August 06, 2018 10:38
Power monopoly KEPCO is at the heart of a scandal concerning illegal shipments of North Korean coal to South Korea. Subsidiary KOEN is being investigated by the Korea Customs Service on charges of buying 9,700 tons of North Korean coal in November of 2017 and March of this year.
KOEN is a fully-owned subsidiary of KEPCO, which has now hired an outside consultancy over the issue.
The U.S. is getting more and more interested in the illicit North Korean coal shipments, and the involvement of a major state-run South Korean utility could prove hugely embarrassing for the country.
KEPCO and KOEN are adamant that they bought the coal based on the proof of origin issued by the Kremlin and believed it came from Russia. One other South Korean company and two banks are also potential targets of a U.S. investigation.
If they are blacklisted by the U.S., they would face severe limitations in doing business overseas. The U.S. could prevent other countries from doing business with them, making them virtual pariahs in the international financial industry.
Chinese telecom equipment maker ZTE almost had to shut down recently after it became the target of U.S. sanctions amid suspicions that it did business with Iran and North Korea.
One diplomatic source said, "One of the reasons for government officials recently visiting Washington was to prevent this matter from escalating further."
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