Daesung International Trade, a South Korean company on the U.S. sanctions list, is under scrutiny by South Korean authorities for allegedly exporting strategic goods to Russia without adhering to mandatory reporting and licensing protocols. The company’s recent exports to Russia included strategic goods such as CNC (computer numerical control) milling machines, which can be used to manufacture weapons.
Strategic goods are dual-use goods, technology, and software that can be used for both civilian and military applications and contribute to the proliferation of weapons of mass destruction. Under current law, strategic goods must be licensed by authorities before they can be exported.
Daesung International Trade exported five items classified as strategic goods under the Harmonized System of Commodity Classification (HS CODE) from 2022 to 2023, according to data by analytics firm ImportGenius on Mar. 5.
ImportGenius specializes in analyzing import and export data from the customs administrations of 18 countries. The company’s data has been used to detect sanction violations in many countries, including the Netherlands. The five transactions of Daesung International Trade were pinpointed using data on exports ‘from Korea to Russia’ obtained from the Russian Customs Service.
“Machine tools such as milling machines are items that require examination before leaving the country, regardless of the destination,” said an official from the Korean Security Agency of Trade and Industry (KOSTI). “Milling machines can be used for general industrial purposes, but they can also be utilized to make missile parts or parts related to nuclear weapons.”
Gimhae-based Daesung International Trade made headlines when it was added to the U.S. Bureau of Industry and Security’s “Entity List.” The company’s CEO is a Pakistani who has lived in South Korea for many years. He claimed that the company had “never done business with Russia and mainly exported to India.”
The Korean Ministry of Trade and the Korea Customs Service are conducting a detailed investigation to determine whether the company breached Korean trade and customs laws. “We are focusing our investigation on Busan Customs to see if the situation involves both charges,” said a government official.
