At first glance, the satellite photos of this docked transport ship seem harmless
enough. However, within those pink containers is a secret that North Korea wants to keep hidden.
In response to North Korea's nuclear proliferation,
the United Nations Security Council imposed sanctions against the military dictatorship
in 2006. The most extensive sanction to date was adopted in 2017. This banned the
purchase of North Korean exports, including coal, textiles, and seafood. Additionally,
North Korea could no longer import petroleum in the same quantity as it had before.
Still, global corporations seeking to conduct business with the highly
despised country found ways to use a secretive fleet of vessels to smuggle in illegal goods.
A Secret Fleet
The United Nations had reported that North Korea's network of illicit trade activities
included ship-to-ship transfers of cargo. These transfers meant to circumvent sanctions placed
on the country, rendering the international community's actions ineffective. The U.N. added
that the majority of the illegal transfers between ships commenced in the East China
Sea as boats moved from the South China Sea, closer to Lianyungang. Smartly, the reduction
in the distance reduces the likelihood of exposing North Korean vessels to Western
ships or international authorities. Furthermore, speculation surrounding the change in location for
illegal trading forced faster deliveries, which ended up being more cost-effective.
Bulk carriers, such as those identified in the photo, present a worrying challenge as they fully
demonstrated North Korea's commitment to violating the U.N. sanctions. A report on the matter stated,
[QUOTE] "The utilization of larger vessels with a carrying capacity two or three times that of the
DPRK vessels suggests that much larger quantities of illicit coal can be transshipped per voyage."
The North Korean ships use an array of advanced evasive techniques to
cover their dealings. Identity theft, illegal name-changes,
misrepresentative contracts, and misleading signals directed at boats,
satellites, and coastal stations allows North Korea to deal in plain sight.
Two-thousand-nineteen marked an increase in these illicit trade activities. North
Korea reportedly exported 3.7 million tons of coal to an unidentified nation that year,
an estimated price tag of 370 million U.S. dollars.
The Wise Honest
The ship photographed at the port is the M/V Wise Honest, a North Korean 17,061-ton bulk carrier.
It was captured at a port in Indonesia, carrying 25,500 tons of coal on board,
priced at 2.99 million dollars. It had evaded detection by registering
unlawfully by sailing without a national flag.
Indonesian port authorities noticed the discrepancy and immediately investigated.
They reported the South Korean company Enermax was the intended receiver,
which would then transfer ship-to-ship and head for the port city Balikpapan in Borneo.
Enermax stated that there was no intended import of coal on their behalf, but that
they had received an offer, [QUOTE] "someone who seemed to be a local broker in Indonesia."
Whether this allegation is true is unclear. Nevertheless, it does match up with devious North
Korean strategies to circumvent its sanctions. The U.S. Justice Department released a statement
supporting this allegation, which stated, [QUOTE] "Participants in the Korea Songi Scheme attempted
to conceal the Wise Honest's DPRK affiliation by falsely listing different countries for the
Wise Honest's nationality and the origin of the illicit coal in shipping documentation."
On August 4, 2017, further attempts to conceal the exact origin of the Wise Honest were made
by not sending out an AIS signal from the ship. It was a clear violation of
international navigation procedures. In April 2018, the vessel was seized by the
Indonesian government and handed over to American authorities the following month.
Still, South Korean and Indonesian companies weren't the only ones complicit in North Korean
illicit activities, unwittingly or otherwise. In March 2018, the Wise Honest carried coal
valued at 750,000 dollars, transporting it from Nampo, North Korea. Linked to the
payment was a U.S. financial institution in violation of American and international law.
Chinese Cloaks
Chinese companies have also been linked to North Korean vessels conducting illicit
trading. In September 2019, the Chinese Lao Chuan Zhang 717 bulk carrier was spotted near
the Jiangsu Province port, 600 kilometers from Beijing. Here, the carrier made a ship-to-ship
transfer with the North Korean Jin Hung 9. Its location was only discovered by satellite
imagery. It conducted the trade while also in the proximity of the North Korean Ever-Glory.
The Chinese ship proceeded to offload coal at a port in Hebei province, as reported by the United
Nations panel in charge of monitoring compliance with North Korea sanctions.
That same month the Fu Xing 9 was used by a Chinese shipping business. It was spotted
after meeting with North Korean vessels at sea. The Chinese ship already conducted trade despite
reports from the Chinese government that they had disrupted activity after purchasing it in June
2019. Three different visits to North Korean ports were performed by this vessel at the end of 2019.
A Security Council diplomat reportedly told VOA news, [QUOTE] "It is quite concerning
that the evidence is beginning to show that the Chinese government is either actively
supporting U.N.-prohibited activity or at the very least being criminally negligent."
American Response
According to South Korean IBK Economic Research Institute analyst Cho Bong-hyun,
[QUOTE], "North Korea doesn't have many big ships it can use for exports. If this size
of ship is seized and that seizure isn't lifted quickly, it would greatly damage North Korea."
In fact, the ship was seized. A Southern District of New York
federal court judge ordered the forfeiture of the Wise Honest,
which had already been in American custody due to its violation of sanctions.
Justifying the forfeiture, the Justice Department established that the vessel was active in illicit
coal trading. Ironically, it was a direct result of tricking American Banks. Payments
made for maintenance and upgrades to the ship were cashed in U.S. dollars, obtained through
shady dealings by North Korea using false information and resulting in no recoupment.
Now, the United States Government officially owns the Wise Honest. Assistant Attorney
General of National Security, John C Demers, stated, [QUOTE] "This order of forfeiture sinks
the Wise Honest's career as one of North Korea's largest sanctions-busting vessels,
the Department of Justice will continue to pursue other property used to violate U.S. and
international sanctions, around the globe, with the cooperation of our international partners."
How North Korea retaliates or whether it continues its illicit behaviors remains
to be seen. Speculation that the forfeiture will only strengthen North Korea's resolve to
fool countries and companies into illegally trading with them surrounds U.N. nations.