US Charges Chinese Companies for Money Laundering on Behalf of North Korea

November 29, 2018 Updated: November 29, 2018

U.S. federal prosecutors are charging two Chinese-based companies and one Singapore-based firm for money laundering on behalf of North Korean banks, in violation of U.S. sanctions.

Prosecutors have filed a complaint in federal court to forfeit more than $3 million from these companies, according to a Nov. 27 press release by the U.S. Department of Justice.

The three companies were part of a sophisticated global money laundering network, consisting of front companies and North Korean banks, that moved North Korean money through the United States in a scheme to help procure goods for the North Korean regime, the prosecutors allege.

Apex Choice is purportedly a paraffin wax exporter headquartered in Hong Kong, while Yuanye Wood is purportedly a wood sales company headquartered in the southern coastal city of Wenzhou in China, according to the court complaint. The Singapore company was not named by prosecutors.

The three firms laundered payments to companies that the U.S. Treasury Department had previously sanctioned for conducting business with North Korea, including Dandong Zhicheng, which bought coal from North Korea and later laundered the money to purchase nuclear or ballistic missiles that were part of the regime’s testing program, according to the complaint.

The unnamed Singaporean company has admitted that it was directed by an unauthorized Chinese money remitter to send payments to North Korean companies.

Prosecutors allege that Apex Choice paid numerous North Korean front companies with no relation to the wax industry. Meanwhile, Yuanye Wood purchased wood from a North Korean wood exporting company. The wood was made by North Koreans detained in forced labor camps.

“This case demonstrates that we will seek significant remedies to address companies that violate U.S. national security, regardless of where they are doing business,”  U.S. Attorney Jessie K. Liu said in the press release.

China is North Korea’s largest trading partner. Back in August, the U.S. administration also sanctioned a Chinese and Russian firm for facilitating illicit shipments on behalf of North Korea, including alcohol, tobacco, and cigarettes.

And earlier in the year, Japan and other governments have detected on several occasions Chinese vessels making illegal oil transfers to North Korean ships.

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