Australia expands sanctions on North Korea

The Government has recently enacted the following legislative instruments that expand sanctions on North Korea:

If you think your current or future business or other activities may be affected by the new sanctions set out below, you should seek legal advice.  You can also use the Online Sanctions Administration System to submit an inquiry in relation to an activity, or to make a formal application for a sanctions permit.

Expansion of Australia's autonomous sanctions against the DPRK

On 28 February 2017, the Minister for Foreign Affairs announced a proposed expansion of Australia's autonomous sanctions against the DPRK, in response to the DPRK's reckless and dangerous nuclear and ballistic missile programs.  Following a public consultation process, the proposed measures have now been implemented by the Autonomous Sanctions Amendment (Democratic People's Republic of Korea) Regulations 2017 and the Autonomous Sanctions (Classes of Sanctioned Vessels – Democratic People's Republic of Korea) Designation 2017.  

This expansion builds on the tough measures Australia already had in place against the DPRK, and complements the strong measures adopted by the UN Security Council and the autonomous sanctions that have been put in place by partner countries. 

Prohibited services

From 5 August 2017, the provision of the following services are prohibited without a permit issued by the Minister for Foreign Affairs:

  • the provision of any service to the DPRK's national airline, Air Koryo;
  • the provision to any person or entity of any service that assists with, or is provided in relation to, an extractive or related industry in the DRPK;
  • the provision to any person or entity of any service that assists with, or is provided in relation to, the creation, construction, installation, development, maintenance or decommissioning of infrastructure associated with an extractive or related industry in the DPRK; and
  • the provision to a DPRK person or entity, a person or entity acting on behalf of (or at the direction of) a DPRK person or entity, or an entity owned or controlled by a DPRK person or entity, of any service that assists with, or is provided in relation to, an extractive or related industry outside the DPRK.

"Extractive or related industry" is defined as an industry engaged in any of the following: (a) extracting raw materials from the earth; (b) exploring or prospecting for raw materials to be extracted from the earth; (c) refining or processing raw materials extracted from the earth.

"DPRK person or entity" is defined to mean any of the following: the government of the DPRK; the Workers' Party of Korea; the Korean People's Army; a public body, corporation or agency of the DPRK; an entity formed or incorporated in the DPRK; an official of any of the aforementioned entities; or an individual who is in, or a resident of, the DPRK.

Prohibited commercial activities

From 5 August 2017, the following commercial activities are prohibited without a permit issued by the Minister for Foreign Affairs:

  • obtaining of any asset that is a tenement or permission (however described) in relation to an extractive or related industry in the DPRK or in relation to the creation, construction, installation, development, maintenance or decommissioning of infrastructure associated with an extractive or related industry in the DPRK;
  • using, dealing with or making available any asset for the purpose of obtaining any tenement or permission (however described) in relation to an extractive or related industry in the DPRK or in relation to the creation, construction, installation, development, maintenance or decommissioning of infrastructure associated with an extractive or related industry in the DPRK;
  • obtaining, directly or indirectly, any tenement or permission (however described) in relation to an extractive or related industry in the DPRK or in relation to the creation, construction, installation, development, maintenance or decommissioning of infrastructure associated with an extractive or related industry in the DPRK from a DPRK person or entity, a person or entity acting on behalf of (or at the direction of) a DPRK person or entity, or an entity owned or controlled by a DPRK person or entity;
  • selling or making available (otherwise than by sale) an interest in a commercial activity in an extractive or related industry in Australia to a DPRK person or entity, a person acting on behalf of (or at the direction of) a DPRK person or entity, or an entity owned or controlled by a DPRK person or entity;
  • acquiring or extending an interest in a person or entity mentioned in the table below;
  • establishing or participating in a joint venture, partnership or other business relationship with a person with a person or entity mentioned in the table below; and
  • granting a financial loan or credit to a person or entity mentioned in the table below.

Item

Person or entity

1

A person or entity, wherever located, that is engaged in an extractive or related industry in the DPRK.

2

A person or entity, wherever located, that is engaged in the creation, construction, installation, development, maintenance or decommissioning of infrastructure associated with an extractive or related industry in the DPRK.

3

A person or entity acting on behalf of, or at the direction of, a person or entity mentioned in item 1 or 2.

4

An entity owned or controlled by a person or entity mentioned in item 1 or 2.

5

A person or entity, wherever located, that:

  1. is engaged in an extractive or related industry outside the DPRK; and
  2. is any of the following:
    1. a DPRK person or entity;
    2. a person or entity acting on behalf of, or at the direction of, a DPRK person or entity;
    3. an entity owned or controlled by a DPRK person or entity.

Designation of the 'DPRK vessel class'

From 6 July 2017, all vessels in the 'DPRK vessel class' have been designated by the Minister for Foreign Affairs.  The relevant legislative instrument is the Autonomous Sanctions (Classes of Sanctioned Vessels – Democratic People's Republic of Korea) Designation 2017.  The Autonomous Sanctions (Sanctioned Vessels – Democratic People's Republic of Korea) Designation 2015, which designates 18 individual vessels, remains in effect. 

