Financial Crime World

US Slaps Financial Sanctions on North Korean Entities and Individuals

The United States has taken action against three entities and two individuals linked to North Korea’s weapons of mass destruction and ballistic missile programs by imposing financial sanctions.

Designated Entities

Two companies, Chilsong Trading Corporation and Korea Paekho Trading Corporation, have been designated as agencies, instrumentalities or controlled entities of the North Korean government. The US Treasury Department’s Office of Foreign Assets Control (OFAC) accused them of being involved in illicit revenue generation.

  • Chilsong is alleged to be a front for the North Korean government, earning foreign currency and collecting intelligence.
  • Paekho has been generating funds for the regime since the 1980s by conducting art and construction projects on behalf of Middle Eastern and African governments.

Designated Individuals

Two individuals, Hwang Kil Su and Pak Hwa Song, were also sanctioned for their role in establishing a company in the Democratic Republic of Congo to earn revenue from construction and statue-building projects with local governments. The company, Congo Aconde SARL, was accused of being a front company for Paekho and had opened US dollar-denominated accounts at a Cameroonian bank.

Previous Designations

The European Union has previously designated Chilsong, Paekho, Pak, and Hwang for their involvement in sanctions evasion and support for North Korea’s nuclear and ballistic missile programs.

Consequences of the Sanctions

As a result of the sanctions:

  • All property and interests in property of the individuals and entities named above that are in the United States or in the possession or control of US persons are blocked and must be reported to OFAC.
  • The sanctions prohibit any transactions with the designated individuals and entities, and could expose foreign financial institutions that facilitate significant transactions with them to correspondent or payable-though account sanctions.

Aim of the Sanctions

The sanctions aim to bring about a positive change in North Korea’s behavior, rather than punishing it.