The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) today sanctioned two individuals and three entities for supporting North Korea's continued development of its weapons of mass destruction (WMD) and ballistic missile programs, in violation of multiple U.N. Security Council resolutions (UNSCRs). Since the beginning of the year, North Korea has conducted 11 ballistic missile launches, most recently on March 4, 2022 (U.S. Eastern Standard Time). Today's action targets a group of foreign individuals and companies in Russia that are helping as procurement agents related to North Korea's defense industry; many of these activities also violate the UN ban on North Korea.
"North Korea's continued ballistic missile launches in flagrant violation of international law pose a serious threat to global security," said Deputy Treasury Secretary for Terrorism and Financial Intelligence Brian Nelson. "Today's action addresses this threat by targeting a network of Russian individuals and entities complicit in helping North Korea procure components for its illicit ballistic missile system. The United States will continue to implement and enforce existing sanctions to compel North Korea to return to the path of diplomacy and abandon its pursuit of weapons of mass destruction and missiles."
Sourcing activities in Russia
On January 24, 2018, OFAC designated 10 representatives of the U.S.- and UN-designated Ryonbong General Corporation (Ryonbong) of South Korea, including its representative in Vladivostok, Russia, Pak Kwang Hun. Ryonbong specializes in procurement for North Korea's defense industry and supports Pyongyang's military related sales. Its procurement may also support North Korea's chemical weapons program.
Since his appointment, Pak Kwang Hun has continued his operations in Russia as a procurement officer in Vladivostok, DPRK. During this time, the Russian company Apollon OOO and its director Alexander Andreevich Gayevoy assisted Pak Kwang Hun in his procurement efforts. Specifically, Pak Kwang Hun assumed the name and posed as an Apollon employee, possibly to deceive his suppliers as to the true end-user of the items he was purchasing through the company. OFAC designated Apollon under EO 13687 as substantially assisting, sponsoring, or providing financial, material, or technical support, or goods or services to or in support of Pak Kwang Hun.
Gayevoy, as a director and majority shareholder of Apollon, not only authorizes Pak Kwang Hun to act on behalf of the company, but is also actively involved in the procurement efforts of North Korea. OFAC designated Gayevoy to act directly or indirectly for or on behalf of Apollon pursuant to EO 13687.
Pak Kwang Hun, with the help of its director Aleksandr Aleksandrovich Chasovnikov (Chasovnikov), also conducts procurement efforts through the Russian company Zeel-M Co. In addition to supporting Park Kwang Hun, Chasovnikov coordinated the procurement and shipment of various items for other DPRK government agencies. At times, Zeel-M paid for Russian port services for DPRK vessels, and Chasovnikov himself was involved in coordinating ship-to-ship transfers involving DPRK vessels.
OFAC designated Chasovnikov under EO 13687 as having provided substantial assistance, sponsorship, or financial, material, or technical support, or goods or services to or in support of the DPRK Government. In addition, under EO 13687, OFAC designated Zeel-M and another Russian company, RK Briz, OOO, as owned or controlled by Chasovnikov.
Impact of Sanctions
As a result of today's action, all property and interests in property of persons and entities in the United States or owned or controlled by U.S. persons must be blocked and reported to OFAC. OFAC's regulations generally prohibit all transactions involving any property or interest in property of a blocked or designated person by or within the United States (including transactions in transit through the United States).
In addition, persons who engage in certain transactions with individuals or entities designated today may themselves be subject to designation. In addition, any foreign financial institution that knowingly facilitates a significant transaction or provides significant financial services to any person or entity designated today may be subject to U.S. correspondent or payable account sanctions.
The power and integrity of OFAC sanctions stems not only from its ability to designate and add people to the SDN list, but also from its willingness to legally remove people from the SDN list. The ultimate goal of sanctions is not to punish, but to bring about positive changes in behavior. For information on the process for seeking removal from the OFAC list, including the SDN list, see OFAC's FAQ 897. for more information on the process for submitting a request to be removed from the OFAC Sanctions List.
For information on identifying individuals subject to sanctions today, please click here.