UN Report Reveals Clandestine Coal Trade Scheme Involving North Korea and Chinese Company
UN Uncovers Complex Web of Transactions Enabling Pyongyang’s Profit Retention
A recent United Nations report has shed light on a secretive coal trade scheme involving a Chinese company that imports coal from North Korea without prepaying for it and resells it to customers worldwide. The scheme, uncovered by the UN, involves a complex web of transactions that enable the regime in Pyongyang to retain profits from the sale of its coal.
Scheme Involves Dandong Zhicheng, a Chinese Company
According to a complaint filed by the US Department of Justice against Dandong Zhicheng, the company imports North Korean coal without paying for it upfront. Instead, it resells the coal to customers around the world and retains the proceeds, including the money owed to North Korea.
UN Report Highlights Lack of Online Presence and Regulatory Failures
The UN report highlights a lack of online presence by companies involved in illicit North Korean activities, as well as a failure by US financial institutions to comply with regulatory obligations aimed at preventing the financing of such activities.
- The report emphasizes the importance of due diligence by US financial institutions
- Cites regulations that prohibit correspondent accounts involving North Korean banks and require special measures to prevent transactions involving these banks
Growing Concerns Over Chinese Companies’ Role in Enabling North Korea’s Nuclear Program
The regime has been accused of using illicit activities, including coal sales, to generate revenue for its military and nuclear programs. The case highlights the need for greater transparency and cooperation between governments, financial institutions, and the private sector to combat illegal activities and prevent the financing of terrorism and other illicit activities.
Financial Regulators Issue Guidelines for US Institutions
In response to the report, financial regulators have issued guidelines urging US institutions to be vigilant in monitoring transactions involving North Korean entities and to share information with one another to prevent suspicious activity. The case serves as a reminder of the importance of international cooperation in combating illegal activities and preventing the financing of terrorism.