Russian Shipping Company Accused of Doing Business With North Korea Hard-Hit by US Sanctions

A Russian shipping company is now on the brink of bankruptcy after running afoul of U.S. sanctions against North Korea, one of the firm’s executive said.

Vladivostok-based Gudzon Shipping has had six of its ships blacklisted by the U.S. treasury department for allegedly engaging in ship-to-ship transfers of petroleum with a North Korean entity.

The company maintains it did not violate the sanctions, aimed at depriving North Korea’s regime of foreign income that could be used to enhance its nuclear program.

Gudzon’s blacklisted ships include the Patriot, Bella, Neptun, Bogatyr, Partizan and the Sevastopol, which had been stranded in South Korea for more than one month.

On Nov 23, Gudzon’s Vice President, who only identified himself by his given name Aleksey, told RFA’s Korean Service, “The Sevastopol is in Busan. It’s trying to return to Russia but there is no fuel.”

“South Korean companies refuse to supply fuel for the ship because of the sanctions. It’s a big problem,” he said.

Aleksey said South Korean oil companies were worried that if they were to sell fuel to Gudzon, they too would be blacklisted in the form of secondary boycotts for assisting sanctions violators.

The Russian media outlet Sputnik News reported on Dec 2 that the Sevastopol was able to return to Vladivostok. South Korean authorities would not allow Gudzon to have fuel oil, but allowed the ship to get enough diesel fuel for the voyage home.

Aleksey denied there was any wrongdoing with the ship-to-ship transfer that ended up getting the company blacklisted.

“The Patriot provided oil to Chinese vessels, not North Korean ones,” he said.

“There was no contact with North Korean vessels,” said Aleksey.

This account is inconsistent with Ambassador Nikki Haley’s Sep 17 remarks at a U.N. Security Council briefing.

“One Russian vessel, called the Patriot, was captured on film transferring refined petroleum to a North Korean-controlled vessel in April of this year that is U.N.-listed,” Haley said.

“The Patriot helped the North Koreans evade sanctions by allowing them to obtain oil on the high seas without having to dock into a port since the North Korean boat was subject to a global port entry ban,” she added.

Alexey said the sanctions have nearly broken his company.

“[We’re] nearly bankrupt. We are looking for new opportunities,” he said.

He confirmed that due to the sanctions, companies were terminating contracts with Gudzon.

“Not only are overseas companies terminating contracts, Russian companies are too,” he said, adding “It’s a huge problem.”

Another high-ranking Gudzon official said the company has requested financial help from Russia’s government.

“It doesn’t look good,” he said. “Many companies fear [becoming the target of] secondary boycotts.”

“Our company has been having a hard time since the U.S. began applying sanctions on us. The Russian government has promised to help us, but all we’re doing now is waiting here and hoping that the Russian government can support us,” he said.