Web Alert: OFAC announces new North Korean sanctions
27 February 2018
On 23 February 2018, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) announced new sanctions against North Korea in order to further isolate the regime.
US OFAC advised that the North Korean shipping industry is a primary means by which North Korea evades sanctions in order to fund its nuclear weapons and ballistic missile programme. The U.S is targeting 55 shipping companies and vessels, which are registered across the globe, to hinder North Korea's capacity to facilitate illicit coal and fuel transports and its ability to ship goods through international waters.
These measures follow the North Korea Sanctions Policy Enhancement Act 2016 and the Countering America’s Adversaries Through Sanctions Act 2017 which prohibit certaint trades and the provision of shipping-related services. For more details, please refer to our previous web alerts dated 9, 14 August and 29 September 2017.
On the same day, US OFAC together with the U.S. Department of State and the U.S. Coast Guard issued an advisory to alert insurers, flag registries, shipping companies and financial institutions about Korea’s deceptive shipping practices and the significant sanctions risks if they enable the shipments of goods to or from North Korea.
Deceptive Shipping Practices
North Korea is known to deploy deceptive practices to disguise the identity of the vessels, the goods being shipped and the origin or destination of the cargo. These include but are not limited to:
⦁ Physically altering vessel identification;
⦁ North Korean Ship-to-Ship (STS) Transfers;
⦁ Falsifying cargo and vessel documents;
⦁ Disabling automatic identification system (AIS); and
⦁ Manipulating AIS.
⦁ Monitor for AIS manipulation;
⦁ Conduct research prior to STS transfers;
⦁ Review carefully all shipping documentation;
⦁ Ensure clear communication between parties in international transactions; and
⦁ Consult all available resources.
More details can be found on the U.S.Treasury Department's website here and here.
A full list of the designated entities and vessels can be found here.
Members who intend to trade with North Korea are advised to carefully consider the implications of doing so and to contact the club’s managers if they have any queries.