Does the U.S. Need to Sanction Businesses That Trade With and Enable North Korea? (S. 1562)

What is S. 1562?

(Updated December 12, 2018)

This bill would prohibit the North Korean government, its affiliates, and entities that do business with it from using the U.S. financial system, in addition to blocking all transactions involving such entities. Sanctions would also be extended to the top 10 Chinese companies that import North Korean goods. No goods made with North Korean labor would be permitted to enter the U.S., as would products from entities implicated in North Korean labor trafficking.

The Securities and Exchange Commission (SEC) would be directed to create regulations within 270 days that require all issuers of stock and other securities to disclose annually any investments the issuer makes in North Korea.

The president would be allowed to waive these sections if they determine that doing so would be in the national security interest of the U.S. and provide relevant congressional committees with a report on the determination and the reasons for it. The president would also be able to waive sanctions to allow for humanitarian assistance for renewable periods of between 30 days and one year.

Argument in favor

The U.S. needs to use every diplomatic and economic tool at its disposal to prevent North Korea from starting a nuclear war. Preventing entities that currently trade with North Korea from doing business in the U.S. will apply needed pressure on China to help bring the North Korean regime in line.

Argument opposed

The North Korean regime hasn’t cooperated with the U.S. and the international community after previous rounds of sanctions were put in place. Increasing sanctions on Chinese businesses that are the largest importers of North Korean goods may antagonize the Chinese government.

Impact

Businesses and entities that do business with North Korea; Chinese importers of North Korean goods; the SEC; and the president.

Cost of S. 1562

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Sen. Cory Gardner (R-CO) introduced this bill to ban entities that do business with North Korea or its enablers from using the U.S. financial system and sanction all those participating in North Korean labor trafficking abuses:

“With its latest successful test of an intercontinental ballistic missile, North Korea has demonstrated intent and capability to hit the U.S. homeland – and as President Trump said, we must never allow this to happen. We must take every diplomatic and economic measure now to stop North Korea and to prevent nuclear war. My bipartisan legislation gives those that currently conduct trade with North Korea a clear choice – either do business with this heinous outlaw regime or do business with the world’s leading economic and military power.”

One of the bill’s original cosponsors, Sen. Ed Markey (D-MA), added:

“There is no military solution to the threat of a nuclear North Korea. We must utilize direct negotiations with Pyongyang alongside increased economic sanctions pressure fro, China to bring the Kim regime to the table and ultimately rid the Korean Peninsula of nuclear weapons. These negotiations could offer the prospect of engaging North Korea in line with international norms by ending horrific human rights abuses, including labor trafficking.”

This bill has the support of seven bipartisan cosponsors in the Senate, including five Republicans and two Democrats.

Media:

• Sponsoring Sen. Cory Gardner (R-CO) Press Release
  
• Denver Post
  
• UPI