North Korea sanctions

Smuggling operations at sea targeted in latest UN sanctions against North Korea

Member states told to use ‘new tools’ to stop illegal trade of banned products including textiles, seafood and coal

PUBLISHED : Tuesday, 12 September, 2017, 10:20pm
UPDATED : Wednesday, 13 September, 2017, 9:05am

The UN has called on member states to use “new tools” to clamp down on smuggling activities at sea under the latest sanctions against North Korea following its nuclear test last week.

Traders along the border between China and North Korea said Chinese authorities had already cracked down on smuggling of products including seafood and coal after previous rounds of sanctions and now they expect the screws to be tightened further.

The United Nations Security Council resolution passed on Monday said North Korea had been smuggling coal and iron ore to other countries by sea using sophisticated evasion techniques.

“The resolution provides member states new tools to stop high seas smuggling of prohibited products,” it said.

Key points of latest UN sanctions against North Korea

Suspicious vessels would be stopped for inspection at sea or in a port and they could have their assets frozen, be denied port access, deregistered or hit with other penalties if they failed to cooperate.

One source familiar with the situation in Dandong, a city in Liaoning that borders North Korea, said the authorities were already getting tough on smugglers.

“There have been more inspections in recent days,” the source said.

The UN has imposed seven rounds of sanctions against North Korea since 2006, but smugglers have managed to get around the bans.

In Dandong, tonnes of North Korean seafood are being smuggled into China every night despite the imposition of UN sanctions on August 15 and a resulting Chinese crackdown on the trade.

The boss of one seafood trading company told the South China Morning Post earlier that business had slowed since the ban, but some traders were entering the North Korean trade zone during evening high tide and loading up with seafood before returning to Dandong.

The fishy side of China’s ban on North Korean imports

A panel of UN experts said in a report released over the weekend that North Korea had smuggled commodities worth some US$270 million from February to August – to China and other countries including India, Malaysia, Sri Lanka.

The report also said North Korea had been rerouting coal to other countries including Malaysia and Vietnam, and continued to export iron ore and steel products to China, Egypt, France, India, Ireland and Mexico. China, Sri Lanka and India also imported some minerals in violation of sanctions.

North Korea exported a total of US$305,713 of iron and steel to China, Egypt, France, India, Ireland and Mexico between October and May, violating a sanction imposed in 2016.

The latest sanctions also ban joint ventures with North Koreans, along with technology transfers and other economic cooperation.

They will also cut off another US$500 million per year from the 100,000 North Koreans working overseas, who can no longer be hired. Those already working abroad can continue until their permits expire.

Armageddon? There’s more to Kim than nuclear tests

The commerce ministry late last month banned individuals and businesses from setting up new joint venture companies with North Koreans in China. It also said it would not approve applications for new or expanded investment in North Korea by Chinese companies.

The amount of North Korean investment in China is small and has declined in recent years. It fell from US$11.2 million in 2010 to US$290,000 in 2014, and then to just US$70,000 in 2015, according to commerce ministry data.

Sun Xingjie, who specialises in Korean affairs at Jilin University, said cutting off these resources could be painful for Pyongyang but it was unrealistic to expect its underground trading and financial network would be completely shut down.

“Historically we have seen these type of activities will continue despite the sanctions,” Sun said.

“But for the Chinese government, if they want to fully enforce the latest resolution they will have to get tough on smugglers and underground finance.”

Additional reporting by Choi Chi-yuk