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Aug

12

Chong Chon Gang(nam Style) Sanctions

Posted by Clif Burns at 6:00 pm on August 12, 2014

Weapons found on Chong Chon Gang via http://www.un.org/ga/search/view_doc.asp?symbol=S/2014/147 [Fair Use] Avid readers of this blog will be familiar with the saga of the euphoniously named Nork vessel, the Chong Chon Gang, which was seized by the Panamanians in the Panama Canal while the vessel was attempting to carry a boatload, so to speak, of Cuban arms to North Korea. Although the Cubans claimed, ahem, that this was not a “transfer” of the arms to North Korea in violation of U.N. sanctions because they retained title to the goods, they were unable to explain why, if that were the case, they buried the missiles and other armaments under enough sugar to keep the chubby Nork dictator in sweets for the next millennium or so. The attempted suicide by the ship’s captain once the Panamanians found the buried missile parts and systems also did not do much to bolster the Cuban argument that this shipment was perfectly legal.

The U.N. Panel of Experts convened to consider the legality of the shipment brushed aside Cuba’s arguments and back in March found the shipment to be a violation of U.N. sanctions on North Korea. At the end of last month, the United States joined the party and announced a variety of additions to the SDN list arising out of the Canal incident. The two North Korean companies involved in the shipment as well as the Chong Chon Gang were designated, as were 17 other Nork ships in which the two shipping companies had an interest.

In the “Some People Are Never Satisfied” category, a blogger at Capitol Hill Cubans called the Nork sanctions “enforcement malpractice” and moaned that there were no sanctions imposed on the Cuban officials involved in the Nork shipments. A Miami Herald article provided a succinct answer to this complaint

A knowledgeable Washington official noted that perhaps Treasury did not feel it was necessary to sanction Cuban government entities and individuals because they already are under strong sanctions from the U.S. trade embargo.

Good point. Given that virtually all dealings by U.S. persons and companies with Cuban officials are prohibited under the current sanctions, what exactly did the blogger contemplate as additional sanctions here? Military intervention?

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Mar

19

UN Calls Foul on Dennis Rodman

Posted by Clif Burns at 11:45 pm on March 19, 2014

Category: Economic Sanctions • North Korea Sanctions • U.N. Sanctions

By Copyright Steve Lipofsky Basketballphoto.com [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3ARodman_Lipofsky.jpg There has been a ton of publicity regarding Dennis Rodman’s preposterous Happy Birthday Mr. Dictator tour on which Rodman visited North Korea’s paunchy dictator Kim Jong-Un to wish him many happy returns and many more years of human rights violations. Of course, no dictator’s birthday celebration would be complete without bottles of vodka and other gifts of tribute from has-been basketball stars.

The U.N. Panel report, which we previously reported here, included Rodman’s swag bags for Kim Jong-Un as violations of U.N. sanctions on North Korea, singling out bottles of vodka, Irish whisky, crystal decanters and glassware and a Mulberry handbag. Â The Panel made clear that these all fell within the sanction’s definition of luxury goods which covers spirits, high-quality lead crystal glassware and high-quality handbags. Of course, notwithstanding the sanctions, I’d like to see a picture of Kim Jong-Un sporting the Mulberry handbag.

But the U.N. Panel also took the opportunity to swat the United States on the matter, noting that the United States had not reported these gifts to the panel. Paragraph 26 of Security Council Resolution 2094 requires member states to report evidence that the states have of non-compliance with the U.N. sanctions on North Korea. The United States was mum on the Rodman gifts, just as the United Kingdom did not report the sale of a Princess luxury yacht manufactured in Plymouth, England, to the Nork dictator.

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Mar

13

Daily News Attempts Export Humor; Bombs

Posted by Clif Burns at 4:25 pm on March 13, 2014

Category: BIS • CCL • North Korea Sanctions

By Jared Kofsky (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3ADaily_News_Building-_WPIX_CW_11.JPG It must have been a slow news day on Tuesday for the New York Daily News, because the aging tabloid decided to try its hand at export humor. As you might imagine, things did not go well for the paper.

