US sanctions Chinese company for alleged support of North Korea

US sanctions Chinese company for alleged support of North Korea

Posted by John P. Bradford // September 27, 2016

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Dandong Hongxiang Industrial Development and four company officials charged for supporting nuclear weapons program and money laundering

The United States has announced criminal charges and economic sanctions against a Chinese company for alleged support of North Koreas nuclear weapons program.

The justice department said Dandong Hongxiang Industrial Development and four Chinese company officials also named in an indictment had conspired to evade US sanctions on North Korea, violated US regulations against support for designated weapons of mass destruction proliferators, and engaged in money laundering.

The department also moved to seize 25 bank accounts controlled by Dandong Hongxiang, on grounds that they represent property involved in money laundering.

In parallel the Treasury added the company and the four officials, Ma Xiaohong, Zhou Jianshu, Hong Jinhua, and Luo Chuanxu to its sanctions blacklist, which ban American individuals or companies, including especially financial firms, from doing business with them.

US officials said Dandong Hongxiang had acted on behalf of Korea Kwangson Banking Corporation, which has already been blacklisted by the US and UN for its support of North Koreas nuclear and other weapons efforts.

The charges and forfeiture action announced today allege that defendants in China established and used shell companies around the world, surreptitiously moved money through the United States and violated the sanctions imposed on North Korea in response to, among other things, its nuclear weapons program, said assistant attorney general Leslie Caldwell in a statement.

The move came after Chinese authorities also announced they were investigating the company, which is located in Dandong city in the north-east Liaoning province, on the border with North Korea.

Liaonings public security department said earlier this month that they have placed Dandong Hongxiang and its bosses under investigation for serious economic crimes involved in trade activities.

According to a report released last week by the Asan Institute for Policy Studies in Seoul and C4ADS in Washington, Dandong Hongxiang logged more than $530m in two-way trade with North Korea between 2011 and 2015.

The justice department said that Dandong Hongxiang had created and acquired a number of offshore front companies to process US dollar transactions through the US financial system on behalf of Korea Kwangson Banking between 2009 and 2015.

Read more: https://www.theguardian.com/us-news/2016/sep/26/us-sanctions-china-north-korea-dandong-hongxiang