Cyber Risk

Russian firms, vessels hit with U.S. sanctions over North Korea oil transfers

WASHINGTON (Reuters) - The United States on Tuesday announced sanctions on two Russian shipping companies and six vessels it said were involved in the transfer of refined petroleum products to North Korean vessels in violation of United Nations restrictions.

The Russian flag flies over the Embassy of Russia in Washington, U.S., August 6, 2018. REUTERS/Brian Snyder

Russian Deputy Foreign Minister Sergei Ryabkov called the sanctions as well as other U.S. steps over alleged hacking, groundless, and promised a response.

The U.S. Treasury identified the shipping firms as Vladivostok-based shipping companies Primorye Maritime Logistics Co Ltd (Primorye) and Gudzon Shipping Co LLC (Gudzon). It also named six Russian-flagged vessels: Bella, Bogatyr, Neptun, Partizan, Patriot and Sevastopol.

“Ship-to-ship transfers with North Korea-flagged vessels from Russia or elsewhere of any goods being supplied, sold, or transferred to or from (North Korea) are prohibited under the U.N. Security Council resolutions on North Korea and are sanctionable under U.S. law,” U.S. Treasury Secretary Steven Mnuchin said in a statement.

“Consequences for violating these sanctions will remain in place until we have achieved the final, fully verified denuclearization of North Korea,” Mnuchin added.

The United States has been pressuring North Korea via sanctions to give up its nuclear weapons program.

The Treasury statement said Russian ship Patriot conducted two ship-to-ship transfers of oil in early 2018 - 1,500 tons to the North Korea-flagged Chong Rim 2 and 2,000 tons to the North Korea-flagged Chon Ma San.

It said the buyer was the Taesong Bank, a North Korean entity subordinate to the Workers’ Party of Korea Office 39, “which engages in illicit economic activities for North Korean leadership.”

Taesong Bank has already been slapped with both U.N. and U.S. sanctions.

In a statement published on the Russian Foreign Ministry website, Ryabkov said the latest sanctions were introduced under a “false pretense.”

Tuesday’s announcement came just days after Washington imposed sanctions on a Russian port service agency as well as Chinese companies for aiding North Korean ships and selling alcohol and tobacco to Pyongyang in breach of U.S. sanctions.

After last week’s announcement, Russia said the United States had acted without evidence on the basis of groundless accusations and said it was working on retaliatory measures.

Reporting by David Brunnstrom; additional reporting by Vladimir Soldatkin in MOSCOW; editing by G Crosse