PART 4 U.K.Finance

CHAPTER 2U.K.Investment, financial services and financial markets

UK credit or financial institutions: accounts and correspondent banking relationships etc.U.K.

18.—(1) A UK credit or financial institution must not—

(a)open a bank account with,

(b)establish a correspondent banking relationship with,

(c)establish a joint venture with, or

(d)take an ownership interest in,

a person falling within paragraph (2), if the UK credit or financial institution knows, or has reasonable cause to suspect, that the bank account, correspondent banking relationship or joint venture is with, or the ownership interest is in, a person falling within paragraph (2).

(2) The following persons fall within this paragraph—

(a)a credit or financial institution domiciled in the DPRK;

(b)a branch or subsidiary, wherever located, of a credit or financial institution domiciled in the DPRK;

(c)a credit or financial institution that is not domiciled in the DPRK but is owned or controlled directly or indirectly (within the meaning of regulation 7) by a person domiciled in the DPRK.

(3) A UK credit or financial institution must not—

(a)open a representative office of that institution in the DPRK, or

(b)establish a branch or subsidiary of that institution in the DPRK.

(4) Paragraphs (1) and (3) are subject to Part 9 (Exceptions and licences).

(5) A person who contravenes a prohibition in paragraph (1) or (3) commits an offence.

UK credit or financial institutions: severance of existing financial relationshipsU.K.

19.—(1) A UK credit or financial institution must—

(a)close any bank account with,

(b)terminate any correspondent banking relationship with,

(c)terminate any joint venture with, and

(d)relinquish any ownership interest in,

a person falling within regulation 18(2).

(2) A UK credit or financial institution must—

(a)close any representative office of that institution in the DPRK; and

(b)close any branch or subsidiary of that institution in the DPRK.

(3) Paragraphs (1) and (2) are subject to Part 9 (Exceptions and licences).

(4) A person who fails to comply with a requirement in paragraph (1) or (2) commits an offence.

Opening of or taking up of business by a representative office, branch or subsidiary of DPRK credit or financial institutionU.K.

20.—(1) A person (“P”) must not—

(a)open a representative office or establish a branch or subsidiary in the United Kingdom of a person falling within regulation 18(2);

(b)enter into an arrangement for, or on behalf of, a person falling within regulation 18(2) which relates to the opening of a representative office or the establishment of a branch or subsidiary in the United Kingdom, if P knows, or has reasonable cause to suspect, that the arrangement is for, or on behalf of, such a person; or

(c)authorise the taking up and pursuit of business by a representative office, branch or subsidiary of a person falling within regulation 18(2), if the representative office, branch or subsidiary was not operational before 19 February 2013.

(2) Paragraph (1) is subject to Part 9 (Exceptions and licences).

(3) A person who contravenes a prohibition in paragraph (1) commits an offence.

DPRK credit or financial institutions: branches, subsidiaries, and representative officesU.K.

21.—(1) A person (“P”) must not operate or facilitate the operation of—

(a)a branch,

(b)a subsidiary, or

(c)a representative office,

of a person falling within regulation 18(2) if P knows, or has reasonable cause to suspect, that the branch, subsidiary or representative office is a branch, subsidiary or representative office of such a person.

(2) Paragraph (1) is subject to Part 9 (Exceptions and licences).

(3) A person who contravenes a prohibition in paragraph (1) commits an offence.

Acquisition or extension of ownership interest by a DPRK credit or financial institutionU.K.

22.—(1) A person falling within regulation 18(2) must not directly or indirectly acquire or extend a participation, or acquire any ownership interest, in a UK credit or financial institution.

(2) Paragraph (1) is subject to Part 9 (Exceptions and licences).

(3) A person who contravenes the prohibition in paragraph (1) commits an offence.

Designated persons: closure of representative officesU.K.

23.—(1) This regulation applies to a designated person which is not an individual, and which has a representative office in the United Kingdom.