The attempt occurred in a feature called “Your Cheat Sheet,” which appears in a blog called “The Swamp” and looks at important events in DC. You know, so-and-so is testifying on the Hill, Prime Minister Muckety-Muck of Lower Lithovakia meets with USDA officials, etc. Â With that in mind, we present the joke in full:

Breaking News, so let’s parachute Anderson Cooper into: the Commerce Departmentâ€™s Bureau of Industry and Security holds a meeting of the Materials Processing Equipment Technical Advisory Committee to â€œdiscuss technical questions that affect the level of export controls applicable to materials processing equipment and related technology.â€

[Insert sad trombone sound here.]

Okay, so see the Daily News writer thought it was just hilarious that somebody would meet about “materials processing equipment and related technology.” That’s like a meeting, you know, on polynomial equations or plasma actuators or other silly egghead stuff for nerdy bureaucrats. Losers!!! Â Bring in that Anderson Cooper fellow to cover this really groundbreaking story, etc., etc.

One person who doesn’t think exports controls on “materials processing equipment and related technology” is a laughing matter is the Nork Dictator Kim-Jong Un. The UN Panel Report discussed in yesterday’s post noted that a key obstacle to Nork nuclear ambitions, and a key incentive for the country’s efforts to evade international sanctions, is that “it lacks sufficient domestic precision machine tool manufacturing capability” needed for building missiles and uranium enrichment facilities. That’s the equipment that’s in â€” yep, you got it â€” Category 2 of the Commerce Control List which covers “materials processing equipment and technology.”

The morale of this story is, of course, that export control humor should be left to the professionals.

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Mar

12

UN Panel Sticks Fork in Norks, Says They’re Done

Posted by Clif Burns at 9:53 pm on March 12, 2014

Category: North Korea Sanctions • U.N. Sanctions

Weapons found on Chong Chon Gang via http://www.un.org/ga/search/view_doc.asp?symbol=S/2014/147 [Fair Use] This blog has reported twice (here and here) on the seizure by the Panamanians of the Nork vessel, the Chong Chon Gang, by Panamanians after they discovered a boatload (so to speak) of Cuban weapons on the vessel headed for North Korea. Among the more telling aspects of the story is that the weapons were hidden under mountains of sugar and that the ship’s captain attempted suicide during the course of the search. Notwithstanding this, both the Cubans and the Norks steadfastly maintained that there was nothing to see here, that everything was on the up and up, and that everyone should just move on.

Well, the United Nations Panel of Experts convened to investigate compliance with U.N. sanctions against North Korea has decided that there was indeed plenty to see here. Its just-issued report highlights the Chong Chon Gang incident (as well as other Nork shenanigans) as evidence of persistent efforts by North Korea to evade U.N. Sanctions. Here are some interesting highlights used by the report to bolster its conclusion that the Chong Chon Gang shipment violated U.N. sanctions on the prohibition of shipments of arms and materiel by member states such as Cuba to North Korea.

The panel rejected Cuba’s risible, if not hilarious, argument that the sanction prohibiting “transfer” of arms and materiel to North Korea was not violated because Cuba retained ownership of the arms being shipped to North Korea for overhaul and maintenance. The Panel correctly pointed out that such a distinction would allow countries to lease weapons to North Korea, an absurd result inconsistent with the purpose of the sanctions.

