The Democratic People’s Republic of Korea (Sanctions) (EU Exit) Regulations 2019

Asset-freeze etc.: exceptions from prohibitions

81.—(1) The prohibition in regulation 13 (asset-freeze in relation to designated persons) is not contravened by an independent person (“P”) transferring to another person a legal or equitable interest in funds or economic resources where, immediately before the transfer, the interest—

(a)is held by P, and

(b)is not held jointly with the designated person.

(2) In paragraph (1) “independent person” means a person who—

(a)is not the designated person, and

(b)is not owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.

(3) The prohibitions in regulations 13 to 15 (asset-freeze in relation to, and making funds available to, or for the benefit of, designated persons) are not contravened by a relevant institution crediting a frozen account with interest or other earnings due on the account.

(4) The prohibitions in regulations 14 and 15 (making funds available to, or for the benefit of, designated persons) are not contravened by a relevant institution crediting a frozen account where it receives funds transferred to that institution for crediting to that account.

(5) The prohibitions in regulations 14 and 15 are not contravened by the transfer of funds to a relevant institution for crediting to an account held or controlled (directly or indirectly) by a designated person, where those funds are transferred in discharge (or partial discharge) of an obligation which arose before the date on which the person became a designated person.

(6) The prohibitions in regulations 13 to 15 are not contravened in relation to a designated person (“P”) by a transfer of funds from account A to account B, where—

(a)account A is with a relevant institution which carries on an excluded activity within the meaning of section 142D of the Financial Services and Markets Act 2000(1),

(b)account B is with a ring-fenced body within the meaning of section 142A of the Financial Services and Markets Act 2000(2), and

(c)accounts A and B are held or controlled (directly or indirectly) by P.

(7) The prohibitions in regulations 13 to 17 (asset-freeze etc.) do not apply to—

(a)a transaction with the Foreign Trade Bank of the Democratic People’s Republic of Korea at any time when that bank is a designated person, or

(b)a transaction with the Korean National Insurance Company at any time when that company is a designated person,

if the transaction is solely for an exempt purpose.

(8) For the purposes of paragraph (7), a transaction is for an exempt purpose if it is solely for the purposes of—

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

(b)any humanitarian assistance activities that are undertaken by, or in co-ordination with, the United Nations.

(9) Where a person—

(a)is designated under regulation 5 for the purposes of regulations 13 to 17, and

(b)is a person whose designation is required by paragraph 32 of resolution 2270 (certain entities etc. of the Government of the DPRK or the Worker’s Party of Korea),

the prohibitions in regulations 13 to 17 do not apply to anything done in relation to that person which is necessary for the operation of any of the DPRK’s missions.

(10) In paragraph (9) “the DPRK’s missions” means—

(a)missions of the DPRK to the United Nations and its specialised agencies and related organisations, and

(b)other diplomatic missions and consular posts of the DPRK.

(11) In this regulation—

“designated person” has the same meaning as it has in Part 4 (Finance);

“frozen account” means an account with a relevant institution which is held or controlled (directly or indirectly) by a designated person;

“relevant institution” means a person that has permission under Part 4A of the Financial Services and Markets Act 2000(3) (permission to carry on regulated activity).

(12) The definition of “relevant institution” in paragraph (11) is to be read with section 22 of the Financial Services and Markets Act 2000(4), any relevant order under that section(5) and Schedule 2 to that Act.