Trump Administration’s North Korea Travel Ban to Start September 1, Likely Prelude to Expanded North Korea Sanctions Effort

Dorsey & Whitney LLP

Dorsey & Whitney LLP

Citing both “serious risk to United States nationals of arrest and long-term detention” and the “imminent danger to the physical safety of United States nationals,” on August 2, the U.S. State Department issued a Geographical Travel Restriction barring the use of a U.S. passport to travel in, through or to Democratic People’s Republic of Korea (“DPRK”). 82 Fed. Reg. 36067 (Aug. 2, 2017). The new DPRK travel ban will come into effect on September 1, 2017.

While the State Department had previously discouraged Americans from making trips to the DPRK with dire warnings, the new more stringent policy will now legally bar such travel following the death of 22-year old University of Virginia student Otto Warmbier. Warmbier had been arrested and convicted in the DPRK in January 2016 for stealing a propaganda poster and was sentenced to 15 years at hard labor. He was released by the DPRK in June 2017 in a coma, and he died shortly after being returned home without ever regaining consciousness.

This is the first time in 27 years that U.S. Government has relied on its passport system to block travel to another country. The United States had last restricted travel to Iraq in 1990 during the Gulf War with Saddam Hussein’s regime following its invasion of Kuwait.

In its exceptionally brief August 2 notice in the Federal Register, the State Department said it was relying upon its legal authority under 22 U.S.C. § 211a and Executive Order 11295 (which had been issued by President Lyndon Johnson as published in 31 Fed. Reg. 100603 (Aug. 5, 1966, delegating to the Secretary of State the President’s power to grant, issue and verify U.S. passports).

Section 211a provides a rather tightly circumscribed set of conditions under which the Secretary of State may limited the right of U.S. nationals to travel on an American passport:

The Secretary of State may grant and issue passports, and cause passports to be granted, issued, and verified in foreign countries by diplomatic and consular officers of the United States, and by such other employees of the Department of State who are citizens of the United States as the Secretary of State may designate, and by the chief or other executive officer of the insular possessions of the United States, under such rules as the President shall designate and prescribe for and on behalf of the United States, and no other person shall grant, issue, or verify such passports. Unless authorized by law, a passport may not be designated as restricted for travel to or for use in any country other than a country with which the United States is at war, where armed hostilities are in progress, or where there is imminent danger to the public health or the physical safety of United States travellers. [emphasis supplied]

From other statements issued by the State Department, it appears that four categories of travelers with U.S. passports will still be able to travel to the DPRK in spite of the new travel ban: (a) journalists, (b) Red Cross officials, (c) humanitarian workers, and (d) individuals whose visit is "otherwise in the national interest." However, any individuals who believe they qualify for one of these categories of permitted travelers will need first to apply for a special passport validation from the State Department, and those traveling without such special validation could be prosecuted for misusing a U.S. passport or could face cancellation of their passports.

Interestingly, these new State Department rules follow an entirely different legal pathway from the bar on Cuban travel imposed on U.S. persons by the Office of Foreign Assets Control (“OFAC”) under the Cuban Assets Control Regulations (“CACR”), 31 C.F.R. Part 515, which has regulated and limited travel to Cuba for many years. OFAC’s many different sanctions programs are today typically rooted in the 1977 International Emergency Economic Powers Act (“IEEPA”), which is the “peacetime” sanctions law that undergirds, for instance, the U.S. sanctions on other countries such as Iran, Sudan and Syria. However, Congress modified IEEPA through the 1988 Berman Amendment that specifically bars the President from using IEEPA to limit or regulate U.S. person travel or the provision of travel services. (That is the reason, for instance, that the Iranian, Sudan and Syrian sanctions regulations issued by OFAC are contain express “exemptions” for such U.S. person travel and travel services.)

The lone exception among OFAC’s comprehensive programs are the CACR rules imposing sanctions on Cuba, which are not based on IEEPA but, instead, on the much earlier 1917 Trading with the Enemy Act (“TWEA”), which Congress has earmarked as the “wartime” sanctions statute. In the complex history of the Berman Amendment, its proponents in Congress had originally sought to exempt the limitation or regulation of travel under both IEEPA and TWEA at the same time but only succeeded in amending IEEPA. With the Cuban sanctions being the only comprehensive sanctions program at OFAC today that has been grandfathered under the authority of TWEA, OFAC can thus lawfully limit or regulate Cuban travel but cannot affect travel to any of its other OFAC-sanctioned countries, such as the DPRK.

From a geopolitical perspective, the new State Department travel ban is likely only one small facet of a multi-prong escalation in U.S. (and perhaps United Nations) sanctions against the DPRK in light of its on-going nuclear weapons and long-range missile testing programs. If the Trump Administration is able to weld together a new multilateral bargain on such expanded sanctions through the U.N. Security Council, with the agreement of both China and Russia, there could be joint efforts to secure a drastic curtailing of DPRK exports and trade with third countries across such key sectors as coal, iron and iron ore and other metals and minerals. To be successful, such an enhanced sanctions regime would likely need to combine direct sanctions against more named DPRK companies and banks and also secondary sanctons directed toward many third country companies and banks who now do regularly business with the DPRK, such as the punitive measures announced by OFAC at the end of June against a small bank, a company and two individuals in China.

As these expanded DPRK sanctions may unfold in the coming weeks and months, U.S. and other companies around the world will likely have little difficulty adjusting to more DPRK names being on the relevant sanctions lists, but more practical problems may arise as the new secondary sanctions are directed against third country companies and banks. In particular, since the DPRK relies overwhelmingly (probably in excess of 80%) on China as its main trading partner, the disparate effect of such sanctions on China’s business interests could add to the already-irritated bilateral relationship between the U.S. and China and could create ripple effects in numerous global supply chains across the Pacific and elsewhere in the world.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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