On March 22, 2019, just one day after the Treasury Department imposed new sanctions on North Korea, President Trump reversed the decision. The President decided almost unilaterally that after a comprehensive review and publishing of such sanctions by the Treasury Department, he would reverse them in what looks like a show of goodwill to Chairman Kim Jong-un. The President seeks a nuclear deal with North Korea, and the North Koreans have expressed outright that new sanctions would threaten such a deal.
Background of the March 21 Sanctions
Before President Trump revoked the sanctions, certain Chinese shipping and freight companies were designated by the Treasury department. The companies were accused of conducting ship-to-ship transfers with North Korean tankers. These evasive practices are in violation of US sanctions, and in response, OFAC announced a broad designation of these vessels and their owners.
Potential Impact of the Revocation
The unilateral revocation of sanctions by the president after the DoT’s announcement could mean foreign countries and entities will question the seriousness of future U.S. sanctions. Because the president can unilaterally remove sanctions after the fact, other designated entities may begin to believe that an OFAC sanctions announcement is not a serious concern.