In a continuing effort to pressure and isolate North Korea by targeting entities and individuals in third countries, on Tuesday, August 22, 2017, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) and US Justice Department (“DOJ”) announced sanctions and a civil forfeiture action, respectively, targeting Chinese and Russian entities accused of directly or indirectly assisting or supporting North Korea’s nuclear and ballistic missile programs. China is North Korea’s primary trading partner and these actions appear to be an effort, in part, to ramp up pressure on China to assist in curtailing its neighbor’s nuclear ambitions.

For its part, OFAC announced sanctions against 10 Chinese and Russian entities and six individuals it says have advanced North Korea’s programs to develop nuclear weapons and ballistic missiles by: 1) assisting North Korean entities previously blacklisted for their alleged ties to the North Korean nuclear and ballistic missile programs, 2) dealing in the North Korean energy trade, which supports those programs, 3) facilitating the use of overseas North Korean labor, revenue from which supports those programs, and 4) enabling sanctioned North Korean entities to access the US and international financial systems.

At the same time, DOJ announced an $11 million civil forfeiture action targeting two Singapore- and China-based companies that it alleges were involved in transactions with Russian and North Korean companies that facilitated the North Korean weapons programs.  This follows a growing trend to use civil forfeiture actions, which require a much lower burden of proof and do not require bringing the entities involved under US jurisdiction, to target companies accused of assisting North Korea, including:

  • A memorandum order unsealed in July that targeted funds allegedly flowing through eight US banks to North Korean front companies representing sanctioned North Korean entities that resulted in warrants authorizing the DOJ to seize incoming wire transfers to those banks;
  • An action in June targeting $1.9 million belonging to a Chinese company alleged to have acted as a front company to launder US dollars on behalf of sanctioned North Korean entities; and
  • An action last year targeting accounts at Chinese banks that allegedly received funds that transited through US banks as part of a scheme to launder US dollars for North Korea through front companies.

The latest actions come on the heels of others taken within just the last two months representing new tactics in using sanctions and other measures to target North Korea, including:

  • The enactment of the Countering America’s Adversaries Through Sanctions Act (“CAATSA”) which calls for increased sanctions on North Korea (see our prior update on the CAATSA here);
  • The imposition of new UN Security Council sanctions on North Korea with the backing of China (see our blog post here); and
  • The imposition of restrictions on the Chinese Bank of Dandong, which was alleged by the US Treasury Department to have engaged in money laundering to assist companies involved in North Korea’s weapons programs (see our prior blog post here).

Taken together, the civil forfeiture actions targeting Chinese entities, the action targeting the Bank of Dandong, and the designation of Chinese entities appear to show an effort on the part of the US to bring additional pressure on China, whose cooperation on curtailing North Korea’s weapons programs is seen as vital. At the very least, it shows that Chinese companies that do business with North Korea are likely to come under increased scrutiny by US prosecutors and may face increasing actions against them.


Paul Amberg is a partner in Baker McKenzie’s Madrid office, where he handles international trade and compliance issues. He advises multinational companies on export controls, trade sanctions, antiboycott rules, customs laws, anticorruption laws, and commercial law matters. Paul helps clients assess and address compliance risks presented by export controls, trade sanctions, antiboycott rules, customs laws, and anticorruption laws. His practice especially focuses on internal reviews, voluntary disclosure filings, and enforcement actions brought by, the US Government in relation to the Export Administration Regulations (EAR), International Traffic in Arms Regulations (ITAR), trade and economic sanctions programs, and US customs laws.


Kathryn Anderson is an associate in Baker McKenzie's International Commercial Practice Group in San Francisco. Kathryn's practice focuses on cross-border transactions and international trade regulation, including export controls, trade and investment sanctions, anti-terrorism controls, and customs and import regulations. Her practice also covers anti-corruption rules and international corporate compliance.


Lloyd advises clients on compliance with the International Traffic in Arms Regulations administered by the US Department of State, and the Export Administration Regulations administered by the Department of Commerce. He has assisted in conducting internal investigations and compliance audits, drafting export licenses and Technical Assistance Agreements, developing comprehensive compliance programs and drafting voluntary disclosures. Lloyd also advises on trade sanctions administered by the Treasury Department’s Office of Foreign Assets Control. He has experience drafting license applications for sanctioned countries and parties, conducting internal investigations into potential sanction violations, drafting voluntary disclosures, and conducting due diligence ahead of mergers and acquisitions. A Certified Fraud Examiner and former police detective, Lloyd also conducts complex internal investigations on behalf of clients into potential violations of various regulations. He has interviewed witnesses and subjects, reviewed large volumes of data for relevant evidence, analyzed complex regulatory requirements and prepared investigative reports provided to government agencies.