Russian, Chinese shipping companies facilitate N.Korean revenue streams
The U.S. Treasury Department’s Office of Foreign Asset Control announced new sanctions against Chinese and Russian shipping companies that the U.S. believes are helping North Korea evade sanctions designed to curtail its nuclear-weapons program.
The Treasury Department named two China-based companies as helping facilitate illicit shipments to North Korea “using falsified shipping documents, including exports of alcohol, tobacco, and cigarette-related products.” The illegal cigarette trade is estimated to net over $1 billion per year for North Korea; those proceeds help fund the nuclear-weapons program.
The Dalian Sun Moon Star International Logistics Trading Company and its Singapore-based affiliate SINSMS Pte. Ltd. have engaged in general trade of items between North Korea and China, Singapore, Hong Kong, Thailand, Vietnam, Indonesia, and Cambodia, according to the Treasury Department.
OFAC also designated the Russia-based company Profinet and its director general as violating sanctions: “Profinet is a Russian port service agency that provides loading, bunkering, supplying, and departure arrangements for vessels…. Profinet has provided port services on at least six separate occasions to DPRK-flagged vessels, including the sanctioned vessels CHON MYONG 1 and RYE SONG GANG 1, which have carried thousands of metric tons of refined oil products. Profinet continued to offer its bunkering services to DPRK-flagged vessels even after its employees knew of oil-related sanctions on North Korea,” the U.S. Treasury Department asserts.
A common tactic to evade sanctioned trade has been ship-to-ship transfers at sea. Satellite photos have documented numerous transfers and have helped investigators identify the ships and companies involved.
Treasury Secretary Steve Mnuchin said that the U.S. Treasury will continue to aggressively pursue violators of U.N. sanctions against North Korea, and that shipping companies, ports, and vessels that facilitate illicit trade that provides revenue streams to North Korea risk action against them. He cited the Russian and Chinese companies as examples.
“The tactics that these entities based in China, Singapore, and Russia are using to attempt to evade sanctions are prohibited under U.S. law, and all facets of the shipping industry have a responsibility to abide by them or expose themselves to serious risks,” Mnuchin said. “Consequences for violating these sanctions will remain in place until we have achieved the final, fully verified denuclearization of North Korea.”
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