OFAC Sanctions Russian Entity for Helping North Korea Evade Sanctions

The Treasury’s Office of Foreign Assets Control sanctioned Russian Financial Society, a Russian financial services entity, after OFAC said it helped North Korea evade U.S. sanctions, Treasury said in a June 19 press release. Russian Financial Society provided or attempted to provide “financial, material, technological, or other support for” U.S.-sanctioned Dandong Zhongsheng Industry & Trade Co. Ltd, the press release said. Dandong Zhongsheng is owned by Foreign Trade Bank, North Korea’s “primary foreign exchange bank,” which is sanctioned by both the U.S. and the United Nations, Treasury said.

Treasury said Russian Financial Society began doing business with North Korea “immediately” after receiving its “non-banking credit organization license,” which allows it to complete transactions in “multiple foreign currencies.” Russian Financial Society opened bank accounts for Dandong Zhongsheng and the chief representative for Korea Zinc Industrial Group, which was previously designated by OFAC for operating in the North Korean mining industry, the press release said.

Russian Financial Society opened “multiple” bank accounts for Dandong Zhongsheng in 2017 and 2018, allowing North Korea to avoid U.S. and UN sanctions, Treasury said. The accounts also allowed North Korea access to the “global financial system in order to generate revenue for the Kim regime’s nuclear program,” according to the press release.

Han Jang Su, who was previously designated by both the U.S. and the UN Security Council, served as the Foreign Trade Bank's “chief representative” in Moscow, the press release said. Treasury said he played a “key part” in securing banking services from Russian Financial Society.

The announcement bans any U.S.-based deals with Russian Financial Society. “Treasury continues to enforce existing U.S. and UN sanctions against individuals and entities in Russia and elsewhere who facilitate illicit trade with North Korea,” Undersecretary for Terrorism and Financial Intelligence Sigal Mandelker said in a statement. “Those who attempt to circumvent our authorities to provide [North Korea] with access to international financial markets expose themselves to significant sanctions risk.”