Despite sanctions, North Korea exported coal to South and Japan

North Korea shipped coal to Russia last year which was then delivered to South Korea and Japan in a likely violation of U.N. sanctions, three Western European intelligence sources said.

The U.N. Security Council banned North Korean exports of coal last Aug. 5 under sanctions intended to cut off an important source of the foreign currency Pyongyang needs to fund its nuclear weapon and long-range missile programs.

But the secretive Communist state has at least three times since then shipped coal to the Russian ports of Nakhodka and Kholmsk, where it was unloaded at docks and reloaded onto ships that took it to South Korea or Japan, the sources said.

A Western shipping source said separately that some of the cargoes reached Japan and South Korea in October last year. A U.S. security source also confirmed the coal trade via Russia and said it was continuing.

“Russia’s port of Nakhodka is becoming a transhipping hub for North Korean coal,” said one of the European security sources, who requested anonymity because of the sensitivity of international diplomacy around North Korea.

Russia’s foreign ministry did not respond to a Reuters request for comment sent on Jan 18. Russia’s mission to the United Nations informed the Security Council sanctions committee on Nov. 3 that Moscow was complying with the sanctions.

Two lawyers who specialize in sanctions law told Reuters it appeared the transactions violated U.N. sanctions.

Reuters could not independently verify whether the coal unloaded at the Russian docks was the same coal that was then shipped to South Korea and Japan. Reuters also was unable to ascertain whether the owners of the vessels that sailed from Russia to South Korea and Japan knew the origin of the coal.

The U.S. Treasury on Wednesday put the owner of one of the ships, the UAL Ji Bong 6, under sanctions for delivering North Korean coal to Kholmsk on Sept. 5.

It was unclear which companies profited from the coal shipments.

North Korean coal exports were initially capped under a 2016 Security Council resolution that required countries to report monthly imports of coal from North Korea to the council’s sanctions committee within 30 days of the end of each month.

Diplomats, speaking on condition of anonymity, said Russia had not reported any imports of North Korea coal to the committee last year.

The sanctions committee told U.N. member states in November that a violation occurs when “activities or transactions proscribed by Security Council resolutions are undertaken or attempts are made to engage in proscribed transactions, whether or not the transaction has been completed.”

Asked about the shipments identified by Reuters, Matthew Oresman, a partner with law firm Pillsbury Winthrop Shaw Pittman who advises companies on sanctions, said: “Based on these facts, there appears to be a violation of the U.N. Security Council resolution by the parties involved.”

“Also those involved in arranging, financing, and carrying out the shipments could likely face U.S. sanctions,” he said.

Asked about the shipments, a U.S. State Department spokesman said: “It’s clear that Russia needs to do more. All U.N. member states, including Russia, are required to implement sanctions resolutions in good faith and we expect them all to do so.”

The White House did not immediately respond to a request for comment.

The independent panel of experts that reports to the Security Council on violations of sanctions was not immediately available for comment.

North Korea has refused to give up the development of nuclear missiles capable of hitting the United States. It has said the sanctions infringe its sovereignty and accused the United States of wanting to isolate and stifle North Korea.

An independent panel of experts reported to the Security Council on Sept. 5 that North Korea had been “deliberately using indirect channels to export prohibited commodities, evading sanctions.”

Reuters reported last month that Russian tankers had supplied fuel to North Korea at sea and U.S. President Donald Trump told Reuters in an interview on Jan. 17 that Russia was helping Pyongyang get supplies in violation of the sanctions. (Courtesy Reuters)

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