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U.S. warns of North’s evasion of UN sanctions

Three agencies detail tactics for getting around restrictions
July 25,2018
U.S. government agencies issued an advisory on Monday calling for the enforcement of North Korean sanctions and warning of evasion tactics used by the regime, signaling that Washington is not letting up on its pressure campaign to get Pyongyang to denuclearize.

The 17-page advisory issued jointly by the U.S. Department of State, Department of the Treasury and Department of Homeland Security notes that American and United Nations (UN) sanctions impose restrictions on trade with North Korea and the use of North Korean labor, which could potentially impact a company’s supply chain operations.

It highlights evasion tactics used by North Korea that could expose businesses - including manufacturers, buyers and service providers - to sanctions compliance risks under U.S. or UN sanctions authorities.

The advisory listed primary sanctions compliance risks as the inadvertent sourcing of goods, services or technology from the North and the presence of North Korean nationals in companies’ supply chains. North Korean overseas workers - sent to work in industries including apparel, construction, hospitality, IT services, logging, restaurants, seafood processing, textiles and shipbuilding - are seen as sources of foreign exchange for the cash-strapped regime and are restricted by UN sanctions.

It warned that “remittances support the North Korean government’s weapons of mass destruction (WMD) and ballistic missile programs.”

The advisory points out that the origins of North Korea exports, such as seafood, could be disguised and identified as that of a third country. It specifically referred to garments manufactured in North Korea as being labeled as “Made in China.”

It added, “China and Russia continue to host more North Korean laborers than all other countries and jurisdictions combined,” listing them alongside 40 other countries that are still hiring North Korean workers in violation of UN sanctions.

The notice also listed nearly 240 joint ventures with North Korea, many of them involving China, adding that such projects with North Korea are generally prohibited under UN Security Council Resolution 2375.

Individuals who violate U.S. sanctions with respect to North Korea “can be subject to civil monetary penalties equal to the greater of twice the value of the underlying transaction or $295,141 per violation, referred for criminal prosecution, or both,” it further details. The advisory will be published in Chinese, French, Korean, Russian, and Spanish.

The State Department in a statement clarified, however, that Washington “does not impose new sanctions on North Korea” and “remains committed” to the joint statement signed by U.S. President Donald Trump and North Korean leader Kim Jong-un on June 12 in Singapore.

However, it reverted to language from its maximum pressure campaign on the North amid speculation that Kim has been engaging in delaying tactics following the summit.

“As the president has said, sanctions will be enforced and remain in effect,” the statement continued. “The international community cannot let up on pressure until the DPRK denuclearizes,” referring to the acronym for North Korea’s official name, the Democratic People’s Republic of Korea.

U.S. Secretary of State Mike Pompeo in a visit to the UN Security Council in New York Friday, where he also met with South Korean Foreign Minister Kang Kyung-wha, called for sanctions to be fully enforced and for a “crack down” on evasions including illegal ship-to-ship transfers and the smuggling of coal by sea.

BY SARAH KIM [kim.sarah@joongang.co.kr]