US Sanctions Procurement Network of 5 Chinese Companies Aiding N.Korea’s Ballistic and Space Programs

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Mayur Joshi
Mayur Joshihttp://www.mayurjoshi.com
Mayur Joshi is a contributing editor to Regtechtimes, he is recognized for his insightful reporting and analysis on financial crimes, particularly in the realms of espionage and sanctions. Mayur's expertise extends globally, with a notable focus on the sanctions imposed by OFAC, as well as those from the US, UK, and Australia. He is also regular contributor on Geopolitical subjects and have been writing about China. He has authored seven books on financial crimes and compliance, solidifying his reputation as a thought leader in the industry. One of his significant contributions is designing India's first certification program in Anti-Money Laundering, highlighting his commitment to enhancing AML practices. His book on global sanctions further underscores his deep knowledge and influence in the field of regtech.

The United States has imposed significant sanctions on a procurement network of six individuals and five entities based in China for their role in supporting North Korea’s ballistic missile and space programs. These sanctions, issued by the Department of the Treasury’s Office of Foreign Assets Control (OFAC), target individuals and companies aiding North Korea’s procurement of materials essential for its weapons development, in violation of multiple United Nations (UN) Security Council Resolutions (UNSCR).

Violation of UN Sanctions and Global Security

The Democratic People’s Republic of Korea (DPRK) has persistently violated international sanctions by continuing to develop and test ballistic missile technology. A recent attempt to launch a military satellite in May 2024 underscores the regime’s ongoing defiance. North Korea’s actions not only destabilize the region but also pose a significant threat to global security.

Furthermore, the DPRK has supplied ballistic missiles to Russia, which has been using them in its ongoing conflict in Ukraine, further complicating international efforts to maintain peace.

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Russia has exacerbated the situation by vetoing the renewal of the UN Panel of Experts responsible for monitoring DPRK-related sanctions violations. This move has made it easier for North Korea and its accomplices to evade sanctions, highlighting the necessity of robust enforcement measures by other nations.

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Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, emphasized the importance of the sanctions on the procurement network: The DPRK’s continued development and proliferation of ballistic missile technologies—in violation of UN sanctions—is both irresponsible and destabilizing for both the region and the international community. The United States remains committed to using our tools to enforce these international sanctions, including disrupting the illicit procurement networks that provide key inputs for these technologies and holding accountable those who seek to enable these activities.

Key Figures and Entities Involved

The sanctions were enacted under Executive Order 13382 (E.O. 13382), which targets proliferators of weapons of mass destruction (WMD) and their supporters. This action builds upon previous designations, such as the June 15, 2023 designation of Choe Chol Min, a Beijing-based representative of the DPRK’s Second Academy of Natural Sciences (SANS).

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Choe Chol Min has been a central figure in North Korea related procurement network, working with Chinese nationals and other associates to secure materials for ballistic missiles. SANS, designated by the U.S. Department of State in 2010 and subject to a UN asset freeze since 2013, plays a crucial role in North Korea’s WMD programs.

Shi Qianpei, a Chinese national, is a key facilitator for Choe Chol Min. Shi and his procurement network have procured various items, including metal sheets and sensitive electronics, essential for North Korea’s missile production. Shi’s procurement network includes several key individuals and entities:

  • Du Jiaxin and Wang Dongliang: Employees assisting with procurement efforts.
  • Chen Tianxin: Shi’s wife and business partner, involved in procurement activities.
  • Shi Anhui: Shi’s father, also involved in aiding DPRK procurement.

The following companies have been implicated for their roles in this procurement network:

  • Beijing Sanshunda Electronics Science and Technology Co., Ltd. (Beijing Sanshunda)
  • Qidong Hengcheng Electronics Factory (Qidong Hengcheng)
  • Shenzhen City Mean Well Electronics Co., Ltd (Shenzhen City Mean Well)
  • Beijing Jinghua Qidi Electronic Technology Co., Ltd. (Beijing Jinghua Qidi)

Chen Tianxin, the legal representative and CEO of Beijing Sanshunda and Beijing Jinghua Qidi, along with Wang Dongliang, a board member of Beijing Jinghua Qidi, have been instrumental in these activities. Similarly, Shi Anhui holds key positions in Qidong Hengcheng and Shenzhen City Mean Well, further linking these entities to the procurement network.

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Another critical supplier is Han Dejian, who, through his company Yidatong Tianjin Metal Materials Co., Ltd.(Yidatong), has provided metal alloys essential for North Korea’s missile production. Han and Yidatong were previously sanctioned by the U.S. Department of State on May 20, 2024, under the Iran, North Korea, and Syria Nonproliferation Act (INKSNA).

Enforcement and Implications

The U.S. Treasury’s sanctions underscore the ongoing commitment to countering the proliferation of WMDs and enforcing international sanctions. By targeting the individuals and entities facilitating North Korea’s missile and space programs, the U.S. aims to disrupt the supply chains critical to these efforts.

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These sanctions are part of a broader strategy to isolate North Korea economically and technologically. By cutting off access to essential materials and technologies, the U.S. and its allies hope to hinder the DPRK’s ability to advance its WMD programs.

The designations also serve as a warning to other entities that might consider engaging in similar activities. The international community’s resolve to enforce UN sanctions remains strong, despite efforts by some nations to undermine these measures. The U.S. Treasury’s actions send a clear message that those who support North Korea’s illicit programs will face significant consequences.

The Broader Context

North Korea’s continued defiance of international norms and its collaboration with nations like Russia complicate global security dynamics. The DPRK’s ability to procure foreign materials despite stringent sanctions highlights the challenges of enforcing international law in an interconnected world.

The sanctions on Chinese individuals and entities also reflect the complex relationship between the U.S. and China. While the two nations engage in extensive economic and diplomatic exchanges, issues like North Korea’s WMD programs and sanctions evasion strain bilateral relations. The U.S. sanctions signal a firm stance against any form of support for North Korea’s prohibited activities, regardless of the entities’ nationality.

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