Tuesday, July 28, 2015

US Authorities Stamp Down on Illicit Shipping Interests Which Supply North Korea

You Can Run - But You Can't Hide - Even Aliases Don't Protect Criminals
Shipping News Feature

US – SINGAPORE – NORTH KOREA – The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has blacklisted Singapore based ocean freight company, Senat Shipping, along with its President, and blocked a vessel in which the company has an interest, over suspected ties to a previously sanctioned North Korean shipping company involved in illicit arms transfers, most notably the freighter Chong Chon Gang which was seized by Panamanian authorities in 2013.

The OFAC’s sanctions were made pursuant to Executive Order (EO) 13551, which blocks the property of persons who, among other things, have attempted to import arms or related material into North Korea or have provided support for such activities or to other persons designated under this EO. As a result of the actions, any property interests of the designated persons within US jurisdiction must be frozen. Also, transactions by anyone within the United States involving the property of designated persons (including in this case the identified vessel) are generally prohibited. 

In July 2014, the United States and the United Nations (UN) imposed sanctions on OMMC, a shipping company that attempted to import a concealed shipment of arms and related materiel into the North Korea. As a response, the OFAC last week blacklisted Senat for providing material support to OMMC. The ‘extensive support’ provided to OMMC included arranging the purchase, repair, certification, and crewing of OMMC vessels. OFAC also designated Senat’s President, Leonard Lai, for providing material support to, and acting for, or on behalf of Senat. Also, OFAC identified the Mongolian flagged general cargo vessel Dawnlight, as property of Senat.

In addition to these 'designations', OFAC also updated the entries on its Specially Designated Nationals and Blocked Persons List (SDN List) to include known aliases for OMMC and two Tanchon Commercial Bank officials. Tanchon Commercial Bank is known as the primary financial facilitator of North Korea’s ballistic missile program. Acting Under-Secretary for Terrorism and Financial Intelligence Adam Szubin, said:

“Arms shipments transported by OMMC serve as a key resource for North Korea's ongoing proliferation activities. Sales from these shipments contribute to North Korea's other illicit programmes. We are working to make it as challenging as possible for North Korea to continue its unlawful behaviour by actively targeting anyone or any business that supports these illicit arms transfers.”

Since its designation in July 2014, OMMC has continued to operate through multiple front companies and representative offices to evade sanctions. OMMC's headquarters in Pyongyang, North Korea created aliases, such as Haeyang Crew Management Company and Korea Mirae Shipping Company Ltd, to evade sanctions. For this reason these two companies are also being added to OMMC’s SDN List entry as alternative names for OMMC.

Moves against Kim Tong-Myo’ng and Ra Ky’ong-Su were initially designated under EO 13382, an authority aimed at freezing the assets of proliferators of weapons of mass destruction and their supporters. Kim is said to be actively working for Tanchon Commercial Bank and travels under an alias. Ra is also apparently actively working for Tanchon Commercial Bank and also uses an alias. For this reason, new aliases for both Kim and Ra are being added to their respective SDN List entries as alternative names.

Photo: A dockworker, deep in the hull of the Chong Chon Gang walks atop the roof of a container found hidden under hundreds of bags of sugar. The official reason for the search was to check for drugs but the concealed box was subsequently found to be carrying products with military weaponry applications.