The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has sanctioned a Chinese IT company, its Russian counterpart and its North Korean CEO, targeting revenue repatriated to North Korea (‘DPRK’) through overseas IT workers (13 September). The repatriation of income by DPRK nationals is prohibited under Executive Order 13722 and also United Nations Security Council (‘UNSC’) Resolution 2397 adopted in December 2017, as the funds are believed to contribute significantly to Pyongyang’s nuclear and ballistics weapons programmes. Involvement in the North Korean IT industry is also prohibited by Executive Order 13810.
OFAC states that Yanbian Silverstar Network Technology Co (‘China Silver Star’) and its affiliated Russia-based company Volasys Silver Star are ‘managed and controlled by North Koreans.’ CEO Jong Song Hwa is designated for his connections with China Silver Star.
The sanctions follow the release of a joint Supply Chain Advisory on 23 July by the US departments of State, Treasury and Homeland Security highlighting the elevated risk of North Korean labour in the IT industry. ‘Businesses should closely examine their entire supply chain(s) for North Korean laborers and goods, services, or technology, and adopt appropriate due diligence best practices. This especially applies to those businesses with operations in high-risk countries, or who operate in high-risk industries’, says the Advisory.
The Supply Chain Advisory can be found here:
OFAC’s Notice can be found here:
Treasury’s press release can be found here: