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It is an elemental point but nonetheless one worthy of reminder: as OFAC can authorize certain otherwise prohibited transactions via general or specific license, so may OFAC rescind those authorizations and reinstate the prohibitions.

Those following the North Korea Sanctions Regulations, 31 C.F.R. Part 510, learned this lesson today when OFAC announced its issuance of General License 1-A, which rescinded the prior authorization for U.S. financial institutions to open and operate accounts for North Korea’s diplomatic mission and its employees and families and enacted in its place a requirement that any funds transfers to or from North Korea’s diplomatic mission or its employees be conducted through an account at a U.S. financial institution that has been specifically licensed to engage in such transaction by OFAC. The change follows the passage of United Nations Security Council Resolution 2321 (UNSCR 2321) earlier this month, in which the security body agreed to significantly increase the sanctions pressure on North Korea for its nuclear weapons and ballistic missile programs.

Pursuant to ¶ 16 of UNSCR 2321, UN Member States are obligated to “take steps to limit the number of bank accounts to one per DPRK diplomatic mission and consular post, and one per accredited DPRK diplomat and consular officer, at banks in their territory…” OFAC’s amendment to General License 1 of the North Korea Sanctions Regulations is thus intended to bring the United States into line with its legal obligations under international law. (The UNSCR obligation is a “decision” of the Security Council and thus binding on UN Members, including the United States.) OFAC had a model to adhere to the Council’s decision, as 31 C.F.R. § 560.512, which authorizes the provision of goods or services in the U.S. to Iran’s diplomatic missions, likewise mandates that transactions be conducted through an account at a U.S. financial institution that is specifically licensed by OFAC.

This specific licensing regime, however, leads one to question whether OFAC will indeed specifically authorize a U.S. financial institution to provide such services to North Korea’s diplomatic mission and its employees. I think the answer is clearly yes. As the host country of the United Nations, the United States has distinct legal obligations to ensure that UN Member-States – including “Members whose governments are not recognized by the United States” – and their representatives are afforded “such privileges and immunities” as are typically accorded to other U.S.-accredited diplomatic envoys. I do not expect OFAC to deliberately flout this rule, particularly in consideration of the fact that its decision to amend General License 1 was undertaken in order to adhere to international law.

The broader lesson, though, remains: OFAC is granted full power to authorize otherwise prohibited transactions via a delegation of the President’s IEEPA authorities (provided that such power is not restricted via certain statutory restrictions) and to rescind such license authorizations at will. Operating under a general license or holding specific license authorization to engage in a given transaction provides no guarantee that engagement in such activities will be permissible in the future. OFAC’s revocation power operates at will.

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