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(2nd LD) Chinese nationals, company indicted in U.S. over N.K. sanctions evasion

North Korea 06:58 July 24, 2019

(ATTN: UPDATES with background, details in paras 4, 10-11)
By Lee Haye-ah

WASHINGTON, July 23 (Yonhap) -- Four Chinese nationals and a Chinese company have been indicted on charges of helping North Korean entities involved in the proliferation of weapons of mass destruction, the U.S. Department of Justice said Tuesday.

A federal grand jury in Newark, New Jersey, charged Chinese businesswoman Ma Xiaohong, her company, Dandong Hongxiang Industrial Development Co. Ltd. (DHID), and three of the company's top executives with violating sanctions and conspiring to defraud the U.S. and launder money, the department said in a statement.

The announcement comes as the U.S. has been negotiating the dismantlement of North Korea's nuclear weapons program, with working-level talks expected to resume in the coming weeks.

Washington has maintained that all sanctions on North Korea must be enforced until the complete denuclearization of the regime.

"Through the use of more than 20 front companies, the defendants are alleged to have sought to obscure illicit financial dealings on behalf of sanctioned North Korean entities that were involved in the proliferation of weapons of mass destruction," Assistant Attorney General for National Security John Demers said.

This Xinhua file photo shows the U.S. Department of Justice headquarters building in Washington. (Yonhap)

This Xinhua file photo shows the U.S. Department of Justice headquarters building in Washington. (Yonhap)

Citing the indictment, the department said the four Chinese nationals established front companies in offshore jurisdictions such as the British Virgin Islands and the Seychelles from December 2009 to September 2015, and opened Chinese bank accounts under the front companies' names at banks in China with "correspondent" accounts in the U.S.

The defendants then used these accounts to conduct U.S. dollar financial transactions for sales to North Korea, the department said.

"Any Chinese company conspiring to do business with sanctioned WMD proliferators through the U.S. banking system should think twice," Assistant Attorney General Brian Benczkowski of the department's criminal division said.

The indictment quoted by the department also stated that DHID's core business was trade with North Korea and that it allegedly openly worked with North Korea-based Korea Kwangson Banking Corporation before that company was sanctioned by the U.S. in August 2009 for providing U.S. dollar financial services to two other North Korean entities.

Those entities -- Tanchon Commercial Bank and Korea Hyoksin Trading Corporation -- have been sanctioned by the U.S. for their ties to the Korea Mining Development Trading Co., which the U.S. has described as North Korea's premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons.

The defendants face a maximum sentence of 20 years in prison for the most serious charge.

The charges were announced in September 2016. At the time, the U.S. Treasury Department imposed sanctions on DHID in the first such action by the U.S. against a Chinese company.


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