'DPRK vessel class' is defined to mean 'all vessels entitled to fly the flag of the DPRK or registered in the DPRK, or that are owned, operated or chartered by, or otherwise under the control or direction of, an entity or a person mentioned' in the following table:

Item

Entity or person

1

The government of the DPRK

2

The Workers' Party of Korea

3

The Korean People's Army

4

A public body, corporation or agency of the DPRK

5

An entity formed or incorporated in the DPRK

6

An official of an entity mentioned in item 1, 2, 3, 4 or 5

7

An individual who is in, or a resident of, or a citizen of, the DPRK

8

An entity or person acting on behalf of, or at the direction of, an entity or a person mentioned in item 1, 2, 3, 4, 5, 6 or 7

9

An entity owned or controlled by a person or entity mentioned in item 1, 2, 3, 4, 5, 6 or 7

Under the Autonomous Sanctions Regulations 2011, the Minister for Foreign Affairs has authority to direct any vessel within the DPRK vessel class to leave Australia (including by a particular route) or not enter a particular port or place (or any port or place) in Australia.

A person commits an offence if a direction has been given to a sanctioned vessel and the person engages in conduct that causes the sanctioned vessel to contravene the direction.

Additional grounds for designations and declarations

From 6 July 2017, the Minister for Foreign Affairs is additionally able to designate for targeted financial sanctions and/or declare for travel bans persons and entities:

  • that the Minister is satisfied has been associated with the DPRK's weapons of mass-destruction program or missiles program (previously the Minister had to be satisfied that the person or entity is associated with the DPRK's weapons of mass-destruction program or missiles program); and
  • that the Minister is satisfied is assisting, or has assisted, in the violation, or evasion, by the DPRK of certain United Nations Security Council Resolutions that relate to the DPRK and subsequent resolutions relevant to those resolutions.

Expansion of, and changes to, sanctions under the Charter of the United Nations (Sanctions – Democratic People's Republic of Korea) Regulations 2008

Additional prohibited activities

In accordance with UNSC resolution 2321, and from 5 August 2017, the following activities are prohibited:

  1. the export of new helicopters and new vessels to the DPRK (that are not arms or related materiel) without a permit;
  2. the import of copper, nickel, silver, zinc from the DPRK;
  3. the import of statues from the DPRK without a permit;
  4. the procurement of vessel and aircraft crewing services from the DPRK; and 
  5. engaging in scientific and technical cooperation involving persons or groups officially sponsored by the DPRK, or representing the DPRK (but not including medical exchanges) without a permit.

Changes in relation to the supply of aviation fuel

In accordance with UNSC resolutions 2270 and 2321, and from 6 July 2017, a person will not be found to make a sanctioned supply of aviation fuel under Regulation 6 of the Charter of the United Nations (Sanctions – Democratic People's Republic of Korea) Regulations 2008 merely because the person supplies, sells or transfers an amount of aviation fuel for: (1) a flight of a civil passenger aircraft flagged or registered in the DPRK, so long as the amount does not exceed the amount necessary for that flight (including a standard margin for safety); or (2) a flight to the DPRK of a civil passenger aircraft not flagged or registered in the DPRK, so long as the amount does not exceed the amount necessary for that flight and the subsequent flight out of the DPRK (including a standard margin for safety).

Changes in relation to coal, iron and iron ore imports

In accordance with UNSC resolution 2321, and from 5 August 2017, a permit for the procurement of coal, iron or iron ore must be in accordance with paragraph 29(b) of Resolution 2270, as amended by paragraph 26 of Resolution 2321.

Amongst other things, this change reflects the limit on exports of coal originating in the DPRK imposed by UNSC resolution 2321.

Changes in respect of certain activities in respect of vessels

In accordance with UNSC resolutions 2270 and 2321, and from 5 August 2017, Regulation 11D and Regulation 14H of the Charter of the United Nations (Sanctions – Democratic People's Republic of Korea) Regulations 2008 prohibit the following activities: (1) registering a vessel in the DPRK; (2) obtaining an authority that entitles a vessel to fly the flag of the DPRK; (3) providing a classification or certification service, or related service, in respect of a DPRK flagged or registered vessel; (4) leasing or operating a DPRK flagged or registered vessel; (5) insuring a DPRK flagged or registered vessel; (6) ownership of a DPRK flagged or registered vessel; or (7) insuring or reinsuring a vessel owned, controlled or operated by the DPRK or by a person or entity in, or a national of, the DPRK.

A permit may be available for the activities set out in (1) to (6) in the above paragraph if the Committee has approved the activity in advance. A permit may be available for the activity set out in (7) above if a determination referred to in paragraph 22 of UNSC resolution 2321 is in effect in relation to the vessel.

