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American ShipperShippingTrade and Compliance

U.S. adds shipping companies to North Korean sanctions

The Treasury Department’s Office of Foreign Assets Control has added another 27 shipping companies, along with 28 vessels, to its Specially Designated Nationals List in an effort to prevent North Korea from circumventing U.S. and U.N. economic sanctions.

   The Treasury Department’s Office of Foreign Assets Control (OFAC) on Feb. 23 added another 27 shipping companies, along with 28 vessels, to its Specially Designated Nationals (SDN) List in an effort to prevent North Korea from further circumventing U.S. and U.N. economic sanctions.
   “Treasury is aggressively targeting all illicit avenues used by North Korea to evade sanctions, including taking decisive action to block the vessels, shipping companies, and entities across the globe that work on North Korea’s behalf,” said U.S. Treasury Secretary Steven Mnuchin in a Feb. 23 statement. “This will significantly hinder the Kim regime’s capacity to conduct evasive maritime activities that facilitate illicit coal and fuel transports, and erode its abilities to ship goods through international waters.”
   The Treasury Department said the designations are in line with the 2016 North Korea Sanctions Policy and Enhancement Act and the 2017 Countering America’s Adversaries Through Sanctions Act, which allow for the inclusion of shipping and vessel-related services to be included among the U.S. sanctions against North Korea.
   Specifically added in this latest round of North Korea sanctions are third-country shipping companies and their vessels, which have transported coal from North Korea in violation of U.N. and U.S. sanctions. North Korea is known to use payments for coal exports to fund its weapons programs.
   The coal-transport vessels placed on the SDN list include: the Hua Fu, Oriental Treasure, Asia Bridge 1, Dong Feng 6, Hao Fan 2, Hao Fan 6, Xin Guang Hai, Koti and Yuk Tung.
   The related shipping companies also placed on OFAC’s SDN list include: Shandong, China-based Weihai World-Shipping Freight and Shanghai, China-based Shanghai Dongfeng Shipping Co Ltd; Hong Kong-based shipping companies Liberty Shipping Co Ltd, Chang An Shipping & Technology, Hongxiang Marine Hong Kong Ltd., Shen Zhong International Shipping Ltd., and Huaxin Shipping HongKong Ltd.; Singapore-based Yuk Tung Energy Private Limited; and Panama-based M.T. Koti Corp.
   Taiwan citizen Tsang Yung Yuan has been added to OFAC’s SDN list for allegedly coordinating North Korean coal exports with a Russian-based North Korean broker. OFAC also designated two entities, Taiwan-based Pro-Gain Group Corporation and Taiwan and Marshall Islands-based Kingly Won International Co., Ltd., for being owned or controlled by Tsang.
   Treasury said that in 2017, Tsang and Kingly Won attempted to engage in an oil deal valued at more than $1 million with the Russian firm Independent Petroleum Co., which OFAC added to its sanctions for operating in the energy industry in the North Korean economy.
   OFAC also designated 16 North Korean shipping companies and 19 North Korea-flagged vessels:
     • Chonmyong Shipping Co. Ltd and its oil tanker Chon Myong 1.
     • Hapjanggang Shipping and its crude oil tanker Nam San 8 and general cargo ship Hap Jang Gang 6.
     • Korea Achim Shipping Co. and its products tanker Chon Ma San.
     • Korea Ansan Shipping Co. and its chemical tanker An San 1.
     • Korea Unpha Shipping & Trading and its products tanker Kum Gang 3.
     • Korea Myongdok Shipping and its products tanker Yu Phyong 5.
     • Korea Samjong Shipping, its crude oil tanker Sam Jong 1, and its chemical/oil products tanker Sam Jong 2.
     • Korea Samma Shpg Co. and its oil products tanker Sam Ma 2.
     • Korea Yujong Shipping Co. Ltd. and its oil products tanker Yun Jong 2.
     • Paekma Shipping Co. and First Oil JV Co. Ltd. and their oil products tanker Paek Ma.
     • Phyongchon Shipping & Marine, its bunkering tanker Ji Song 6, and its general cargo ships the Ji Song 8 and Woory Star.
     • Pochon Shipping & Management and its products tanker Po Chon.
     • Songwon Shipping & Management and its products tanker Song Won.
     • Tonghung Shipping & Trading Co. and its oil products tanker Tong Hung 5.
     • Myohyang Shipping Co. and its products tanker Yun Son.
   In addition to sanctions, OFAC, the State Department and Coast Guard issued a global shipping advisory to alert the shipping industry about North Korea’s “deceptive” shipping practices. These include the use of falsifying and concealing information displayed on North Korean vessels and conducting ship-to-ship transfers, a practice prohibited by U.N. Security Council Resolution 2375 of Sept. 11, 2017.

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Chris Gillis

Located in the Washington, D.C. area, Chris Gillis primarily reports on regulatory and legislative topics that impact cross-border trade. He joined American Shipper in 1994, shortly after graduating from Mount St. Mary’s College in Emmitsburg, Md., with a degree in international business and economics.
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