Facilitating Illicit Shipments to North Korea Nets Sanctions
One entity and three individuals in China, Russia, and Singapore have been hit with sanctions by the Treasury Department’s Office of Foreign Assets Control for their involvement in facilitating illicit shipments on behalf of North Korea. These sanctions are a reminder to the shipping industry, including flag states, ship owners and operators, crew members and captains, insurance companies, brokers, oil companies, ports, classification service providers, and others, of the significant risks posed by North Korea’s shipping practices.
The sanctions are being imposed under executive order 13810 issued in September 2017, which significantly expanded Treasury’s authorities to target those who enable the North Korean regime’s activity wherever they are located. This includes (a) targeting those conducting significant trade in goods, services, or technology with North Korea and banning them from interacting with the U.S. financial system, (b) blocking and freezing the assets of actors supporting North Korea’s textiles, manufacturing, information technology, fishing, and other industries, and (c) suspending U.S. correspondent account access to any foreign bank that knowingly conducts or facilitates significant transactions tied to trade with North Korea or certain designated persons.
OFAC has designated a China-based company and its Singapore-based affiliate for working together to facilitate illicit shipments to North Korea using falsified shipping documents, including exports of alcohol, tobacco, and cigarette-related products. OFAC has also designated a Russia-based port service agency (and its director general) for providing port services to North Korea-flagged vessels even after its employees knew of oil-related sanctions on North Korea.
Any property or interests in property of the designated persons in the possession or control of U.S. persons or within the U.S. may not be transferred, paid, exported, withdrawn, or otherwise dealt in, and U.S. persons are prohibited from dealing with any of the designated parties.