Plan B Watch: Treasury Sanctions Iranian, N. Korean Companies for WMD Financing

Treasury has sanctioned an Iranian company under Executive Order 13382 for its dealings with previously sanctioned North Korean entities suspected of involvement in WMD development and proliferation.  It has also designated a new North Korean entity, Namchongang Trading Company.  Treasury’s full announcement itself is interesting and worth reading.  I’ve posted the full text below the jump, interlaced with a few editorial comments of my own.

The U.S. Department of the Treasury today targeted North Korea’s missile proliferation network by designating Hong Kong Electronics under Executive Order 13382.  E.O. 13382 freezes the assets of designated proliferators of weapons of mass destruction and their supporters and prohibits U.S. persons from engaging in any transactions with them, thereby isolating them from the U.S. financial and commercial systems.  Hong Kong Electronics, located in Kish Island, Iran, has been designated for providing support to North Korea’s Tanchon Commercial Bank (Tanchon) and Korea Mining Development Trading Corporation (KOMID).

Tanchon and KOMID have also been designated by the United States under E.O. 13382 and the UN Security Council under Resolution 1718. The Department of State also today targeted North Korea’s nuclear proliferation network by designating Namchongang Trading Corporation (NCG), a North Korean nuclear-related company in Pyongyang, under E.O. 13382.

“North Korea uses front companies like Hong Kong Electronics and a range of other deceptive practices to obscure the true nature of its financial dealings, making it nearly impossible for responsible banks and governments to distinguish legitimate from illegitimate North Korean transactions,” said Stuart Levey, Under Secretary for Terrorism and Financial Intelligence.

What this is saying, without saying it directly, is that Hong Kong was laundering money to conceal its use for WMD financing.

“Today’s action is a part of our overall effort to prevent North Korea from misusing the international financial system to advance its nuclear and missile programs and to sell dangerous technology around the world.”

Since 2007, Hong Kong Electronics has transferred millions of dollars of proliferation-related funds on behalf of Tanchon and KOMID. Hong Kong Electronics has also facilitated the movement of money from Iran to North Korea on behalf of KOMID. Tanchon, a commercial bank based in Pyongyang, North Korea, is the financial arm for KOMID – North Korea’s premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons.

Tanchon plays a key role in financing the sales of ballistic missiles for KOMID. Tanchon has also been involved in financing ballistic missile sales from KOMID to Iran’s Shahid Hemmat Industrial Group (SHIG), which is the Iranian organization responsible for developing liquid-fueled missiles. SHIG has been designated under E.O. 13382 and sanctioned by the United Nations under UN Security Council Resolution (UNSCR) 1737. Since 2005, Tanchon has maintained an active relationship with various branches of Iran’s Bank Sepah, an entity designated under E.O. 13382 and sanctioned by the United Nations under UNSCR 1747, for providing financial services to Iran’s missile program.

More about SHIG and Treasury’s designation of Bank Sepah at this post.

The U.S. has reason to believe that the Tanchon-Bank Sepah relationship has been used for North Korea-Iran proliferation-related transactions.

Much more about the Iranian-North Korean axis in this series of posts.  Left unsaid in all of this — China’s long and deep associations with the WMD programs of China and North Korea.

Update:   The New York Times notes that it’s not clear whether either of the newly sanctioned entities has assets in the United States.  Reuters also adds this interesting background piece:

The U.S.-based Institute for Foreign Policy Analysis estimates that North Korea, with an annual GDP of about $20 billion, earns some $1.5 billion a year from missile sales. Other studies said the figure may be in the hundreds of millions of dollars, but that U.N. sanctions have cut into exports.  [Reuters]

1 Comment