The US has filed a complaint against two Chinese shell companies it accuses of helping China’s ZTE Corporation sell US technology to North Korea in violation of US sanctions
US prosecutors are now seeking to forfeit nearly US$1 million from Ryer International and Rensy International, the firms that allegedly acted as intermediaries for ZTE’s exports of US-origin goods to North Korea.
The complaint also reveals that sanctions imposed on North Korea are not achieving the desired effect of marginalising the country’s financial system.
The US wants the two companies to forfeit US$955,881 to settle a complaint that says ZTE exported millions of US-origin parts to North Korea between 2010 and 2016, receiving payments in US dollars through intermediaries, Ryer and Rensy.
The complaint says the two companies negotiated purchase contracts, requested payments, and received the US-origin goods on behalf of ZTE’s North Korean customers.
Ryer’s proprietors also attempted to invest the proceeds of their activity in the EB-5 immigrant investor programme, which provides eligibility for permanent residence in the US according to the complaint.
It also says Ryer and Rensy acted as a conduit for North Korean money laundering through sanctioned North Korean financial institutions which, according to the complaint, appear to be able to operate satisfactorily despite US sanctions imposed on them.
The complaint points to a UN report describing how North Korean banks have been able to evade sanctions and continue to access the international banking system.
Financial networks intact
Specifically, the complaint says that North Korean networks are accessing formal banking channels by maintaining correspondent bank accounts and representative offices abroad that are staffed by foreign nationals making use of front companies.
These broad interwoven networks allow North Korean banks to conduct illicit procurement and banking activity the complaint concludes.
Categories: Trade Based Financial crimes News