North Korea
June 19, 2019

U.S. Designates Russian Firm For Helping North Korea Access International Financial System

By Samuel Rubenfeld, Megi Hakobjanyan and Bryce Barros

 

The U.S. Treasury Department on Wednesday imposed sanctions on Russian Financial Society for helping North Korea access the international financial system to evade sanctions.

Russian Financial Society began to provide financial services to Pyongyang immediately upon attaining a non-banking credit organization license, which allows it to transact in multiple foreign currencies, the Treasury said. The Moscow-based organization received a license on July 11, 2017, according to records reviewed by Kharon.

“Those who attempt to circumvent our authorities to provide [North Korea] with access to international financial markets expose themselves to significant sanctions risk,” said Treasury Under Secretary Sigal Mandelker.

Russian Financial Society offers a variety of financial services, including currency conversion, cash and settlement, and access to the Sendy mobile-payment system, according to its website, as archived on June 17. The website appears to have gone down after the U.S. sanctions announcement.

The organization reported about 122.3 million rubles (USD 1.9 million) in revenue in the first quarter of 2019, according to an earnings statement published by the Central Bank of Russia. It has a ruble correspondent account at the Russian central bank.

Russian Financial Society accesses some foreign currencies through accounts at Sberbank, a Russian lender subject to certain restrictions under U.S. sectoral sanctions. Sberbank maintains Dollar and Euro correspondent relationships with institutions in the U.S. and Europe.

Kharon research

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