Report: North Korea hiding behind Hong Kong shell companies

By Elizabeth Shim Contact the Author   |  Oct. 17, 2017 at 10:34 AM
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Oct. 17 (UPI) -- Hong Kong may be a hotbed of North Korea shell companies that allow the Kim Jong Un regime to access the global financial system, CNN reported Tuesday.

A CNN investigative report revealed a company targeted for sanctions could be housed in an office tower in the city.

Unaforte Limited Hong Kong is believed to be utilizing an unassuming space on the building's 21st floor while secretly assisting Pyongyang to make money to fund Kim's nuclear weapons program.

Sources at the site, however, told CNN they had not heard of Unaforte, and a company named Cheerful Best Company Services occupied the room that was listed as the public address of Unaforte, according to the report.

Unaforte owned a bank in the North Korean city of Rason, the area designated a special economic zone by the regime.

The company is most likely in violation of sanctions, according to a U.S. lawyer who spoke to CNN.

The United Nations Panel of Experts on North Korea had mentioned Unaforte's activities in two reports.

While shell companies are legitimate firms that can conduct business, such as helping foreign corporations establish a presence abroad, others conceal ownership or hide parties involved in illicit transactions.

Sigal Mandelker, the undersecretary for terrorism and financial intelligence at the U.S. Department of the Treasury, had said in September North Korea "accesses the international financial system through front companies and other deceptive financial practices in order to buy goods and services abroad."

The CNN report did not uncover direct evidence Unaforte had been conducting illicit transactions.

The company's records also showed one name associated with the firm: a Dominica passport holder.

Former U.S. Treasury official Anthony Ruggiero said North Korea uses a complex ledger and credit scheme to hide North Korea dollar transactions, according to the report.

Last Friday Beijing's administration of customs announced Chinese imports from North Korea fell 37.9 percent in September, and said the numbers indicate the country is implementing sanctions adopted at the United Nations Security Council.

U.S. President Donald Trump had called on China's Xi Jinping to do more to squeeze Pyongyang and pressure the regime to give up its nuclear weapons.

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