Last Friday, OFAC further amended its rules relating to “flag of convenience” ships registered in North Korea. Previously, OFAC had forbidden Americans from owning, leasing, operating or insuring North Korean flagged ships. Under the new rules, Americans may not obtain authorization for a vessel to fly a North Korean flag.

This amendment is presumably directed at ship registry services that assist third parties in obtaining registration for ships on the various open registries throughout the world such as Liberia, the Seychelles and North Korea. Although I could locate a number of companies on the Internet providing such services, such as this one, none of them appeared to be U.S.-based, so it doesn’t seem clear that the new rule will have wide impact on U.S. business.

I have to wonder, as well, why on earth a ship would want to fly a North Korean flag in the first place given the inevitable scrutiny such a flag is bound to attract. This is particularly true now given that paragraph 8(f) of U.N. Security Council Resolution 1718 arguably gives countries broader authority to board and inspect North Korean flag ships. Not surprisingly even North Korea is reluctant to have its own ships fly under the North Korean flag and prefers to register them on other open registries such as those of Cambodia and Tuvalu.

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