Huge day in OFAC news, as a number of countries have been removed by amendment from the Terrorism List Government Sanctions Regulations found at 31 C.F.R. Part 596. This amendment effectively removes Iraq, Libya, and North Korea from the list of state sponsors of terrorism. With this Amendment only four nations remain designated as state sponsors of terrorism by the U.S.: Cuba, Iran, Sudan, and Syria.

Section 321 of the Antiterrorism and Effective Death Penalty Act of 1996, makes it a criminal offense for United States persons to engage in financial transactions with the governments of countries designated under section 6(j) of the Export Administration Act of 197 (the ‘‘EAA’’), as supporting international terrorism. To implement the requirements of the Act, OFAC has promulgated the Terrorism List Governments Sanctions Regulations, 31 CFR part 596.

Section 596.201 of the Regulations provides that, except as authorized by regulations, orders, directives, licenses, or otherwise, no United States person, knowing or having reasonable cause to
know that a country is designated under section 6(j) of the EAA as a country supporting international terrorism, shall engage in a financial transaction with the government of such country. A schedule following section 596.201 listed those countries that were designated under section 6(j) as of the effective date of the Regulations. Since that date, the Secretary of State has issued Public Notices rescinding the designations of Iraq, Libya, and North Korea.

I understand that these countries have been removed from the list for sometime, but that the schedule had not been updated. That just goes to show you how slow OFAC really moves, considering the North Korea was removed in October of 2008 and now in May 2009, nearly 7 months after that removal, were they finally removed from the published list.

I also understand why Iraq (ousting of Saddam’s regime) and Libya (Qaddafi’s 180 degree transformation) were removed. What is unclear to me is still unclear to me is why North Korea was removed? I thought with such a contentious relationship still existing between the North Korean regime and the U.S. Government that this listing could still be a diplomatic tool in dealing with them. I would like hear from any North Korea experts at there for either why or why not the removal of Kim Jong Il’s regime from the state sponsors of terrorism was a good thing for U.S. foreign policy.