US Trea­sury of­fi­cial presses Hong Kong, Bei­jing on N.Korea

The Myanmar Times - Weekend - - Front Page -

A US Trea­sury of­fi­cial said Wed­nes­day she has urged of­fi­cials in Hong Kong and Bei­jing to step up mea­sures to counter North Korean smug­gling and fi­nanc­ing, as part of Washington’s fine tun­ing of ef­forts to shut down Py­ongyang’s nu­clear pro­gram.

Trea­sury Un­der­sec­re­tary for ter­ror­ism and fi­nan­cial in­tel­li­gence Si­gal Man­delker said she told Hong Kong of­fi­cials it should be harder for North Korea to use shell com­pa­nies reg­is­tered in the Asian busi­ness hub.

Man­delker said she also re­peat­edly pressed of­fi­cials in Bei­jing to ex­pel sanc­tioned North Kore­ans in China who fa­cil­i­tate North Korean fi­nan­cial trans­ac­tions.

De­spite var­i­ous hur­dles, she said three in­creas­ingly strin­gent United Na­tions Se­cu­rity Coun­cil res­o­lu­tions last year on North Korea were hav­ing a “sig­nif­i­cant im­pact.” She did not give any de­tails.

Also Wed­nes­day, Ja­pan’s For­eign Min­istry said a Ja­panese Navy sur­veil­lance air­craft spot­ted a sanc­tioned North Korean tanker four days ago car­ry­ing out what was thought to be an il­licit off­shore trans­fer in the East China Sea.

The min­istry said in a state­ment that North Korean-reg­is­tered Rye Song Gang No. 1 was seen along­side a Do­mini­can-flagged tanker, the Yuk Tung, be­fore dawn on Jan. 20.

The min­istry said it re­ported the sight­ing, in­clud­ing four pho­tos, to the UN Se­cu­rity Coun­cil com­mit­tee on North Korea sanc­tions.

Ship-to-ship trade with North Korea at sea, in­clud­ing trans­fers of oil, is pro­hib­ited un­der UN sanc­tions adopted Sept. 11.

The Rye Song Gang No. 1 is among ships on the UN’S sanc­tioned ves­sel list, which pro­hibits them from en­ter­ing ports. The min­istry said it ap­peared to be us­ing a phony name, Song Hae, to evade sanc­tions.

The sanc­tions are aimed at de­priv­ing North Korea of rev­enue for its nu- clear weapons pro­gram and other­wise ex­ert­ing pres­sure on the gov­ern­ment in Py­ongyang.

South Korea’s re­cent seizure of two ships sus­pected of be­ing used for il­le­gal oil sales to North Korea re­vealed a murky web of shell com­pa­nies listed as their own­ers or man­agers, in­clud­ing some reg­is­tered in Hong Kong. Two of eight other ships sanc­tioned by the UN last year also have links to Hong Kong shell com­pa­nies.

The for­mer Bri­tish colony of­ten tops the busi­ness and eco­nomic free- dom rank­ings, based on cri­te­ria that in­clude ease of set­ting up busi­ness. But that can also fa­cil­i­tate il­licit deal­ings.

“Hong Kong of course is an in­ter­na­tional fi­nance hub and at the same time it has com­pany for­ma­tion and reg­is­tra­tion rules that we think need to be stronger,” said Man­delker. She said she dis­cussed that is­sue with of­fi­cials in­clud­ing those at Hong Kong’s Fi­nan­cial Ser­vices and Trea­sury Bu­reau.

“This shouldn’t be a place where com­pa­nies can es­tab­lish them­selves to help in the smug­gling and ship-to-ship trans­fers,” she said.

Re­cent scan­dals about off­share havens re­vealed Hong Kong to be a global cen­ter for front com­pa­nies.

“Our law en­force­ment agen­cies will closely fol­low up on sus­pected vi­o­la­tions” of sanc­tions, the Hong Kong gov­ern­ment said in a state­ment, adding that it is work­ing on strength­en­ing busi­ness in­cor­po­ra­tion reg­u­la­tions.

Man­delker said she urged of­fi­cials at her pre­vi­ous stop in Bei­jing to take ac­tion against North Kore­ans that the Trea­sury Depart­ment sanc­tioned in Septem­ber for act­ing as rep­re­sen­ta­tives of the coun­try’s banks. Most of the 26 in­di­vid­u­als listed live in China.

“These are highly skilled peo­ple who have been able to il­lic­itly ac­cess the in­ter­na­tional fi­nan­cial sys­tem,” she said. “One point that we pressed re­peat­edly in Bei­jing is that those in­di­vid­u­als need to be ex­pelled.” –

Photo: AP

Chi­nese para­mil­i­tary po­lice­men build a fence near a cross­ing into North Korea at the Chi­nese border town of Tu­men in eastern China’s Jilin province. De­cem­ber 8, 2012.

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