A merican Club Circular No. 27/17 1 SEPT EMBER 25, 2017 CI RCULAR NO. 27/17 TO MEMBERS OF THE ASSOCIATION Dear Member: THE UNITED NATIONS AND THE UNITED STATES IMPOSE NEW, ADDITIONAL SANCTIONS ON NORTH KOREA On September 10, 2017, the United Nations Security Council adopted a resolution (UNSCR 2375) requiring the imposition of additional economic sanctions against North Korea. T his Circular briefly summarizes these new sanctions. It should be read in conjunction with earlier Circulars on this subject issued by the Club. The new UN sanctions The new sanctions under UNSCR 2375 are designed to accomplish six major goals: cap North Korea's oil imports, ban its textile exports, end additional overseas labor contracts, suppress smuggling efforts, stop joint ventures with other nations, and impose sanctions on additional designated North Korean government entities. Me mber states of the UN are required to implement and enforce UNSCR 2375. Where required, and where UN resolutions are not directly applicable as a matter of national law, member states are expected to take implementing action through the enactment of national laws and the promulgation of relevant regulations. The new UN sanctions include the following items: -A complete ban on selling natural gas to North Korea; -A complete ban on purchasing North Korean textiles; -A quota for selling oil to North Korea (an estimated 30% reduction from current levels); -The limitation on the supply of refined petroleum: 500,000 barrels during an initial period of three months — beginning on October 1, 2017 and ending on December 31, 2017 — and two million barrels per year during a period of twelve months beginning on January 1, 2018 and annually thereafter; -A limit of crude oil sales to North Korea not exceeding the amount supplied by each state in the period prior to the adoption the resolution; -A limit on twelve month visas provided to North Korean laborers overseas. Existing visas are allowed to continue until expired, but no new visas are allowed to be issued. American Club Circular No. 27/17 2 - A requirement that all member states inspect ships going in and out of North Korea’s ports (a provision put in place by the Security Council in 2009). It should be noted that the use of force is not authorized for ships that do not comply; o If flag states refuse to allow inspections of suspicious vessels, then the flag state is required to redirect the vessels to a port for inspection; and o If a flag state or vessel does not cooperate with inspections, then the vessel can be designated for an asset freeze, denied port access, de-registered, and suffer other penalties. - A ban on joint ventures. This is aimed at further reducing foreign income, as well as technology transfers. However, there are some exemptions for some border projects that involve China and Russia. Among other things, member states are to report to the Security Council within ninety days of the adoption of this resolution, and thereafter upon request by the Council, on concrete measures they have taken in order to implement effectively the provisions of this resolution. The Panel of Experts, in cooperation with other UN sanctions monitoring groups are to continue its efforts to assist member states in preparing and submitting such reports in a timely manner. The new UN North Korea sanctions resolution also requires that the measures specified in paragraph 8(d) of UNSCR 1718 (2006) apply also to the individual and entities listed