"North Korea Launders Money Through US Banks Despite Sanctions"

$174.8 Million Transferred via Ghost Companies and Chinese Firms
Loopholes Persisted During 2008-2017 North Korea Sanctions Tightening

[Image source=AP Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Despite sanctions against North Korea, it has been revealed that North Korea has been laundering funds through various shell companies and with the help of Chinese companies, passing through American banks, according to a report by the US NBC network. It is estimated that over 100 million dollars have been remitted to North Korea over several years, raising concerns about loopholes in the sanctions against North Korea.

On the 20th (local time), NBC reported that between 2008 and 2017, a period when sanctions against North Korea were being strengthened, North Korea laundered money through major US banks. NBC stated that this report is part of an analysis of confidential documents obtained from the Financial Crimes Enforcement Network (FinCEN) under the US Treasury Department, in collaboration with the International Consortium of Investigative Journalists (ICIJ), the internet media BuzzFeed, and more than 400 journalists worldwide.

The confidential documents cover a period when the US was intensifying sanctions against North Korea's nuclear weapons and ballistic missile development, but it was found that the approved remittance amount through US banks, including JP Morgan and Bank of New York Mellon, exceeded 174.8 million dollars over several years. However, NBC reported that the exact period during which these transactions occurred and whether this represents the total scale of money laundering remain unclear.

NBC cited the case of Dandong Hongxiang Industrial Development and its representative Ma Xiaohong, a Chinese company already indicted by the US Department of Justice for financial transactions with North Korean entities subject to sanctions related to weapons of mass destruction (WMD) manufacturing. According to documents from Bank of New York Mellon, Ma and the company used a series of shell companies to send tens of millions of dollars through US banks, transferring funds to North Korea via China, Singapore, Cambodia, and the United States.

The documents indicated that funds flowed to companies appearing to be shell companies, with some registered in high-risk countries like Cambodia or lacking clear commercial reasons for the transactions. NBC pointed out that Ma publicly acknowledged doing business with North Korea in media interviews at the time, yet the bank allowed dozens of transfers.

Additionally, JP Morgan Chase Bank monitored transactions totaling 89.2 million dollars from 2011 to 2013 that benefited 11 companies and individuals linked to North Korea. These companies included Dandong Sanjiang Trade and Singapore's SUTL. According to global trade information provider Panjiva, Sanjiang Trade is known to have shipped to North Korea at least 80 times.

The reason North Korea could use US banks for money laundering is presumed to be because these banks provide correspondent banking services, which facilitate foreign exchange and other transactions for overseas banks. The US Treasury Department has pointed out that overseas illegal money launderers often use correspondent banking services to move funds, and that US financial institutions frequently process these transactions unknowingly, representing a significant vulnerability.

This content was produced with the assistance of AI translation services.