On September 19, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control designated five entities and one individual who are members of a network that worked to evade sanctions and establish illegal payment mechanisms between Russia and the Democratic People’s Republic of Korea (“DPRK”). According to OFAC, the funds processed by the network have been used to support Russia’s illegal war against Ukraine and the DPRK’s unlawful weapons of mass destruction and ballistic missile programs. OFAC reported that the new designations target payment schemes orchestrated by the Foreign Trade Bank (“FTB”) and Korea Kwangson Banking Corporation (“KKBC”) two previously-designated DPRK state-run organizations. The new designees include TSMRBank, OOO that established a secret banking relationship with the FTB, and its vice president Dmitry Yuryevich Nikulin who allegedly organized the opening of correspondent accounts for FTB and KKBC and coordinated with DPRK representatives to facilitate the delivery of millions of dollars in rubles in banknotes for both organizations.
The sanctions were imposed under Executive Order 13722 for materially assisting the Government of North Korea or under EO 14024, as amended, for operating in Russia’s financial services sector. As a result of these designations, all property and interests in property of these designees within the United States or within the possession or control of a U.S. person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving a designated person. Entities owned 50 percent or more by one or more blocked persons are also blocked.
In addition to the new designations, OFAC also updated the Specially Designated Nationals List (“SDN List”) to include the following aliases used by KKBC to operate in Russia: DPRK Border Trade Settlement Bank, Border Trade Settlement Bank, and BTSB.