More importantly, the panel rejected the argument by pointing to the evidence of elaborate attempts by Cuba and North Korea to conceal the nature of the shipment. This argument might be summarized as “If you don’t have anything to hide, why are you so busy trying to hide it?” Among the evasive tactics cited by the Panel (above and beyond burying the stuff under a mountain of sugar) were the following:

After discharging its cargo in Havana, the ship drifted for 10 days in the sea north of Cuba before sailing to Mariel where it took on the weapons cargo.
Although documents were found on the ship identifying the consignor and consignee of the sugar shipment, no such documents were found with respect to the concealed weapons.
The ship’s route and position were concealed by switching off the ship’s automatic identification system.
False documents were submitted to the Panama Canal Authority which omitted Mariel, where the weapons were loaded, from the list of prior ports visited.
The vessel ignored the standard practice of loading dangerous cargo, which included ammunition, rockets and explosives, at the top of the ship, Â loading it instead deep in the hold where it could be concealed by the sugar cargo. The weight of the sugar could have contributed to a catastrophic explosion, endangering the ship, its crew and nearby ships and their crew. Clearly concealment was a higher priority than safety.

There’s more in the Panel Report, including a detour involving Dennis Rodman’s Happy Birthday, Mr. Dictator celebrity tour, so stay tuned for future posts on Nork sanction evasion techniques.

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Jan

21

Wide World of (North Korean) Sports: Piste Off Edition

Posted by George Murphy at 7:23 pm on January 21, 2014

Category: China • Economic Sanctions • EU • Foreign Export Controls • North Korea Sanctions

By Mark Scott Johnson from Sydney, Australia (IMG_7688) [CC-BY-2.0] (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3AMount_Paektu7.jpg Dennis Rodman and his coterie of NBA All-Stars recently returned to the United States from North Korea after Rodmanâ€™s birthday basketball bash for his â€œfriend for lifeâ€ Kim Jong Un.Â While Rodmanâ€™s zealous zaniness has grabbed global media headlines, another sports-related development in North Korea, is more significant to sanctions and export control issues: the grand opening this month of the Masik Pass luxury ski and hotel resort.

Pictures taken of the resort show the 120-room hotel, indoor swimming pool and 11 ski runs.Â Other pictures also show, however, Italian snow plows, Canadian snowmobiles and Swedish snow cannons.Â Recent news reports began to shed light on the obvious sanctions issue: how did North Korea build a ski resort without someone violating sanctions.Â U.N. Security Council Resolution 2094 and others prohibit members from selling “luxury goods” to North Korea and even though “luxury goods” are not defined and are not limited to the specific luxury items delineated in Annex IV of Resolution 2094, it seems hard to deny that snowmobiles, snow cannons and the other accoutrements of a “luxury” resort are not “luxury goods.”

According to SkyNews, the Italian snow plow manufacturer has predictably said, â€œSnow groomers are sold directly to ski resorts and distributors and it is possible that a used snow groomer is than sold to another final user by ski resorts or distributors themselves. On this kind of business we as a producer do not have any influence, no company can avoid that this happens.â€

Western goods flowing into North Korea is not new.Â In fact, we reported last year on the curious infiltration of an Apple iMac on Kim Jong Unâ€™s desk and suggested it, like many Western goods in North Korea, came from China.Â Plausible deniability about to whom a manufacturerâ€™s customers sell its products becomes, of course, more attenuated when your business is selling â€œstate-of-the-art snow cannonsâ€ that retail for 14,000 Euros each.

U.N., U.S., E.U. and Canadian sanctions policies fail if a repressive regime like North Koreaâ€™s so-called supreme leadership continues to violate human rights but opens a ski resort to sustainÂ its control.Â Like sanctions against Iran, Cuba and other countries, a principal goal is to curtail infrastructure projects that support the sanctioned governments.Â While a ski resort is not the largest national infrastructure project, sanctions were designed to prohibit it being built and supported by Western goods and technology.

Even if the sales of the items found at Masik Pass were beyond detection of reasonable know-your-customer requirements, Italian, Canadian and Swedish enforcement authorities would at least have grounds to inquire further, especiallyÂ company records and communications involving sales to Chinese resellers that may have beenÂ possible routes to North Korea.Â While any manufacturer or retailer canâ€™t know everything about its customers, knowing more gives a company greater support to conclude that its business does not involve impermissible activities orÂ give law enforcement a reason to examine its business further.

Clif adds: Blame me, not George, for the terrible pun in the post title.

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