U.S. Blacklists Two Executives for Alleged Oil Trade with North Korea
The U.S. Treasury has blacklisted three companies, two executives and one ship for alleged involvement in violating sanctions on North Korea.
The Treasury's Office of Foreign Asset Control (OFAC) has designated the Taiwan-based executive Huang Wang Ken, his wife Chen Mei Hsiang, the Taiwan-based businesses Jui Pang Shipping and Jui Zong Ship Management, and the Hong Kong-based company Jui Cheng Shipping under U.S. sanctions on North Korea.
In addition, OFAC has blacklisted the tanker Shang Yuan Bao, which allegedly has connections to all of the companies and individuals named. In October 2018, the UN Security Council’s 1718 Committee included the Shang Yuan Bao in a port entry ban and designated it for deflagging in response to its involvement in illicit ship-to-ship transfers with North Korean-flagged vessels. The committee asserted that the vessel had likely transferred oil to North Korean ships on two occasions - first to the vessel Paek Ma on May 18, 2018 and again to the vessel Myong Ryu 1 on June 2, 2018.
OFAC alleges that Huang Wang Ken, the CEO and largest shareholder in Jui Pang Shipping, worked with others to use the Shang Yuan Bao to transport 450,000 gallons of petroleum products to the blacklisted tanker Paek Ma. The agency alleges that Huang falsely listed the destination of the cargo as the Philippines, then directed the vessel to rendezvous with the Paek Ma in international waters.
Huang's wife, Chen Mei Hsiang, is a member of the board of directors of Jui Pang Shipping and the director and sole owner of Jui Zong Ship Management - the vessel's registered ship manager.
The designations mean that any U.S. asset connected to the named entities must be blocked and reported to OFAC. It also means that in general, U.S. entities may not do business with these individuals and companies without risking exposure to sanctions.
According to the Treasury and the U.S. State Department, ship-to-ship transfers are a critical lifeline for North Korea in meeting domestic demand for petroleum. Under UN sanctions on Pyongyang's nuclear program, petroleum exports to North Korea are capped at a level far below the nation's ordinary import volume. International monitoring efforts conducted by the U.S., Japan and the UK have detected significant ship-to-ship transfer activity for the purpose of sanctions evasion in international waters off China.