Regulatory Alert: Treasury Sanctions Network Supporting Arms Transfers Between Russia and North Korea

Summary: On June 12, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced new sanctions against entities and individuals involved in a global network supporting arms transfers from North Korea to Russia. The sanctioned parties are accused of facilitating military equipment shipments in violation of U.S. and United Nations sanctions. This action follows ongoing U.S. efforts to disrupt weapons proliferation networks and deter financial institutions from engaging with high-risk actors. The designation was made under Executive Order 14024, which targets those operating in sectors of the Russian economy, including the defense and related material sector. Financial institutions are expected to screen against these updated designations and take appropriate steps to avoid direct or indirect dealings.

Takeaways:

• OFAC sanctioned entities and individuals for facilitating weapons shipments from North Korea to Russia under Executive Order 14024
• Financial institutions must screen against the updated Specially Designated Nationals (SDN) List and monitor for indirect exposure
• Risk areas include trade finance, cross-border payments, correspondent banking, and fintech cross-connections
• Violations of OFAC sanctions may result in civil or criminal penalties, even without direct intent
• Institutions are advised to review sanctions compliance programs and update internal screening tools accordingly

What This Means for Financial Institutions:

This action highlights the continued use of U.S. financial sanctions to disrupt global weapons trafficking and reinforce national security objectives. Banks, MSBs, and fintech partners should ensure their sanctions screening systems reflect the most recent SDN list updates and are calibrated to detect potential matches, including name variants and affiliated entities.

Institutions with exposure to high-risk jurisdictions or partners—especially those in Eastern Europe, East Asia, or dealing with trade-related payments—should enhance due diligence measures and escalate any potential red flags for review. OFAC expects proactive compliance, even when the involvement is indirect or facilitated through intermediaries. Now is the time to reassess your sanctions policies, transaction monitoring rules, and escalation protocols to avoid gaps that may expose your institution to enforcement risk.

For details and a list of designated entities, see the full Treasury release: Link

To search the updated SDN list, visit OFAC’s Sanctions List Search tool: Link

For further information or inquiries about this alert, please visit High-risk Education.