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  • The Mercedes Maybach S600 sedan  is a classy luxury vehicle.  

  • Sadly such a vehicle is something I'll never  afford on a Infographics writer's salary. But  

  • you know who owns a pair of armored 2018 Mercedes  Maybach S600 sedans worth close to $500,000 each?  

  • North Korean dictator Kim Jung-Un. And your  bank might have helped him pay for them.

  • Since the Korean War in the 1950s, there have  been a few cycles of implementing and easing  

  • embargoes and sanctions on North Korea from the US  and several other countries. In the last 15 years  

  • or so, each time North Korea conducts a nuclear  weapons test or commits other infractions, the UN,  

  • EU and several countries enact new sanctions. Current UN resolutions include banning North  

  • Korea from exporting gold, titanium, and rare  earth metals, as well as coal, seafood, textiles  

  • and lead. The EU also restricts elite North  Korean citizens from purchasing luxury goods,  

  • traveling abroad as well as targeting  their financial assets and limiting  

  • banking transactions. Also most importantlysanctions prevent North Korea's import of  

  • weapons-related materials and petroleum products. But it's a cat and mouse game. North Korea is  

  • constantly attempting to find ways around  sanctions, especially in regards to being  

  • able to build weapons. Kim Jung Un rules through  fear and repression. He's extremely dependent  

  • on North Korean's nuclear program to showcase the  military might of the country. Not only to promote  

  • North Korea and intimidate other countries, but  to maintain fear and patriotism in the hearts of  

  • his citizens. So how does North Korea funnel large  sums of money into the weapons program? Are banks  

  • in other countries complicit in these schemes? New  evidence reveals shocking ways North Korea funds  

  • its nuclear programs--your bank could be involved! In the spring of 2020, the US Justice Department  

  • pursued the agency's largest sanctions  violation case ever. They indicted 28 North  

  • Korean and five Chinese citizens, alleging  that they were behind an international money  

  • laundering enterprise. The clandestine web  of fraud enabled over $2.5 billion in illegal  

  • payments for North Korea's nuclear weapons and  missile program in violation of US sanctions

  • Apparently the 33 defendants operated out of  several countries including Russia, China,  

  • Thailand, Libya, Austria and Kuwait, running  covert bank branches and more than 250 front  

  • companies to mask transactions and ultimately  transfer funds to the Foreign Trade Bank [FTB],  

  • North Korean's primary financial institution. The convoluted scheme had been running since  

  • 2013 when the U.S. Treasury Department Office of  Foreign Assets Control sanctioned and blacklisted  

  • FTB from the U.S. financial system in an effort  to directly limit North Korea's weapons building

  • Each covert branch or front company operated  differently depending on which country they  

  • were established in. The Justice Department  is still untangling how some of the fraud  

  • maneuvers worked. So far they have seized  more than $63 million in laundered funds

  • Foreign financial institutions often maintain  accounts in US Correspondent banks. Basically,  

  • Correspondent Banks support international wire  transfers for foreign customers in currency that  

  • the foreign customer's local bank normally does  not hold on reserve, such as U.S. dollars. This  

  • allows foreign entities to receive deposits, make  payments or disbursements and other transactions.  

  • FTB was blocked from using US Correspondent  banks directly and indirectly. However the  

  • secret banks and dummy companies hid the fact  that the money originated from FTB. Therefore  

  • Correspondent Banks processed payments they should  have rejected. Front companies worth hundreds of  

  • thousands of dollars also made payment to US  companies with money that originated with FTB

  • In addition to hiding the origins of moneyNorth Korea has bypassed financial sanctions  

  • through offshore accounts, cryptocurrency hacks  and ransomware attacks. So in a real world example  

  • a North Korean hacker steals a couple million  in Bitcoins. The stolen Bitcoin are sent through  

  • 'peel chains' or long chains of automated  transfers to new addresses, with small bits  

  • pieces of currency slowly peeled from the whole  and sent to exchanges. Because the amount of sent  

  • Bitcoin is small and comes from new or different  accounts each time, the transactions don't trigger  

  • safeguards in place at the exchange, and the small  bitcoin amounts are converted into hard currency.  

  • The hard currency ends up in the hands ofcovert FTB branch who obscures the money origins  

  • further and hands the money off to a Correspondent  Bank. Via the Correspondent Bank, FTB is able to  

  • further transfer the money or use the laundered  money to purchase legitimate goods or services

  • Remember Kim Jong Un's Maybachs? A private buyer  backed by a front company or Correspondent Bank  

  • account might purchase luxury goods, oil or  weapons-materials. The purchased cargo is then  

  • shipped through a variety of freight forwarding  companies in several different countries.  

  • Sooner or later most likely the cargo ends up  on a merchant ship flying a flag of convenience  

  • sailing the western Pacific. Often these ships  have complicated or shady records which obscure  

  • ownership and origination of the vessel which  can cause jurisdiction problems if the ship  

  • is stopped. Mysteriously, the merchant ship turns  off its transponder and can't be tracked for days,  

  • if not weeks at sea. After delivering its cargo  to a North Korean port, and returning to the sea,  

  • the merchant ship transponder  suddenly begins working again

  • Often money laundering and the import of  sanctioned goods by North Korea is able to  

  • happen because of complicit institutions or  officials who in the pursuit of making money  

  • chose not to look too closely at  the paperwork crossing their desks.  

  • This has been an ongoing issue with some  South Korean and Chinese institutions

  • The spring bust by the US Justice Department  is only a drop in the bucket and has at least  

  • temporarily closed some loopholes for North KoreaMost likely the majority of the defendants charged  

  • will never go to trial as they have returned to  North Korea or reside in other places where their  

  • chances of being extradited to the US are low. Some US officials believe that the best way to  

  • stop North Korea laundering money is to hit  colluding institutions with millions in civil  

  • penalties or serious indictmentsHowever it's a delicate issue and  

  • enacting an enormous penalty could damage  US relations with China and other countries

  • As long as North Korea is able to keep laundering  money and funding its nuclear program, Kim Jung Un  

  • will proceed with missile testing. The US Justice  Department bust is only the tip of the iceberg,  

  • will we be able to shut down North Korea's  nuclear program before it's too late?!

  • And now that you've reached the end of our  video, why not keep the watch party going?!  

  • Could we stop a nuclear missile from  North Korea? Click here to find out:

  • If you'd like to know more about how Kim  Jong-Un bypasses sanctions, click here:

The Mercedes Maybach S600 sedan  is a classy luxury vehicle.  

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B2 north korea north korea korean north korean nuclear

How North Korea Launders Money Through US Banks to Finance Their Nuclear Weapons Program

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    林宜悉 posted on 2020/11/29
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