Treasury Sanctions Fraud Network Funding DPRK Weapons Applications

Network’s Scheme Harms American Businesses

WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Vitaliy Sergeyevich Andreyev, Kim Ung Sun, Shenyang Geumpungri Network Technology Co., Ltd, and Korea Sinjin Trading Corporation for his or her roles in a fraudulent data know-how (IT) employee scheme orchestrated by the Democratic People’s Republic of Korea (DPRK) authorities. 

“The North Korean regime continues to target American businesses through fraud schemes involving its overseas IT workers, who steal data and demand ransom,” mentioned Under Secretary of the Treasury for Terrorism and Financial Intelligence John Okay. Hurley.  “Under President Trump, Treasury is committed to protecting Americans from these schemes and holding the guilty accountable.”

Today’s motion expands on the designation of Chinyong Information Technology Cooperation Company, concentrating on further entities in its community and combatting its use of cryptocurrency for sanctions evasion.  These designations additionally construct on a number of different actions OFAC has taken within the final a number of months to cease the DPRK’s IT employee schemes, together with sanctions on July 8 and July 24.

This motion is a part of the United States’ whole-of-government effort to counter the DPRK’s wide-ranging income era schemes, in shut coordination with our allies and companions.  As a part of that collaboration, the Department of State and the overseas ministries of Japan and the Republic of Korea at the moment issued a joint assertion on the threats posed by DPRK IT employees.

DPRK IT WORKFORCE: REVENUE GENERATOR FOR THE REGIME

The DPRK makes use of IT employees to generate income for its illicit weapons of mass destruction and ballistic missile applications, in violation of U.S. and United Nations sanctions.  The groups of IT employees sometimes use fraudulent paperwork, stolen identities, and false personas to intentionally obfuscate their identities and infiltrate reliable corporations, together with within the United States and allied international locations.  The DPRK authorities claims nearly all of the wages earned by these abroad IT employees as a way to generate tons of of tens of millions of {dollars} for the regime’s weapons of mass destruction and ballistic missile applications.  In some circumstances, these DPRK employees have additionally clandestinely launched malware into firm networks to exfiltrate proprietary and delicate information. More details about the ways utilized by DPRK IT employees and steps that may be taken to guard non-public networks could be discovered within the January 23, 2025 Federal Bureau of Investigation Public Service Announcement, North Korean IT Workers Conducting Data Extortion.

Additional details about using IT employees to generate income for the DPRK could be discovered within the May 16, 2022 IT Worker Advisory, issued by the Departments of State, Treasury and Justice.  

OVerseas it employee community

OFAC’s motion at the moment designates an IT employee community that consists of a DPRK-based buying and selling firm, a Chinese entrance firm, and two people which have supplied monetary help as a way to generate income for the DPRK regime.

Vitaliy Sergeyevich Andreyev (Andreyev) is a Russian nationwide facilitating funds to U.S.-designated Chinyong Information Technology Cooperation Company (Chinyong), an entity related to the DPRK protection ministry that employs delegations of IT employees in Russia and Laos.  Since no less than December 2024, Andreyev has labored with Kim Ung Sun, a Russia-based DPRK financial and commerce consular official, to facilitate a number of monetary transfers value a complete of almost $600,000, by changing cryptocurrency to money in U.S. {dollars}. Andreyev is being designated pursuant to Executive Order (E.O.) 13687 for having materially assisted, sponsored, or supplied monetary, materials, or technological help for, or items or providers to or in help of, Chinyong, an individual whose property and pursuits in property are blocked pursuant to E.O. 13687.  OFAC is designating Kim Ung Sun pursuant to E.O. 13687 for having acted or purporting to behave for or on behalf of, instantly or not directly, the Government of North Korea.  

Shenyang Geumpungri Network Technology Co., Ltd (Shenyang Geumpungri) is a Chinese entrance firm for Chinyong, consisting of a delegation of DPRK IT employees. Since 2021, Shenyang Geumpungri’s delegation of DPRK IT employees has earned over $1 million in earnings for Chinyong and Korea Sinjin Trading Corporation (Sinjin).  Sinjin is a DPRK firm subordinate to the U.S.-sanctioned DPRK Ministry of People’s Armed Forces General Political Bureau.  The firm has obtained directives from DPRK authorities officers relating to the DPRK IT employees that Chinyong deploys internationally.  OFAC is designating Shenyang Geumpungri pursuant to E.O. 13687 for being owned or managed by, or having acted or presupposed to act for or on behalf of, instantly or not directly, Chinyong.  Sinjin is being designated pursuant to E.O. 13687 for being owned or managed by, or having acted or purporting to behave for or on behalf of, instantly or not directly, the Government of North Korea.   

SANCTIONS IMPLICATIONS

As a results of at the moment’s motion, all property and pursuits in property of the designated or blocked individuals described above which can be within the United States or within the possession or management of U.S. individuals are blocked and have to be reported to OFAC.  In addition, any entities which can be owned, instantly or not directly, individually or within the mixture, 50 p.c or extra by a number of blocked individuals are additionally blocked.  Unless approved by a normal or particular license issued by OFAC, or exempt, OFAC’s laws usually prohibit all transactions by U.S. individuals or inside (or transiting) the United States that contain any property or pursuits in property of blocked individuals.

Violations of U.S. sanctions could consequence within the imposition of civil or felony penalties on U.S. and overseas individuals. OFAC could impose civil penalties for sanctions violations on a strict legal responsibility foundation.  OFAC’s Economic Sanctions Enforcement Guidelines present extra data relating to OFAC’s enforcement of U.S. financial sanctions. In addition, monetary establishments and different individuals could threat publicity to sanctions for partaking in sure transactions or actions involving designated or in any other case blocked individuals. The prohibitions embody the making of any contribution or provision of funds, items, or providers by, to, or for the good thing about any designated or blocked particular person, or the receipt of any contribution or provision of funds, items, or providers from any such particular person.

Furthermore, partaking in sure transactions involving the individuals designated at the moment could threat the imposition of secondary sanctions on collaborating overseas monetary establishments.  OFAC can prohibit or impose strict situations on opening or sustaining, within the United States, a correspondent account or a payable-through account of a overseas monetary establishment that knowingly conducts or facilitates any important transaction on behalf of an individual who’s designated pursuant to the related authority.

The energy and integrity of OFAC sanctions derive not solely from OFAC’s means to designate and add individuals to the Specially Designated Nationals and Blocked Persons List (SDN List), but in addition from its willingness to take away individuals from the SDN List in step with the regulation. The final aim of sanctions is to not punish, however to convey a few optimistic change in habits.  For data regarding the course of for looking for removing from an OFAC record, together with the SDN List, or to submit a request, please check with OFAC’s steerage on Filing a Petition for Removal from an OFAC List. 

Click here for more information on the persons designated today.

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