The latest report of the United Nations Security Panel of Experts on Resolution 1874 (2009), which relates to North Korea, will dispirit any who harbour the hope that the sanctions regime is ‘working’.
The report, much leaked in recent weeks, concludes that there has been a massive increase in ship-to-ship transfers of fuel, and that ‘financial sanctions remain some of the most poorly implemented and actively evaded measures of the sanctions regime.’
Inter alia it finds that ‘individuals empowered to act as extensions of financial institutions of the Democratic People’s Republic of Korea operate in at least five countries with seeming impunity. The Reconnaissance General Bureau continues its international financial operations by transferring funds from accounts closed in the European Union to those held at financial institutions in Asia [and] the global operations of Glocom and the Malaysia-Korea Partners Group of Companies (MKP) continue despite the Panel’s past reporting on their illicit activities and show the ongoing use of overseas companies and individuals to obfuscate income-generating activities for the regime of the Democratic People’s Republic of Korea.’
Ship-to-ship transfers, it says, involve increasingly advanced evasion techniques:
‘The disguising of vessels through ship identity theft and false Automatic Identification System (AIS) transmissions is not being taken into account by most global and regional commodity trading companies, banks and insurers, whose due diligence efforts fall extremely short. The manipulation of vessel AIS transmissions remains an overarching feature of illegal transfers, contrary to International Maritime Organization (IMO) regulations governing safety of life at sea, which require that AIS be in operation at all times. This highlights weak monitoring by flag States.’
In addition, it says, ‘[I]nsurers do not monitor the AIS of the vessels for which they provide coverage and services. Other methods of evasion include physical disguise of tankers of the Democratic People’s Republic of Korea, the use of small, unregistered vessels, illegal name-changing and other forms of identity fraud, night transfers and the use of additional vessels for transshipment.’
The report is at: https://undocs.org/S/2019/171