The U.S. Department of the Treasury's Office of Foreign Assets Control recently imposed sanctions on three entities for their involvement in a sanctions evasion network attempting to facilitate arms deals between Russia and the Democratic People's Republic of Korea. This action is part of the U.S. strategy to disrupt third-country actors supporting Russia's war against Ukraine, according to an Aug. 16 news release.
"The United States continues to root out illicit financial networks that seek to channel support from North Korea to Russia’s war machine," Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson said in the release. "Alongside our allies and partners, we remain committed to exposing and disrupting the arms trade underpinning Putin’s brutal war in Ukraine."
The entities in question are Limited Liability Company Verus (Verus), Defense Engineering Limited Liability Partnership (Defense Engineering) and Versor S.R.O. (Versor). This strategic move is a continuation of the ongoing U.S. strategy to identify, unveil and disrupt the endeavors of third-party actors endeavoring to provide support to Russia's aggressive conflict in Ukraine, the release reported.
As Russia persists in deploying weaponry and enduring losses of substantial military equipment on the battleground, it has found itself increasingly compelled to rely on a limited number of allies, among them the DPRK, to sustain its unjustified warfare in Ukraine. The Treasury has thus far imposed sanctions on numerous individuals and entities involved in sidestepping the international sanctions framework imposed on Russia, the release said.
The OFAC previously designated Slovakian national Ashot Mkrtychev (Mkrtychev) March 30 for his efforts to facilitate arms transactions between Russia and the DPRK, the release reported. Mkrtychev, through negotiations with officials from the DPRK and Russia, orchestrated potential plans to transfer over two dozen types of weaponry and munitions to Russia, in exchange for an array of goods, including raw materials and commodities, for the DPRK.
Mkrtychev, the president of Versor, founder and proprietor of Verus and the exclusive director of Defense Engineering, has coordinated with DPRK procurement officials and employed Versor as a conduit for negotiations with international companies, according to the release.
The designation of Versor, Verus and Defense Engineering by OFAC stems from actions pursuant to Executive Order 13551, which pertains to being owned, controlled by or purportedly acting on behalf of, either directly or indirectly, Mkrtychev, an individual subjected to E.O. 13551's sanctions, the release reported. This action has led to the blocking of all assets and interests in assets held by the designated individuals within the U.S., or within the control of U.S. individuals, which must be reported to OFAC.
Moreover, any entities owned, directly or indirectly, by 50% or more by one or more blocked individuals are also subject to sanctions. Except under the authorization of a general or specific OFAC-issued license, or exemption, dealings involving property or interests in property of designated or otherwise blocked persons by U.S. individuals or entities within the United States are typically prohibited by OFAC's regulations, the release said.
