In this report, we focus on the implications for the financial industry of today’s Senate Banking Committee hearing on increasing sanctions on North Korea.   Although senators indicated that this hearing will be the first of a series and many are still exploring the impact of new sanctions, it is clear that there is bipartisan consensus on the need to take additional action and that sanctioning Chinese banks is now seen as the most likely route to pressuring North Korea.  While much of the questioning simply aimed to better understand the possible effects of different types of sanctions, there was notable pressure from several senators and witnesses to impose sanctions on banks that are deemed either to willfully do business with North Korea or to fail to perform proper due diligence.

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