North Korea shipped coal to South with the help of Russian Intelligence [REPORT]

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Multiple security sources have reported to Reuters that North Korea has utilized connections in Russian intelligence to defy UN sanctions.

According to reports, last year North Korea shipped coal to South Korea and Japan via connections with Russian intelligence. North Korean coal was allegedly shipped to the Russian ports of Nakhodka and Kholmsk before being reloaded and taken to Japan and South Korea. One European source told Reuters, Nakhodka “is becoming a transshipping hub for North Korean coal.”

Coal exports from North Korea were banned by the UN last August, but the coal exports are believed to have arrived in Japan and South Korea in October, 2017. A source claims the North Korea shipments to Japan and South Korea via Russian intelligence are ongoing.

The UN Sanctions

The UN Security Council, of which Russia is a permanent member, banned North Korean coal exports on August 5th, 2017.

In September, amid concerns over smuggling, ship-to-ship transfers at sea with North Korean vessels were banned altogether. According to Reuters, last month, Russian tankers also supplied fuel to North Korea via at sea ship-to-ship transfers. President Donald Trump told Reuters on January 17th, that Russia was helping North Korea, violating sanctions, an accusation Moscow denies.

Despite the sanctions, experts believe North Korea is still participating in smuggling and illicit trade. Last September, a panel of experts reported to the UN Security Council that North Korea is “deliberately using indirect channels to export prohibited commodities, evading sanctions.”

Representatives of the Russian government deny the allegations, insisting that Moscow is complying with the sanctions. Dmitry Peskov, a Kremlin spokesman, told reporters, “Russia is a responsible member of the international community.”

Rare minerals, oil, seafood, and other exports from North Korea have also been banned under UN sanctions.

How Was the Coal Smuggled?

After arriving at Russian ports, the smuggled coal went through a convoluted process before ultimately arriving in Japan or South Korea.

One of the ships docked at Kholmsk three separate times between August and September, but did not pass Russian customs, presumably due to the UN sanctions. The coal from the North Korean vessels was then unloaded and reloaded onto Chinese ships. The Chinese vessels indicated to Russian port control that their destination was North Korea. Instead, the Chinese ships sailed to South Korea, specifically to the ports of Incheon and Pohang.

Reloading onto Chinese ships was a key element of the smuggling scheme, seeming to implicate China.

China’s Involvement

Russia isn’t the only country accused of violating sanctions with North Korea. In December, reports out of South Korea and the US indicated that China had been exchanging fuel with North Korean ships at sea. President Trump tweeted, “Caught RED HANDED – very disappointed that China is allowing oil to go into North Korea. There will never be a friendly solution to the North Korea problem if this continues to happen!”

On Friday, a spokeswoman for the Chinese Foreign Ministry, Hua Chunying, denied knowledge of the smuggling scheme with Russian intelligence. She went on to reiterate Beijing’s commitment to the sanctions, insisting that if a Chinese individual or company were caught violating the sanctions, China would take legal action against them.

Sources seem to imply that China is adhering to the sanctions, as promised. A European security source told Reuters that the back channel with Russian intelligence developed as China has acted to constrain exports from North Korea, “The Chinese have cracked down on coal exports from North Korea so the smuggling route has developed and Russia is the transit point for coal.”

China is North Korea’s closest ally and trading partner. According to the Observatory of Economic Complexity, coal makes up the largest share of North Korea’s exports at 34%. As of 2015, OEC estimates China received 83% of North Korea’s exports. The second largest recipient was India at 3.5%.

US Sanctions

The Trump administration has been leading the charge to sanction North Korea. Wednesday, The US revealed new sanctions against the communist regime. 16 individuals were sanctioned, including Chinese, North Korean, Georgian, and Russian citizens. An additional 9 companies were sanctioned, from China, Thailand, and North Korea, as well as 6 ships bearing North Korea’s flag.

Secretary of the Treasury Steven T. Mnuchin said in a statement about the sanctions:

Pursuant to UN Security Council Resolutions, the U.S. government is targeting illicit actors in China, Russia, and elsewhere who are working on behalf of North Korean financial networks, and calling for their expulsion from the territories where they reside. We are sanctioning additional oil, shipping, and trading companies that continue to provide a lifeline to North Korea to fuel this regime’s nuclear ambitions and destabilizing activities.

The Trump administration hopes that sanctions will cut off funding to North Korea’s missile program. Pyongyang claims they now have ICBMs capable of reaching anywhere within the continental United States.

Japan & South Korea

Japan and South Korea have been close allies to the US as tensions with North Korea have escalated. The smuggling reports raises questions over which companies profited and how much their respective countries knew.

An official for the South Korean foreign ministry said in regards to the allegations:

Our government is monitoring any sanctions-evading activities by North Korea. We’re working closely with the international community for the implementation of the sanctions.

Ministry officials, however, have declined to comment on whether the ministry is aware of the coal shipments.

Japanese officials have yet to issue an official statement.

Reports indicate that at least 60,000 tonnes of North Korean coal have moved through Russian ports since August. Kremlin aligned lawmakers have written off the reports as “conspiracy theories” and the latest phase of the “information war” against Russian.

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