s financial institutions do not maintain correspondent accounts with US financial institutions, the North Korean government allegedly continues to use state-controlled financial institutions and front companies to conduct illicit international financial transactions. The new rule is designed to support international sanctions against North Korea and provide greater protection for the US financial system.