U.S. Seizes Oil Tanker Used to Violate Sanctions Against North Korea
A New York federal court entered a judgment of forfeiture for an oil tanker used as part of a scheme to evade sanctions against North Korea and in the processes violating U.S. law and deceptively using U.S. dollars through unwitting U.S. banks. The U.S. Justice Department has been using seizures with increasing frequency as a tool to enforce sanctions against North Korea as well as Iran.
In this case, Cambodian authorities seized a 2,734-ton oil-products tanker, the M/T Courageous, in March 2020 and held the vessel under a U.S. seizure warrant issued in April 2020. The U.S. Attorney’s Office for the Southern District of New York filed a civil forfeiture complaint against M/T Courageous in April 2021 saying that the vessel had been used to make illicit deliveries of petroleum products through ship-to-ship transfers with vessels flagged in the Democratic People’s Republic of Korea (North Korea) and direct shipments to the North Korean port of Nampo.
“Today’s judgment reflects that the sanctions-evading ship, the Courageous, has been forfeited to the United States and will no longer be used to enable North Korea’s pattern of evading the global community’s prohibitions on support for that regime,” said Manhattan U.S. Attorney Audrey Strauss after the judge issued the judgment of forfeiture. “Thanks to the extraordinary cooperation between U.S. and Cambodian law enforcement authorities, the Courageous is permanently out of service.”
According to documents filed in the civil forfeiture action and allegations contained in the criminal complaint, Kwek Kee Seng, a Singaporean national, and his co-conspirators engaged in an extensive scheme to evade these U.S. and U.N. sanctions by using vessels under their control to covertly transport fuel to North Korea. One of those vessels was M/T Courageous was purchased by Kwek through front companies to further the scheme to evade sanctions and launder money.
Between August and December 2019, the Courageous illicitly stopped transmitting information regarding its location, during which time satellite imagery shows that the Courageous both engaged in a ship-to-ship transfer of more than $1.5 million worth of oil to a North Korean ship, the Saebyol, and traveled to the North Korean port of Nampo. Kwek and his co-conspirators allegedly took additional steps to hide the scheme by operating a series of shell companies, lying to international shipping authorities about the Courageous’s dealings with North Korea, and falsely identifying M/T Courageous as another ship to evade detection.
The U.S. also alleged that Kwek and his co-conspirators arranged for a variety of payments denominated in U.S. dollars that were processed through U.S.-based correspondent accounts to purchase oil. Among the transactions they cited was over $500,000 to buy M/T Courageous, and thousands of dollars to procure necessary services for M/T Courageous and another vessel, including registration fees, ship materials, and salary payments for crewmembers. The preparators also purchased more than $1.5 million of oil, which was later transferred to the Saebyol.
Kwek and his co-conspirators sought to conceal these sanctions-evading transactions by, among other things, using front companies to disguise the nature of the transactions, disguising location information for vessels carrying illicit shipments, and conducting ship-to-ship fuel transfers on the open sea in an attempt to hide their counterparties.
Criminal charges of conspiracy to evade economic sanctions on North Korea and money laundering conspiracy are pending against the alleged owner and operator of the Courageous, Kwek Kee Seng. He remains at large, but if caught and convicted, each count carries a maximum term of 20 years in prison.