In accordance with UNSC resolutions 2270 and 2321, and from 6 July 2017, Regulation 11F and Regulation 11G of the Charter of the United Nations (Sanctions – Democratic People's Republic of Korea) Regulations 2008 provide that:

  • the Minister for Foreign Affairs must (unless inconsistent with Australia's obligations under international law) direct a vessel not to enter any port in Australia if the Minister has reasonable grounds to believe that: (1) the vessel is owned or controlled by a designated individual or entity designated by the UNSC or the Committee; or (2) the vessel contains cargo and the supply, sale, transfer or export of that cargo is prohibited by any United Nations Security Council Resolution regarding the DPRK unless: (1) the vessel needs to enter a port in Australia because of an emergency, to return to its port of origination, or for inspection; or (2) the vessel needs to enter a port in Australia for humanitarian purposes or for a purpose consistent with the objectives of UNSC resolution 2270 and the vessel's entry has been approved by the Committee in advance;
  • if the vessel is designated by the Committee for the purposes of paragraph 12(c) of UNSC resolution 2321, the Minister for Foreign Affairs must (unless inconsistent with Australia's obligations under international law) direct a vessel not to enter any port in Australia unless the vessel does so because of an emergency, or to return to its port of origination, or in accordance with a direction given by the Committee under paragraph 12(c) of UNSC resolution 2321; and
  • a person in command or charge of a vessel that is not the vessel's pilot commits an offence if such a direction is given and the vessel enters a port in Australia.

In accordance with UNSC resolution 2321, and from 6 July 2017, Regulation 14E of the Charter of the United Nations (Sanctions – Democratic People's Republic of Korea) Regulations 2008 provides that the Minister may only grant a permit if the Committee has approved the proposed service in advance.

Changes in respect of public or private financial support for the purposes of trade with the DPRK

In accordance with UNSC resolution 2321, and from 5 August 2017: (1) Regulation 8(1)(g) of the Charter of the United Nations (Sanctions – Democratic People's Republic of Korea) Regulations 2008 provides that any provision of public or private financial support for the purposes of trade with the DPRK is a "sanctioned service"; and (2) the Minister for Foreign Affairs will be able to grant a permit authorising a person to provide such support if the Committee has approved it in advance.

Changes in respect of dealings with designated persons or entities and in respect of controlled assets

From 5 August 2017, Regulation 14(8) of the Charter of the United Nations (Sanctions – Democratic People's Republic of Korea) Regulations 2008 provides that a person may apply for a permit to: (1) authorise the making available of an asset to a person or entity designated by the Minister for Foreign Affairs; (2) the use of, or dealing with, a controlled asset with respect to such an person or entity. A permit can be applied for if: (1) the asset is required to carry out the activities of the DPRK's missions to the UN (or a specialised agency or related organisation of the UN) or other diplomatic or consular missions of the DPRK; or (2) the Committee has determined in advance that the asset is required for the delivery of humanitarian assistance, denuclearisation or any other purpose consistent with the objectives of UNSS resolution 2270. Consequential changes will be made to Regulation 12(2)(b) and 13(2)(c).

From 6 July 2017, the definition of 'controlled asset' in the Charter of the United Nations (Sanctions – Democratic People's Republic of Korea) Regulations 2008 includes a vessel designated by the Committee for the purposes of paragraph 12(d) of UNSC resolution 2321.

Other changes

In accordance with UNSC resolutions 2270 and 2321, and from 5 August 2017, Regulation 8(1)(db) of the Charter of the United Nations (Sanctions – Democratic People's Republic of Korea) Regulations 2008  has been deleted and new wording inserted in Regulation 8(1)(da) prohibiting the provision of vessel or aircraft crewing services to the persons and entities mentioned in Regulation 8(1)(da). At the same time, the persons and entities mentioned in Regulation 8(1)(da) have been expanded to include any other entity owned or controlled by a person or entity mentioned in Regulations 8(1)(da)(i) to (iv) inclusive. 

From 6 July 2017, Regulation 8B(2) of the Charter of the United Nations (Sanctions – Democratic People's Republic of Korea) Regulations 2008 has been deleted, and Regulation 8B(3)(d) has been amended to refer to UNSC Resolution 2321. 

From 6 July 2017, the Minister is also able to grant a person a permit authorising the person to engage in a specified activity if the Committee has exempted the activity in advance under paragraph 46 of UNSC resolution 2321.  Such a permit permits an activity that would otherwise be prohibited under the Charter of the United Nations (Sanctions – Democratic People's Republic of Korea) Regulations 2008.   

Actions for concerned parties

If you think your current or future business or other activities may be affected by the new sanctions set out above, you should seek legal advice.  You can also use the Online Sanctions Administration System to submit an inquiry in relation to whether you need a sanctions permit for an activity, or to make a formal application for a sanctions permit. ​


Last Updated: 9 August 2017