<![CDATA[US charges 4 executives of Chinese company with evading North Korea sanctions and 'trading with WMD proliferators']>
Four Chinese nationals and the Chinese company they worked for have been indicted on charges of money laundering and violating weapons of mass destruction safeguards tied to the banned export of sensitive equipment to North Korea, the US Justice Department said on Tuesday.
Under an indictment handed down in Newark, New Jersey, the four each face up to 45 years in prison and US$1.75 million in fines.
The defendants are accused of using more than 20 front companies in Hong Kong and elsewhere to hide their "illicit financial dealings" on behalf of "sanctioned North Korean entities that were involved in the proliferation of weapons of mass destruction", John Demers, assistant attorney general for national security, said in a statement.
Charged were Ma Xiaohong, the owner of Dandong Hongxiang Industrial Development Co Ltd; the company's general manager, Zhou Jianshu; its deputy general manager, Hong Jinhua; and its financial manager, Luo Chuanxu.
Assistant US Attorney General John Demers speaks in Boston on April 5 during a discussion about the Department of Justice's efforts to combat Chinese economic espionage. Photo: EPA-EFE alt=Assistant US Attorney General John Demers speaks in Boston on April 5 during a discussion about the Department of Justice's efforts to combat Chinese economic espionage. Photo: EPA-EFE
The four executives are not in US custody and are believed to be in China, a Justice Department spokesman told Agence France-Presse.
Dandong Hongxiang's main activity involved trading with North Korea, and as part of that, it set up various accounts to do business with companies there, federal prosecutors said.
After 2005, the US government designated several of those North Korean businesses or close affiliates as sanctioned entities engaged in acquiring equipment, developing and otherwise trading in weapons of mass destruction (WMD).
One of the most powerful tools Washington has in sanctioning or otherwise punishing countries or organisations is use of the American financial system, which has enormous reach given the US dollar's global currency status. And it appears that Dandong Hongxiang's financial dealings " rather than evidence of the militarily sensitive equipment it traded in " form the heart of this case.
"Any Chinese company conspiring to do business with sanctioned WMD proliferators through the US banking system should think twice," said Assistant Attorney General Brian Benczkowski. "This indictment shows the department's resolve to use every tool of criminal prosecution to detect illicit financial transactions and enforce US sanctions."
According to the indictment handed down on Monday, Ma allegedly conspired with Zhou, Hong and Luo in creating or acquiring front companies that made US dollar transactions between December 2009 and September 2015 aimed at evading US sanctions.
The front companies were established in such offshore jurisdictions as Hong Kong, Wales, the British Virgin Islands, the Seychelles and Anguilla, prosecutors said. The defendants also allegedly held various Chinese bank accounts in the names of the front companies at banks in China linked to correspondent US accounts.
Dandong, in northeastern China, is close to the North Korean border. alt=Dandong, in northeastern China, is close to the North Korean border.
These accounts and front companies allowed the four to conduct US dollar transactions through the American banking system when arranging sales that were funded or guaranteed by the sanctioned North Korea-based Korea Kwangson Banking Corporation, prosecutors said.
In effect, this allowed them to sell items to various banned North Korean companies and banks through the US banking system for several years, it is charged.
Dandong is a border city in China's northeast Liaoning province.
Lawyers for Ma, Zhou, Hong and Luo could not be reached for comment.
Said US Attorney Craig Carpenito: "Ma, her company and her employees tried to defraud the United States by evading sanctions restrictions and doing business with proliferators of weapons of mass destruction."
This article originally appeared on the South China Morning Post (SCMP).
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