LDN - Business

U.S. sanctions Russian, Chinese tech firms over funds for North Korea

[September 14, 2018] By Tim Ahmann and Hyonhee Shin

WASHINGTON/SEOUL (Reuters) - The United States on Thursday imposed sanctions on a China-based tech firm, its North Korean CEO and a Russian subsidiary, accusing them of moving illicit funding to North Korea in violation of U.S. sanctions.

The new sanctions target China-based Yanbian Silverstar Network Technology Co, its North Korean chief executive Jong Song Hwa, and a Russian-based sister company, Volasys Silver Star, the U.S. Treasury Department said in a statement.

"These actions are intended to stop the flow of illicit revenue to North Korea from overseas information technology workers disguising their true identities and hiding behind front companies, aliases, and third-party nationals," Treasury Secretary Steven Mnuchin said in a statement.

Mnuchin warned companies across the globe "to take precautions to ensure that they are not unwittingly employing North Korean workers for technology projects."

South Korea's foreign ministry said the move was in line with the United States' resolve to keep up sanctions to achieve complete denuclearization of the Korean peninsula while carrying out dialogue.

A manager at Yanbian Silverstar, who would only give his family name Jin, said the allegations were "impossible".

"I've never heard of Jong Song Hwa," he told Reuters.

Asked about the sanctions, China's Foreign Ministry Spokesman Geng Shuang said that China fully enforces United Nations resolutions on North Korea and resolutely opposes any country enacting unilateral sanctions on Chinese entities using "long-arm jurisdiction".

"China had already lodged stern representations with the U.S. side about this, and urges the U.S. side to stop these wrong actions," he said, without elaborating.

The administration of U.S. President Donald Trump has maintained sanctions pressure on Pyongyang in an effort to convince North Korea to give up its nuclear weapons, which are a threat to the United States.

Trump met North Korean leader Kim Jong Un in June at a summit in Singapore where Kim agreed in broad terms to work toward denuclearization of the Korean peninsula. North Korea has however given no indication it is willing to give up its weapons unilaterally, as the Trump administration has demanded.

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U.S. President Donald Trump shakes hands with North Korean leader Kim Jong Un at the Capella Hotel on Sentosa island in Singapore June 12, 2018. REUTERS/Jonathan Ernst/File Photo

Washington has also accused Russia of violating U.N. sanctions on North Korea by granting work permits to North Korean laborers despite Russia's denial of any such actions.

U.S. Ambassador to the United Nations Nikki Haley accused Moscow on Thursday of seeking to cover up breaches of U.N. sanctions on North Korea by Russians.

"VICIOUS SLANDER"

North Korea's official KCNA news agency said U.S. accusations that it was responsible for cyber attacks in 2014 and 2017 were a "smear campaign" and a man sanctioned by Washington earlier this month did not exist.

Washington charged and sanctioned Pak Jin Hyok and a Chinese-based front company he worked for, Chosun Expo, over the 2017 global WannaCry ransomware cyberattack and the 2014 cyberassault on Sony Corp.

Park worked as part of a team of hackers, known as the Lazarus Group, to try to breach multiple U.S. businesses, including defense contractor Lockheed Martin Corp, U.S. officials said, though there was no evidence the company was breached.

KCNA said Pak was "non-existent" and the act of cyber crimes mentioned by Washington "has nothing to do with us."

"The U.S. farce of prosecution is none other than a vicious slander and another smear campaign full of falsehood and fabrication designed to undermine the DPRK," KCNA said, referring to the country's official name, Democratic People's Republic of Korea.

"In reality, the U.S. is the chief culprit responsible for posing security threats in cyberspace."

(Reporting by Tim Ahmann and Lesley Wroughton in WASHINGTON, Ben Blanchard and Gao Liangping in BEIJING and Hyonhee Shin in SEOUL; Editing by James Dalgleish and Stephen Coates)

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