FinCEN Restricts North Korean Access To Financial System

The U.S. Department of the Treasury ("Treasury") Financial Crimes Enforcement Network ("FinCEN") issued a final rule to further block North Korean access to the U.S. financial system and warned institutions about strategies employed by North Korean state-owned enterprises to gain access to international financial systems.

In the final rule issued pursuant to Section 311 of the USA PATRIOT Act, FinCEN banned U.S. financial institutions from opening or operating correspondent accounts for the Bank of Dangdong Co., Ltd. In addition, the rule requires financial institutions to take measures to (i) avoid processing transactions for correspondent accounts if such transactions involve the Bank of Dangdong, and (ii) apply enhanced due diligence to foreign correspondent accounts to prevent them from being used to process transactions involving the Bank of Dangdong. FinCEN issued the prohibition due to concerns that the Chinese bank serves as a "gateway for North Korea to