Act, 50 U.S.C. § 3091 et seq., and ad-
mission of an alien necessary for the
U.S. to comply with obligations to
the U.N. are exempt from Title II. 22.
U.S.C. § 9530. In addition, Title II does
not apply to activities of the National
Aeronautics and Space Administra-
tion (“NASA”). Id. § 9531.
4. Presidential Waiver and Termi-
nation
Requirements for waiver unique
to certain sections of Title II are
set forth above in the discussion of
each section. In addition, subject to
congressional review required by §
9511, the President may waive any
sanction the President has imposed
under Title II if the President deter-
mines such a waiver is in the national
security interest of the U.S. § 9530(b).
B. Title III - Korean Interdiction
and Modernization of Sanctions
Act
Title III targets North Korea by (1)
barring US financial institutions from
opening or maintaining accounts
used by foreign financial institutions
to provide indirect financial services
to North Korea, § 9221a; (2) direct-
ing the President to withhold assis-
tance under the Foreign Assistance
Act of 1961, 22 U.S.C. § 2151, et seq.
from any country receiving from or
providing to North Korea any defense
article or service, § 9223; (3) banning
goods produced in whole or part by
North Korean laborers, §§ 9241(b)
(3), 9241a, 9241b; and (4) requiring
sanctions against any foreign person
who knowingly employs North Kore-
an laborers, id 4 . Presidential waiver
of sanctions requires only submis-
sion of a written determination from
the President to Congress. Id. § 9228.
Waivers are renewable for periods
of between 30 days and 1 year. Id.
Suspension and termination are also
available upon the President’s certifi-
cation to the appropriate congressio-
nal committee in compliance with §§
9251 and 9252.
III. PENALTY FOR VIOLATION OR
ATTEMPTED VIOLATION
Penalties for violating or attempting
to violate CAATSA sanctions are pro-
vided for by IEEPA, 50 U.S.C. § 1701
et seq. Where possible, these include
civil penalties of $250,000 or twice
the transaction amount, and criminal
penalties up to a $1 million fine and/
or 20 years imprisonment. 50 U.S.C.
§ 1705.
IV. AVOIDING SECONDARY CAATSA
SANCTIONS
Identifying conduct directly sanc-
tionable under CAATSA is relative-
ly straightforward. These “primary
sanctions” are explicitly set forth
by CAATSA. However, compliance is
complicated by CAATSA’s require-
ment that the President to impose
sanctions against individuals and
entities both in the U.S. and abroad,
even when it seems conduct has
nothing to do with the U.S. Such in-
stances are often referred to as “sec-
ondary sanctions.” 5 These sanctions
are aimed at quelling even indirect
support for the targeted regimes. Id.
This makes risk assessment difficult
because the presence of sanctionable
activity may not be readily apparent.
Id.
Individuals and entities alike are re-
sponsible for ensuring that they do
not engage in dealings that could
result in sanctions. Id. Further, they
must avoid assisting others who are
already designated for sanctions,
lest they will be sanctioned them-
selves. Id. Therefore, development of
a compliance program that includes
a sanctions list screening and other
measures, depending on the unique
requirements of each business, is
strongly encouraged.
The Office of Foreign Assets Control
(“OFAC”), in essence, wants individu-
als and entities in industries subject
to CAATSA to ensure they are not do-
ing business in such a way that would
(1) assist or support others in evad-
ing sanctions or (2) supply resourc-
es – i.e. products and services – that
would aid others in evading sanc-
tions. Id. In the financial industry,
this means foreign banks that do not
comply with CAATSA can be blocked
from any transactions using the U.S.
dollar, which is probably a death sen-
tence for most banks. Id.
Considerations in assessing risk should include, for example, whether an individual or entity is:
1. Transacting business in the U.S.;
2
2. Transacting business in Iran,
North Korea, or Russia; those listed as an SDN or appearing
on other OFAC restricted party lists,
or a company owned 50% or more
by such parties;
3. Engaging in transactions with 4. Using the U.S. dollar or financial
system; and
5. Engaging in transactions that
could be viewed as “significant” or
as supportive to sanctioned par-
ties. Id.
There is a presumption that anything produced by any North Korean citizen or national anywhere in the world is a result of forced labor. Id. This presumption can be rebutted only if the
Commissioner of Customs and Border Protection finds by clear and convincing evidence that the goods were not produced by convict, forced, or indentured labor. Id.
3
“U.S. Sanctions Laws: Dangers Ahead For Foreign Companies (Part II), https://www.jdsupra.com/legalnews/u-s-sanctions-laws-dangers-ahead-for-18252/ last accessed on June 11, 2019
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