US Designates Two Shipping Firms for Evading North Korea Sanctions

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has designated two shipping companies that have helped North Korea evade sanctions.

The companies in question are Dalian Haibo International Freight and Liaoning Danxing International Forwarding, both of them based in China.

According to OFAC, the action highlights the deceptive methods that the North Korean regime uses to circumvent international and US sanctions, as well as the US Government’s commitment to implement existing UN Security Council (UNSC) resolutions.

“The United States and our like-minded partners remain committed to achieving the final, fully verified denuclearization of North Korea and believe that the full implementation of North Korea-related UN Security Council resolutions is crucial to a successful outcome,” Treasury Secretary Steven T. Mnuchin, said.

“Treasury will continue to enforce our sanctions, and we are making it explicitly clear that shipping companies employing deceptive tactics to mask illicit trade with North Korea expose themselves to great risk,” Mnuchin added.

Specifically, Dalian Haibo has been designated for providing goods and services to or in support of the US-designated Paeksol Trading Corporation (Paeksol). In early 2018, Dalian Haibo shipped cargo from Dalian, China to Paeksol in Nampo, North Korea, aboard DPRK-flagged vessels.

The second company, Liaoning Danxing, has been designated for operating in the transportation industry in North Korea. Liaoning Danxing routinely used deceptive practices that enabled EU-based North Korean procurement officials to operate and purchase goods for the DPRK regime, according to OFAC.

In a related action, OFAC, along with the US Department of State and the US Coast Guard, has updated the North Korea shipping advisory, adding dozens of vessels that are believed to have engaged in ship-to-ship (STS) transfers with North Korean tankers or exported North Korean coal. The updated advisory provides new information about North Korea’s deceptive shipping practices, additional guidance on how to mitigate the risk of involvement in these practices, a new graphic depicting certain ports of call, and three new annexes.

As detailed in the advisory, North Korea illicit shipping practices include disabling or manipulating automated identification systems, physically altering vessels, conducting STS transfers, and falsifying cargo documentation. Since initial publication in February 2018, North Korea has altered the geographic location of STS transfers and has resumed exports of coal in the Gulf of Tonkin.

As a result of the OFAC action, any property or interests in property of the designated persons in the possession or control of US persons or within or transiting the United States is blocked, and US persons generally are prohibited from dealing with the designated persons.