	Background

		U.S. Economic Sanctions Against North Korea

The United States imposes economic sanctions on North Korea for five primary reasons: (1) North Korea poses a threat to U.S. national security, as determined by the President and renewed annually under the terms of the Trading with the Enemy Act and National Emergencies Act; (2) North Korea is designated by the Secretary of State as a state sponsor or supporter of international terrorism, pursuant to the Export Administration Act of 1979; (3) North Korea is a Marxist-Leninist state, with a Communist government, and stated as such in the Export-Import Bank Act of 1945, and further restricted under the Foreign Assistance Act of 1961; (4) North Korea has been found by the State Department to have engaged in proliferation of weapons of mass destruction pursuant to the Arms Export Control Act, Export Administration Act of 1979, and Iran, North Korea, and Syria Nonproliferation Act of 2000; and (5) the President has determined that North Korea has detonated a nuclear explosive device, pursuant to the Arms Export Control Act and the Atomic Energy Act. The U.S. action led to Macau seizing Banco Delta Asia and closing North Korea's accounts. In October 2002, it came to light in negotiations between U.S. and North Korean government officials that North Korea was pursuing nuclear weapons capability. North Korea officially withdrew from the Nuclear Nonproliferation Treaty on January 10, 2003 (effective three months hence), the first signatory country to do so. The United States is required by law to oppose membership in the international financial institutions of, or financial support to, terrorist states. The United States discussed the matter with South Korea and Japan in 2000. At the President's discretion, North Korea would also be subject to the economic sanctions provided in three provisions of law addressing human rights conditions: the Foreign Assistance Act of 1961, under which North Korea is annually castigated for its human rights record; the International Religious Freedom Act of 1998, under which the administration has identified North Korea as a "country of particular concern" since 2001; and the Trafficking Victims Protection Act of 2000, under which the administration has, since 2003, classified North Korea as a Tier 3 (most severe) offender of standards pertaining to the trafficking of persons for slavery or sex trade.
This paper explains the U.S. economic sanctions in place up to the point when North Korea was delisted as a state sponsor of acts of international terrorism.
Until June 2008, U.S. economic sanctions were imposed against North Korea for five primary reasons: (1) North Korea is seen as posing a threat to U.S. national security; (2) North Korea is designated by the Secretary of State as a state sponsor or supporter of international terrorism; (3) North Korea is a Marxist-Leninist state, with a Communist government; (4) North Korea has been found by the State Department to have engaged in proliferation of weapons of mass destruction; and (5) North Korea has been found by the President to have detonated a nuclear explosive device. The United States has also taken steps to isolate the Macau-based Banco Delta Asia for counterfeiting and money-laundering activities, actions North Korea has characterized as attacks against it. In accordance with U.S. law, the United States limits some trade, denies trade in dual-use goods and services, limits foreign aid, and opposes entry into or support from international financial institutions. At the President's discretion, North Korea would also be subject to the economic sanctions pursuant to the International Religious Freedom Act of 1998, under which the administration has identified North Korea as a "country of particular concern" since 2001, and pursuant to the Trafficking Victims Protection Act of 2000, under which the administration has classified North Korea in the category of most severe offender (Tier 3) since 2003.
In October 2002, after meetings between high-level U.S. and North Korean government officials, the United States reported that North Korea had confirmed suspicions that it had reactivated its nuclear weapons development program. An international crisis ensued, with North Korea expelling International Atomic Energy Agency (IAEA) inspectors and declaring that it would withdraw from the Non-Proliferation Treaty. Participants in the Korean Energy Development Organization (KEDO)—including United States, Japan, South Korea and European Union—in turn suspended shipments of fuel oil. KEDO also suspended construction of the light-water reactors, the completion of which had been planned for 2003. North Korea officially withdrew from the Nuclear Nonproliferation Treaty on January 10, 2003 (effective three months hence), the first signatory country to do so.