Category: Money Laundering

Treasury sanctions, DOJ indicts Chinese for violating N. Korea sanctions

As of yesterday, and for the first time ever, the U.S. Treasury Department has frozen the assets of Chinese entities for violating North Korea sanctions, and the Justice Department has indicted them for sanctions violations, conspiracy, and money laundering. The company in question is the Liaoning Hongxiang Group of companies, of which Dandong Hongxiang Industrial Development Company Limited, or DHID, is the largest component. The individuals are Hong Jinhua, Luo Chuanxu, Zhou Jianshu, and Ma Xiaohong, the CEO of the Liaoning...

Defections may not foretell N. Korea’s collapse (but they could help induce it)

The defection of North Korean Deputy Ambassador Thae Yong-ho two weeks ago has tolled a ghoulish vigil in which bloggers, op-ed writers, and academics have speculated about the longevity of His Porcine Majesty. Some of them still read a long lifeline on his palm. South Korean President (and master troll) Park Geun-hye, on the other hand, sees “serious cracks” in the regime and says that the cohesion of the oligarchs is “collapsing.” “The North Korean regime is taking no account...

Yet another North Korean slush fund manager vanishes, this time in Europe

I’m no expert, but I don’t see how this could be a coincidence. A North Korean official managing money for North Korean leader Kim Jong-un in Europe has disappeared, raising speculation that he might have defected with a large amount of state funds, a local media report said Friday. Citing anonymous sources, major local daily newspaper the Dong-A Ilbo reported that the official in charge of money management for the so-called No. 39 office of the Workers’ Party vanished in June....

Why Treasury should require banks to keep records about N. Korean beneficial ownership

In my policy discussions about North Korea, two of the smartest sanctions skeptics I’ve debated are professors John Park and James Walsh. Not only are they both genuinely nice people, their skepticism points to flaws and gaps in the sanctions regime, and that skepticism ultimately serves to improve the quality of the sanctions and their enforcement. They’ve been particularly persuasive about the importance of pursuing “North Korea Inc.,” Pyongyang’s extensive and shadowy network of agents and trading companies in China,...

N. Korean counterfeiting surges as Bureau 39’s checks bounce.

When the Secret Service first found high-quality counterfeit dollars circulating in the Middle East over three decades ago, North Korea wasn’t the prime suspect; . The counterfeits were so good that experts could only tell them from the originals by the superior quality of their printing, so the Secret Service named them “supernotes.” The Secret Service’s suspicions shifted to North Korea in 2000, after Cambodian authorities arrested Yoshimi Tanaka, a Japanese Red Army hijacker who had taken refuge in North...

Obama Administration, GOP Congress join forces in N. Korea sanctions push in Asia

It’s a rare day in any election year, much less this one, when anyone could write a post title like that about a major public policy issue. Now, for the first time since I began writing this blog, all of the cylinders — the President, the Congress, the U.N., South Korea, and Japan — are all firing in the same sequence to raise the pressure on Pyongyang and Beijing. Over the last week, we’ve seen the Republican Congress’s key foreign...

The Treasury Department just went full Alderaan on North Korea (updated)

For decades, North Korean drug dealers, counterfeiters, proliferators, arms dealers, money launderers, and most recently, bank burglars have used our financial system to move their profits into the regime’s offshore bank accounts, or into casinos. For years, the U.S. Treasury Department had to fight Pyongyang’s abuse of the financial system with its hands cuffed behind its back by the State Department, which sought a deal with Pyongyang at almost any cost. But yesterday, in a move that was at least...

Global wave of bank burglaries should revive calls to kick N. Korea out of SWIFT

In recent weeks, I’ve watched with keen interest, and some schadenfreude, as news reports have implicated Pakistani and North Korean hackers in a series of massive bank burglaries involving as many as 12 banks around the world, starting with the theft of $81 million (or $101 million, depending on which report you believe) from the Bangladesh Bank’s account in the U.S. Federal Reserve. These burglaries did not involve guns or ski masks. They were something more like armored car burglaries,...

N. Korea sanctions update: I sense a great disturbance in the force, as if billions of dollars cried out in terror and were suddenly frozen.

[First, thank you for your patience with the light blogging recently. Most of my limited spare time has been consumed by a project that must take a higher priority than this site. That project has been perpetually at the verge of completion for weeks now, but should be done soon.] North Korea’s fourth nuclear test in January was a watershed in sanctions law and policy. Until then, the U.S. and the U.N. had mostly pretended to have tough sanctions against North...

