How to make shipping sanctions against North Korea work

By now, diplomats at the U.N. have begun wrangling over the shape of the next North Korea sanctions resolution (let’s hope they at least vote before North Korea’s next nuclear test). Meanwhile, efforts to enforce the last resolution have lost momentum. With regard to both banking and shipping sanctions, the Obama administration doesn’t appear to have done much to encourage other U.N. member states to comply.

I’ve said before that following the money matters most, but North Korea’s transportation sector is another important pressure point. North Korea has long used its merchant fleet for smuggling drugs and weapons, and it has evaded law and sanctions enforcement by relying on reflagging — the registration of its ships under flags of convenience. States known to reflag North Korean ships include Panama, the Republic of the Marshall Islands, Tanzania, Sierra Leone, Cambodia, Mongolia, Kiribati, Tuvalu, Belize, and the Republic of Palau.

In March, the U.N. Security Council approved Resolution 2270, paragraph 19 of which requires U.N. member states to de-register ships that are “owned, operated or crewed by” North Korea. The U.S. Treasury Department followed this by imposing sectoral sanctions on North Korea’s transportation industry under Executive Order 13722. So by now, no one should be reflagging North Korea’s ships, right?

Wrong.

Shortly after the resolution passed, Yonhap reported that an unnamed U.N. member state had canceled the registrations of North Korean ships, but just four days after UNSCR 2270 passed, Tanzania reflagged the notorious, U.N.-designated North Korean smuggling ship Dawnlight (now sailing as the First Gleam). The Dawnlight was previously operated from Singapore, which has since pledged its full cooperation with enforcing UNSCR 2270. The ship is now operated by a Marshall Islands based shell company, Sinotug Shipping.

As Claudia Rosett pointed out, the North Korean-flagged ships that are making regular voyages between North Korea and Iran probably aren’t being inspected as required.

Two North Korean ships, designated by the Security Council as the Jin Teng and the Jin Tai, have switched registrations from Sierra Leone to Belize. Worse, UNSCR 2270 requires members states to confiscate designated ships on arrival, but the ships have since landed in the Philippines, Japan, Vietnam, China and Indonesia. In the case of the Philippines, the authorities initially seized the Jin Teng, but China lobbied the U.S. to have its designation removed. Both ships are now operated by a China-based entity called Blue Ocean Ship Management.

Cambodia, the top registrar of flags of convenience for North Korea’s shipping fleet — ironically, through the Busan-based Cosmos Group — claims to have suspended reflagging operations pending a nationalization of the reflagging procedure. The suspension was not specific to North Korea, and I’ve seen no reports that it has de-registered North Korean ships. That the South Korean government has no recourse to influence the conduct of a company based in Busan is perplexing. Seoul has lobbied other governments to enforce sanctions; maybe it ought to set a better example itself.

In August, a month after Park Geun-hye visited Mongolia, the Joongang Ilbo reported that “The Mongolian government cancelled contracts with 14 North Korean ships to operate under its flag of convenience.” NK News’s Leo Byrne suggested that the ships may have switched their registrations to Togo, Cambodia, Sierra Leone, Kiribati, or particularly, Tanzania. Byrne specifically found that Tanzania had registered four new North Korean ships since the approval of USNCR 2270. The list of compliance reports required under UNSCR 2270 shows no report for Tanzania, although there is a lag time between submission and publication of the reports. Last week, Byrne reported that that Tanzanian-flagged, North Korean-crewed Jin Long had caught fire off the Chinese coast, and traced its management to a shell company in Hong Kong.

What measures would help enforce the sanctions? One is old-fashioned diplomacy. I’ve seen almost no reporting at all that our diplomats have lobbied U.N. member states to comply with UNSCR 2270. Contrast this with 2006, when Treasury Department officials went on a world tour, warning bankers and finance ministers to steer clear of North Korean funds.

A second alternative would be to follow the EU’s lead and freeze the assets of North Korean insurers. No insurance usually means no registration and no landing.

A third option would be for the next UNSC resolution to simply deny landing rights to vessels owned, operated, crewed, or flagged by North Korea. If North Korea didn’t have a shipping industry at all, it would have to rely on third-country shippers, who would be more averse to the risk of sanctions violations.

If all else fails, the Obama administration must be willing to use EO 13722, or section 104 of the North Korea Sanctions and Policy Enhancement Act, to impose secondary sanctions on ship registries that don’t comply with UNSCR 2270.

2 Comments

  1. Enough with the sanctions. Barack Oboma has been a decent, in some ways a very good president. But his policy regarding North Korea has been a total failure from the beginning. It cannot continue. Sanctions don’t work when the leader of a country knows less and cares even less about how his mignons live than his enemies do. Kim Jong Un was raised in Switzerland in a Upper Middle Class neighborhood where children played basketball and video games. These are luxuries the children of North Korea know nothing about. Kim Jong Un has never progressed beyond basketball and video games, but now the basketballs are nuclear weapons and the video games are the skies of a 21st century battleground. Kill him, lock him up, whatever you want but just GET RID OF HIM ALONG WITH THE KIM DYNASTY. If he continues his current path (and if he is alive, there is no reason to think otherwise), he will have the power to bring about a nuclear war. Sanctions won’t work then and they don’t work now either.

    What to do about North Korea ?

    1) Guarantee China they will not have 40 million refugees at their door and make China understand there is no place for North Korea to exist in the current world.
    2) Remove Kim dynasty from power and replace with interim government headed by US or South Korea.
    3) Align the interests of New North Korea with those of South Korea.
    4) US,South Korea and Japan must bear the cost of a New North Korea-eventually they will benefit far more than it cost when Korea is unified.




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