(2) If the person was a designated person immediately before the relevant date, the person must close the office immediately.

(3) If the person was not a designated person immediately before the relevant date, the person must close the office within the period of 90 days beginning with the date on which the person became a designated person.

(4) Paragraphs (2) and (3) are subject to Part 9 (Exceptions and licences).

(5) A person who fails to comply with a requirement in paragraph (2) and (3)commits an offence.

(6) In this regulation, “the relevant date” means—

(a)where regulations under section 56 of the Act provide that this regulation comes into force at a specified time on a day, that time on that day;

(b)otherwise, the date on which this regulation comes into force.

Business arrangements with designated personsU.K.

24.—(1) A person (“P”) must not participate, directly or indirectly, in business arrangements, including joint ventures, with a person who P knows to be, or has reasonable cause to suspect is—

(a)a designated person, or

(b)acting on behalf of or at the direction of a designated person.

(2) Paragraph (1) is subject to Part 9 (Exceptions and licences).

(3) A person who contravenes the prohibition in paragraph (1) commits an offence.

Bank accounts for diplomatic missions etc.U.K.

25.—(1) A UK credit or financial institution must not open a bank account for—

(a)a diplomatic mission or consular post of the DPRK, or

(b)a national of the DPRK who is a member of a diplomatic mission or consular post of the DPRK.

(2) Paragraph (1) is subject to Part 9 (Exceptions and licences).

(3) A person who contravenes the prohibition in paragraph (1) commits an offence.

Investment and commercial activitiesU.K.

26.—(1) A person (“P”) must not accept or approve investment in a commercial activity which P knows, or has reasonable cause to suspect, is investment made by—

(a)the Government of the DPRK or any member of that Government;

(b)the Worker's Party of Korea;

(c)a national of the DPRK;

(d)a person, other than an individual, which is incorporated or constituted under the law of the DPRK;

(e)a person acting on behalf of or at the direction of a person falling within any of sub-paragraphs (a) to (d); or

(f)a person, other than an individual, which is owned or controlled directly or indirectly (within the meaning of regulation 7) by a person falling within any of sub-paragraphs (a) to (d).

(2) A person (“P”) must not directly or indirectly provide financial services to, or make funds available to, any person falling within paragraph [F11(a), (b) or (d) to (f)] if P knows, or has reasonable cause to suspect, that P is so providing the financial services or making the funds so available.

(3) A person (“P”) must not establish, maintain or operate a joint venture or a co-operative entity with—

(a)a person falling within paragraph (1)(a) to (f), or

(b)a person, other than an individual, which is domiciled in the DPRK,

if P knows or has reasonable cause to suspect that P is so doing.

(4) A person (“P”) must not take, acquire [F2, maintain] or extend any ownership interest in—

(a)a person falling within paragraph [F31(a), (b) or (d) to (f)], or

(b)a person [F4, other than an individual, which is] domiciled in the DPRK,

if P knows or has reasonable cause to suspect that P is so doing.

(5) A person (“P”) must not take, acquire, maintain or extend any ownership interest in activities or assets in the DPRK if P knows, or has reasonable cause, to suspect that P is so doing.

(6) A person (“P”) must not provide financial services directly or indirectly related to any activity that is prohibited by paragraphs (2) to (5) if P knows, or has reasonable cause to suspect, that P is so doing.

(7) Subject to paragraph (8), a person must close any joint ventures or co-operative entities with a person falling within paragraph (1)(a) to (f) or with a person, other than an individual, which is domiciled in the DPRK.

(8) Where a person has directly or indirectly requested approval for a joint venture or co-operative entity from the Committee, that person is not obliged to close that joint venture or co-operative entity—

(a)while no decision has yet been taken by the Committee, or

(b)if the Committee has denied the request for approval, until the end of the period of 120 days beginning with the date on which the Committee denied the request.

(9) Paragraphs (1) to (7) are subject to Part 9 (Exceptions and licences).

