OFAC slaps sanctions on FBI-wanted shipownerWritten by Nick Blenkey
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) last week designated two individuals and three entities for activities related to the exportation of petroleum to the Democratic People’s Republic of Korea (DPRK). One of the two individuals designated under the new OFAC action is Singapore based Kwek Kee Sen, who is already on an FBI wanted poster in relation to charges of conspiring to evade economic sanctions on the Democratic People’s Republic of Korea (DPRK) and money laundering conspiracy. Those charges relate to the use of the M/T Courageous to use illicit ship-to-ship transfers of petroleum to the DPRK. The ship was subsequently seized by the U.S. in a civil forfeiture action, but Kwek Kee Seng remains wanted by the FBI.
The latest sanctions actions have been taken in response to North Korea’s latest round of missile tests, but they again shine a light on so-called “dark shipping” activities, and they serve as a reminder to maritime players to be careful about who they do business with as the sanctions net gets broader.
In addition to Kwek Kee Seng, they target Taiwan-based Chen Shih Huan, and Marshall Islands-registered company New Eastern Shipping Co Ltd for their involvement in the ownership or management of the Courageous. The vessel, known as the Sea Prima during much of its illicit activity, conducted UN-prohibited STS transfers with the DPRK vessels and at least one direct delivery at Nampo, DPRK.
In September 2019, says OFAC, the Courageous, then named Sea Prima, conducted an STS transfer of refined petroleum with the DPRK vessel Saebyol, which then delivered the cargo to the DPRK.
In November 2019, the Courageous, then named Sea Prima, delivered refined petroleum at Nampo, DPRK.
The Courageous engaged in deceptive shipping practices such as disabling its Automatic Identification System or AIS, conducting STS transfers at night and in the Korea Bay (an area determined to be high-risk for sanctions evasion), and undertaking unnecessary detours to further obfuscate its true destination or origin. These activities are consistent with deceptive shipping practices identified in the May 2020 Sanctions Advisory for the Maritime Industry, Energy and Metals Sectors, and Related Communities, issued jointly by OFAC, the U.S. Department of State, and the U.S. Coast Guard.
Kwek Kee Seng closely coordinated STS transfers from the Courageous to the DPRK vessels and supervised the vessel during a delivery to the DPRK. Chen Shih Huan, a business associate of Kwek Kee Seng, also assisted in the coordination of these deliveries, including payment of the Courageous crew’s salaries.
As a result, Kwek Kee Seng and Chen Shih Huan are being designated pursuant to E.O. 13810 for having engaged in at least one significant importation from or exportation to the DPRK of any goods, services, or technology.
New Eastern Shipping Co Ltd was the registered owner of the Courageous during the timeframe of the vessel’s illicit activity. New Eastern Shipping Co Ltd is being designated pursuant to E.O. 13810 for having engaged in at least one significant importation from or exportation to the DPRK of any goods, services, or technology.
Additionally, OFAC designated Singapore-registered Anfasar Trading (S) Pte. Ltd. and Singapore registered Swanseas Port Services Pte. Ltd. for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, Kwek Kee Seng, a person whose property and interests in property are blocked pursuant to E.O. 13810.
OFAC says that, as a result of its action, all property and interests in property of the individuals and entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons.
In addition, persons that engage in certain transactions with the designated individuals or entities may themselves be exposed to designation. Furthermore, any foreign financial institution that knowingly facilitates a significant transaction or provides significant financial services for any of the individuals or entities designated today could be subject to U.S. correspondent or payable-through account sanctions.