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Financial Services Law Insights and Observations

DOJ fines company for circumventing North Korean sanctions

Financial Crimes DOJ Of Interest to Non-US Persons Anti-Money Laundering

Financial Crimes

On August 31, the DOJ announced that a company operating in South East Asia has pleaded guilty to “conspiring to launder monetary instruments in connection with evading sanctions on North Korea and deceiving correspondent banks into processing U.S. dollar transactions.” The company admitted and accepted responsibility for the criminal conduct and will pay a $673,714 fine. According to the DOJ, from at least February 2017 until at least May 2018, the company’s dual invoicing practices and false statements concealed the purchase of commodities for North Korean customers, leading to U.S. correspondent banks processing U.S. dollar transactions that would otherwise not have been authorized. Among other things, the company and its co-conspirators admitted to using front companies to “conceal the North Korean nexus,” including utilizing financial cutouts and falsifying shipping records. These actions, the DOJ stated, circumvented the U.S. correspondent banks’ sanction and anti-money laundering filters, which are designed to prevent banks from processing wire transfers on behalf of customers located in North Korea. In addition to paying the financial penalty, the company has agreed to “implement rigorous internal controls” and cooperate fully with the DOJ.

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