(10) A person who contravenes a prohibition in paragraphs (1) to (6) commits an offence.

(11) A person who fails to comply with the requirement in paragraph (7) commits an offence.

LandU.K.

27.—(1) A person (“P”) must not—

(a)lease, or otherwise make available, land, directly or indirectly, to the Government of the DPRK, any member of that Government or any person who P knows, or has reasonable cause to suspect, to be acting on its behalf;

(b)lease land, directly or indirectly, from the Government of the DPRK, any member of that Government or any person who P knows, or has reasonable cause to suspect, to be acting on its behalf;

(c)engage in any activity linked to the use of land that the Government of the DPRK, any member of that Government or any person who P knows, or has reasonable cause to suspect, to be acting on its behalf owns, leases or is otherwise entitled to use.

(2) Paragraph (1) is subject to Part 9 (Exceptions and licences).

(3) A person who contravenes a prohibition in paragraph (1) commits an offence.

Transfers of funds etc.U.K.

28.—(1) A person must not make or receive a transfer of funds which that person knows or has reasonable cause to suspect is a transfer of funds to or from the DPRK.

(2) A UK credit or financial institution must not enter into, or continue to participate in, any transaction with a person who the institution knows or has reasonable cause to suspect to be a person falling within regulation 18(2).

(3) Paragraphs (1) and (2) are subject to Part 9 (Exceptions and licences).

(4) A person who contravenes a prohibition in paragraph (1) or (2) commits an offence.

(5) In this regulation the reference to a transfer of funds includes the clearing of funds.

Insurance and reinsurance services in relation to shipsU.K.

29.—(1) A person (“P”) must not provide insurance or reinsurance services in relation to a ship if P knows, or has reasonable cause to suspect, that P is providing such services in relation to a ship that is—

(a)owned, controlled or operated by a person connected with the DPRK;

(b)a specified ship;

(c)a ship registered in the DPRK, or

(d)a ship flying the flag of the DPRK.

(2) Paragraph (1) is subject to Part 9 (Exceptions and licences).

(3) A person who contravenes the prohibition in paragraph (1) commits an offence.

(4) For the purposes of paragraph (1), the reference to a ship being “owned” or “controlled” by a person is to be interpreted in accordance with regulation 80.

(5) In this regulation—

“ship” includes every description of vessel (including a hovercraft) used in navigation;

“specified ship” means a ship specified by the Secretary of State under regulation 11(1) or (2).

Sale or purchase of bondsU.K.

30.—(1) A person (“P”) must not directly or indirectly—

(a)sell to a person falling within paragraph (4), or

(b)purchase from such a person,

public bonds or public-guaranteed bonds issued after 19 February 2013 if P knows, or has reasonable cause to suspect, that the sale or purchase of such bonds is directly or indirectly to or from such a person.

(2) A person (“P”) must not provide brokering services to a person falling within paragraph (4) in respect of public bonds or public-guaranteed bonds issued after 19 February 2013, if P knows, or has reasonable cause to suspect, that the person falls within paragraph (4).

(3) A person (“P”) must not provide—

(a)brokering services,

(b)advertising services, or

(c)any other services,

if P knows, or has reasonable cause to suspect, that the provision of the services assists a person falling within paragraph (4) to issue public bonds or public-guaranteed bonds.

(4) The following persons fall within this paragraph—

(a)the Government of the DPRK;

(b)the Central Bank of the DPRK;

(c)a person falling within regulation 18(2) (DPRK credit or financial institutions etc.);

(d)a person acting on behalf of or at the direction of a person falling within sub-paragraph (a) or (b);

(e)a person, other than an individual, which is owned or controlled directly or indirectly (within the meaning of regulation 7) by a person falling within any of sub-paragraphs (a) to (c).

(5) Paragraphs (1) to (3) are subject to Part 9 (Exceptions and licences).

(6) A person who contravenes a prohibition in paragraph (1), (2) or (3) commits an offence.