The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on two Russian individuals and three Russia-based entities for facilitating weapons transfers between Russia and the Democratic People’s Republic of Korea (DPRK). This action aligns with U.S. government objectives to disrupt and expose arms transfers between the DPRK and Russia, building upon previous sanctions imposed by the Department of the Treasury and the Department of State related to DPRK-Russia arms transfers.
"Today’s action reflects our commitment to disrupt the DPRK’s deepening military cooperation with Russia," said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. "The United States will continue to take action to hold accountable those who seek to facilitate the shipment of weapons and other materiel to enable Russia’s war."
Russia and the DPRK have strengthened their military cooperation over the past year, with DPRK providing ballistic missiles and munitions to Russia. In return, Pyongyang is seeking military assistance from Russia. These designations target individuals and companies facilitating this military cooperation. Operating through networks located in Russia, these actors attempt to evade sanctions by using front companies to move military equipment in support of Russia’s illegal aggression against Ukraine.
In March 2023, OFAC designated Ashot Mkrtychev for attempting to facilitate arms deals between Russia and the DPRK. In August 2023, OFAC designated three additional companies, including Verus LLC, a Russia-based company tied to Mkrtychev’s sanctions evasion network. Since these designations, Mkrtychev and his associates have continued facilitating shipments of DPRK military equipment to Russia.
Throughout 2023, Rafael Anatolyevich Gazaryan worked with Mkrtychev on arms transactions involving the DPRK and Russia. As recently as June 2023, Gazaryan worked on purchasing certain components on Mkrtychev’s behalf. At the time of Verus LLC’s 2023 designation, Gazaryan was also the company’s director. Gazaryan used Russian-based Trans Kapital Limited Liability Company to facilitate the shipment and delivery of aviation components to a North Korean weapons dealer. Gazaryan is the owner of Russia-based Rafort Limited Liability Company.
As recently as March 2023, Aleksey Budnev facilitated shipments to Russia of military communications equipment that likely originated from the DPRK intended to support the Russian military. Budnev is the sole owner of Russia-based Tekhnologiya, OOO.
The implications of these sanctions mean that all property and interests in property of the designated persons within U.S. jurisdiction are blocked and must be reported to OFAC. In addition, any entities owned directly or indirectly by one or more blocked persons are also blocked. Financial institutions and other persons engaging in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action.
OFAC's power derives not only from its ability to designate and add persons to the SDN List but also from its willingness to remove persons from this list consistent with the law. The ultimate goal of sanctions is not punishment but a positive change in behavior.
For more information on these designations, please visit [link].
