North Korea maneuvers to evade U.N. sanctions – experts

By Patrick Worsnip
UNITED NATIONS (Reuters) – North Korea appears to be taking elaborate measures to evade U.N. sanctions aimed at its nuclear and missile activities, arms trading and import of luxuries, U.N. experts say in a new report.
The Security Council imposed the sanctions, including arms embargoes, asset freezes and travel bans, in resolutions in 2006 and 2009, in response to North Korean nuclear tests and ballistic missile launches. This year for the first time, it listed eight entities and five people who were being targeted.
Pyongyang has denounced the measures, and six-country talks on ending its nuclear ambitions are dormant.
A report obtained by Reuters on Wednesday was the first to be written by an expert panel set up by the Security Council in May to vet implementation of the sanctions. It is due to be discussed in closed-door council consultations on Thursday.
The report said there were “several indications that the DPRK (North Korea) is engaged in trade, transactions and activities proscribed by (U.N.) resolutions … and is seeking to mask these transactions in order to circumvent the Security Council measures.”
The six experts said there were several different techniques employed by the isolated communist state to conceal its involvement.
“These include falsification of manifests, fallacious labelling and description of cargo, the use of multiple layers of intermediaries, ‘shell’ companies and financial institutions to hide the true originators and recipients,” the report said.
“In many cases overseas accounts maintained for or on behalf of the DPRK are likely being used for this purpose, making it difficult to trace such transactions, or to relate them to the precise cargo they are intended to cover.”
MONEY LAUNDERING
The experts said North Korea likely also used correspondent accounts in foreign banks, informal transfer mechanisms, cash couriers “and other well known techniques that can be used for money laundering or other surreptitious transactions.”
The report cited statements by the U.S. Treasury Department on several North Korean firms and individuals thought to be acting on behalf of others who were on the sanctions list for involvement in nuclear and missile programs.
The Korea Mining Development Trading Corp, sanctioned for involvement in ballistic missile sales, continued to operate through subsidiaries. The Kwangson Banking Corp and Amroggang Development Bank had been determined to be acting for the listed Tanchon Commercial Bank and Korea Hyoskin Trading Corp.
On illicit arms shipments, the report raised the case of the seizure of a “substantial cargo” of weapons from North Korea. It was apparently referring to arms seized in August by the United Arab Emirates from an Australian-owned ship.
The report also said the North continued to import luxury goods intended for its leadership, despite a U.N. ban. It noted that in July, Italy blocked the sale of two yachts that police said were destined for North Korean leader Kim Jong-il.
The panel, which began work just two months ago, said it would work on recommendations to the Security Council for further firms and individuals to be put on the sanctions list as well as goods whose import by North Korea should be banned.
It also promised more exact definitions of small arms — the only kind of arms Pyongyang can import under existing sanctions — as well as of luxury goods.
The 20-page document submitted to a sanctions committee grouping diplomats from all 15 Security Council countries was described as an interim report. The panel promised a full report by next May.
(Editing by Peter Cooney)