US Sanctions North Korea Tech Firms Operating In Russia And China

A sign marks the U.S Treasury Department in Washington
The U.S. Treasury Department sanctioned tech firms operating in Russia and China on allegations that they are illicitly moving funds to North Korea. The sanctions included an individual who worked as CEO and consultant for the firms. (Photo: REUTERS/Brian Snyder)

The U.S. Treasury Department announced new sanctions against North Korea on Sept. 13 by blocking all businesses with the China-based China Silver Star, Russia-based company Volasys Silver Star,  and its CEO Jong Hwa. The United States accused them of moving illicit funding to North Korea and in effect violating the sanctions imposed against Pyongyang.

Under the Resolution 2397 of 2017, the United Nations Security Council acknowledged that generating profits from North Korean workers overseas is tantamount to contributing in Pyongyang's nuclear weapons and ballistic missile programs.

With the fresh sanction in place against these tech firms and one individual, any property or interests in property of the accused parties that would be found in possession or in control of parties based in the United States are blocked. Every persons or entity are prohibited from dealing with them moving forward.

In a statement, Treasury Secretary Steve Mnuchin said the government decided to impose the sanctions to stop the flow of illicit revenue to North Korea from overseas information technology workers disguising themselves as companies, representing themselves with aliases, and pretending to be third-party nationals.

The Treasury extends its warning to all IT industry, businesses, and individuals worldwide not to enter into any agreement or business deals with North Korea. The department cautioned against unwittingly sourcing tech services from deceptive North Korean firms.

As in the case at hand, the China Silver Star allegedly represented itself as a Chinese IT company but in reality is under the management of North Koreans. This company has reportedly acquired millions of dollars in revenue from projects with Chinese and other international companies.

In 2017, a North Korean IT employee from China Silver Star established Volasys Silver Star as a Russia-based company. This process cloaked the true nationalities of the North Korean workers that it employed, the Treasury explained. By 2018, these Volasys Silver Star employees earned hundred and thousands of dollars in under a year.

Jong Song Hwa, for his part, works as CEO for Volasys Silver Star and at the same time setting goals for China Silver Star.

The U.S. Treasury Department stressed that the government will continue to implement sanctions until it gets verifiable proof that Pyongyang has completed its full denuclearization as promised to the international community.

CNN stated that these new rounds of sanctions are the latest indication that the United States is serious about ending North Korea's nuclear and ballistic missile programs. White House officials who spoke with CNN revealed that there is no clear progress on Pyongyang's promised denuclearization.

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