The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has imposed sanctions on two individuals and four entities for generating illicit revenue for the Democratic People's Republic of Korea (DPRK). These actions are part of efforts to disrupt networks that finance North Korea's weapons programs.
According to OFAC, North Korea deploys thousands of skilled IT workers globally to generate revenue while circumventing U.S. and UN sanctions. These workers conceal their identities to secure freelance contracts worldwide, with the DPRK government withholding up to 90% of their earnings. This practice generates significant funds for the regime's weapons programs, including those involving weapons of mass destruction and ballistic missiles.
Bradley T. Smith, Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence, stated: "The DPRK continues to rely on its thousands of overseas IT workers to generate revenue for the regime, to finance its illegal weapons programs, and to enable its support of Russia’s war in Ukraine."
The sanctioned network includes a DPRK government weapons-trading department known as Department 53, two front companies employing DPRK IT workers in Laos, two leaders from these companies, and a Chinese company supplying electronics equipment.
Department 53 is involved in selling advanced conventional weapons and military-grade communications equipment while using front companies in various sectors like IT and software development. It is designated under Executive Order (E.O.) 13687 as an entity controlled by the North Korean government or Workers' Party.
One front company, Korea Osong Shipping Co (Osong), employs DPRK IT workers in Laos who use aliases for projects such as cryptocurrency exchanges. Osong is designated under E.O. 13722 for exporting workers from North Korea.
Chonsurim Trading Corporation also directs DPRK IT workers in Laos using falsified credentials for global software development work. It faces similar designations under E.O. 13722.
Jong In Chol leads Chonsurim’s delegation in Laos, supporting the munitions sector exclusively with generated revenue. Son Kyong Sik serves as chief representative for Osong based in Shenyang, China.
Liaoning China Trade Industry Co., Ltd., a China-based company providing equipment to Department 53 for its overseas activities, is designated for materially assisting or supporting Department 53 under E.O. 13687.
These measures align with the North Korea Sanctions and Policy Enhancement Act of 2016 and subsequent amendments within FY 2020 National Defense Authorization Act.
As a result of these actions, all properties and interests belonging to these designated persons within U.S jurisdiction are blocked and must be reported to OFAC. Violations may lead to civil or criminal penalties against both U.S. and foreign persons involved in prohibited transactions with blocked entities.
OFAC emphasizes that sanctions aim not at punishment but at encouraging positive behavioral changes among sanctioned parties.
For more details on today's designations or information about removal processes from OFAC lists like the Specially Designated Nationals List, further resources are available online.