The Panama papers, Pyongyang, and Nigel Cowie

Here at OFK, we keep a running list of gullible foreigners who’ve tried to get rich in North Korea, justified their support for its regime as ways to reform and open it to global commerce, and instead met the same fate as Hyundai Asan, Volvo, Yang Bin, David Chang and Robert Torricelli, Chung Mong-Hun, Roh Jeong-ho, and Orascom’s Naguib Sawaris, who I predicted back in 2008 would “eventually meet the same fate.” Regulators should require securities issuers to disclose their investments in North Korea...

N. Korea’s restaurants, rumored to be involved in money laundering, are closing down.

North Korea’s overseas restaurants are not a significant percentage of its GNP,* but they are an important source of hard currency for Kim Jong-un. As early as 2008, one writer estimated that each restaurant remitted between $100,000 and $300,000 to Pyongyang each year. As of February of this year, there were 130 of them earning $100 million annually. Since then, the South Korean government has told its citizens to stop patronizing the restaurants, and business has fallen dramatically: On some...

North Korean diplomats behaving badly

If you’re a North Korean diplomat, a good general rule is that all publicity is bad publicity. Over the last two weeks, North Koreans, most of them diplomats or former diplomats, have attracted much publicity of the kind they couldn’t have wanted. The Chinese government reports that “a North Korean consular official” killed two Chinese citizens while driving home drunk in Dandong last month. The North Korean diplomat was on his way home from an “event celebrating North Korea’s launch...

U.S. will announce new North Korea sanctions as early as this week.

At this event at the Heritage Foundation yesterday, I emphasized that U.S. and U.N. sanctions are mutually complementary, and that for the U.N. sanctions to work, the U.S. must show its determination to back them with the new authorities in H.R. 757, and by harnessing the power of the dollar. The signs I’m seeing this week all suggest that the Obama Administration finally gets this. On Monday, President Obama said “that effective enforcement of sanctions on North Korea is one of the key tasks...

HSBC freezes “at least” $87M in assets of North Korea-linked Chinese tycoon

You all remember Sam Pa, right? He’s the Chinese ex-spy with a history of dubious business dealings in Africa, for which he was eventually sanctioned by the Treasury Department. Pa’s 88 Queensway group also had dealings with Korea Daesong General Trading Corporation, a financial arm of North Korea’s Bureau 39, for which he was not designated. Today, this happened: HSBC has frozen more than $87m in accounts linked to a Chinese tycoon behind several multibillion-dollar deals in Africa, while it investigates allegations of...

U.N. report: Bank of China told shipper in illegal arms deal to hide N. Korean links

Today, the U.N. Panel of Experts monitoring (non-)compliance with its North Korea sanctions released its latest report, and it’s a doozy. Including exhibits, it’s almost 300 pages long, and the substance should be material for several posts. Our first installment comes from the December 2015 conviction of Chinpo Shipping over the 2013 Cuba arms shipment. Remember last July, when I asked, “What about the Bank of China?” Well, we have our answer, and from the look of it, the Bank of...

Singapore shipper guilty of funding illegal N. Korean arms deal through Bank of China

In 2013, Panamanian authorities seized a huge haul of surplus Cuban weapons, including MiG fighters and surface-to-air missiles, aboard a North Korean ship at the entrance to the Panama Canal. Multiple U.N. Security Council resolutions prohibit North Korea from buying or selling most weapons, so the Cuban stevedores covered the weapons with sacks of sugar. An investigation by the U.N. Panel of Experts found that a North Korean shipper, Ocean Maritime Management (OMM), owned the ship, and that the regrettably named, Singapore-based Chinpo Shipping handled the financial transactions...

Sam Pa, 88 Queensway, KKG & Bureau 39: A case study in how China helps N. Korea evade sanctions

Last week, I highlighted Andrea Berger’s excellent post at 38 North, calling for the U.N. Security Council to sanction North Korea’s third-party enablers. Berger named some of those enablers, but I’d like to name another one of the most important ones — the Hong Kong-based 88 Queensway Group, headed by one Sam Pa, also known by his birth name “Xu Jinghua” or any of “at least eight aliases,” each with its own matching passport. According to multiple news reports, Pa has extensive connections to Chinese politicians, and with its intelligence services....