The two information technology companies are actually North Korean-controlled entities, the Treasury Department said in a statement Tuesday that accused the Russia-based company Volasys Silver Star, China-based China Silver Star and its CEO Jong Song Hwa of violating US sanctions.
"These actions are intended to stop the flow of illicit revenue to North Korea from overseas information technology workers disguising their true identities and hiding behind front companies, aliases, and third-party nationals," Treasury Secretary Steven Mnuchin said in a statement.
He warned the "IT industry, businesses, and individuals across the globe to take precautions to ensure that they are not unwittingly employing North Korean workers for technology projects by doing business with companies like the ones designated today."
Defense officials say North Korea is regularly employing "deceptive tactics to evade UN sanctions" with ship-to-ship transfers, and while the US and allies have been working quietly to thwart that smuggling, the effort will now become more public in an effort to "name and shame" Pyongyang and its enablers.
The US has been using sanctions to maintain pressure on Pyongyang to give up its nuclear weapons and ballistic missile program, even as it continues to engage in diplomacy.
"The United States will continue to fully enforce and implement sanctions until we have achieved the final, fully verified denuclearization of North Korea," Mnuchin said Thursday.
The UN Security Council has noted that revenue generated from North Korean workers overseas contributes to the country's nuclear weapons and ballistic missile programs.
The Treasury announcement said that North Korea sells a range of IT services and products abroad, including website and app development, security software, and biometric identification software that have military and law enforcement applications. And it urged caution, warning businesses to be aware that North Korean firms use deceptive practices, disguising themselves through the use of front companies, aliases, and third-country nationals who act as facilitators.
CNN's Ryan Browne contributed reporting.