Vessels that appear to be directly controlled by North Korea are making use of South Korean ports and waterways, using numerous techniques to skirt around measures put in place after the sinking of the Cheonan in 2010, an NK News investigation can reveal.
Trade interactions between the two Koreas should be almost non-existent after former President Lee Myong Bak issued the May 4 sanctions.
“Under these circumstances, any inter-Korean trade or other cooperative activity is meaningless,” Lee said in 2010, before also adding North Korean ships would not be allowed to use South Korean waters.
Analysis of data from Marine Traffic shows that while vessels sailing with North Korean flags do adhere to the sanctions, others appear to circumvent the restrictions by exploiting a loophole in maritime law.
North Korean ships have long been known to sail under flags of different countries, a practice known as having a ‘flag of convenience’ (FOC). Reflagging in this way is fairly common in the maritime industry, as it generally allows ships to circumvent safety and environmental laws.
The DPRK uses flags of convenience in combination with networks of paper companies usually based in China and Hong Kong to hide the identity of some of its vessels. Using these methods, a number of ships seem to use South Korean waterways with relative frequency.
It appears that while the May 4 measures are strict on North Korean flagged ships, sailing under a FOC makes matters more complicated for the South Korean authorities.
“We are aware that there are North Korean vessels traveling under flags of convenience, but this is a bit more sensitive,” a government source familiar with the maritime industry told NK News on the condition on anonymity.
“We may confront and stop them if there is reason to believe they are carrying contraband -weapons and such – but otherwise the most we can do is monitor,” the source added.
The loophole indicates that while North Korean flagged ships can’t usually move through South Korean waters, vessels sailing under FOCs have more freedom. How closely the suspect vessels are monitored is unclear, but ultimately it is the duty of South Korea’s intelligence agency (NIS) and the Ministry of Unification.
“We, along with the Port Authorities, do the monitoring, but the comprehensive list of ships being monitored is managed by the NIS. They send out directives to various branches if there are any specific (monitoring) tasks of this kind to be done,” the source continued.
Though no one in South Korea’s Port Authorities would go on record, NK News understands that none of the vessels making use of South Korean ports were crewed by North Koreans, indicating that if the are vessels controlled by the DPRK, they also hire foreign crews to staff them.
THE USUAL SUSPECTS
The 5000 tonne Fu Hong is one of the most frequent visitors to South Korean ports and is also one of the easiest ships flying a FOC to link with the DPRK. According to the NK News vessel tracker, the Fu Hong recently left Dandong, a city on the Chinese side of the Sino-North Korean border for Busan.
Although ship inspection records list the ship’s owner as the Hong Kong based Dahan HK Shipping, the Equasis maritime database shows that Dahan has a care of address back to the Pyongyang based Korea Samhung Corp.
The small North Korean company manages just two ships, the Fu Hong and the North Korean flagged Song Un.
The Fu Hong was also mentioned previously in the UN Panel of Expert’s (PoE) 2013 report. The ship was suspected by the PoE to be controlled by the DPRK after it changed its flag from North Korean to Cambodian in 2012.
Despite making frequent use of Incheon, Busan and Pohang, South Korea’s largest three ports, the Fu Hong has never once been inspected by South Korean port authorities.
This is curious given the Fu Hong’s poor safety performance. Having been detained twice since the start of 2013 – most recently in August after a Japanese inspection yielded 66 safety and environmental deficiencies – the Fu Hong should prove a natural target for South Korea’s Port Authorities.
A further vessel with seemingly clear ties to the DPRK, the Karo Bright, also left the South Korean port of Pyongtaek on the November 3.
Like the Fu Hong, the Karo Bright has a Pyongyang based registered owner, Unphasan Shipping and was flagged in the PoE’s 2013 report. According to Marine Traffic, the ship is currently called the Amur, indicating that it may be in the process of changing its name.
THE COMPANY WEB
Investigation into the Karo Bright’s management structure potentially sheds some light into how the North Korean web of front companies is maintained. As reported previously, the ship’s Hong Kong based management-company Aoyang Marine bears many of the hallmarks of a North Korean front company.
It shares management duties of one ship, the Senyo Maru, with the similarly named Aoyang International. The two companies have a lot in common, they were incorporated within two weeks of each other, and share the same Hong Kong address.
Investigating their annual returns also shows that two men Jack Ka Yu, and Lui Wan Ching appear as Director and Corporate secretary on one company, but have their roles reversed in the other.
One striking difference between the two companies is the amount of money each has in shares. While Aoyang Marine has the minimum share capital required to set up a company in Hong Kong, HKD 10,000 ($1289 U.S.), Aoyang international has more than HKD 38,000,000 ($4,900,000 U.S.) behind it.
The majority of the shares are split between a Chinese company and a British Virgin Islands company simply called “Wealthy International”.
The Senyo Maru was also in South Korean waters this week, along with another member of Aoyang International’s fleet, the Jin Ba Hai 3. The ship was last seen heading past South Korea’s Pohang port, listing Wonsan in North Korea as its destination.
HUNCHUN SINO UNITY
Many of the companies that appear to be trading with North Korea often have less defined links back to Pyongyang. The Hong Kong Based Hunchun Sino Unity Shipping manages nine ships, one of which left South Korea’s Pyongtaek port on October 22.
The exact relationship between Hunchun Sino Unity Shipping is difficult to make out, though North Korean ports appear to be the fleet’s primary destination.
Over the last two weeks, five of its vessels were last seen heading to Pyongyang, though stopped transmitting AIS some distance from the coast, and one of their vessels the New Global was even mentioned in the Rodong Simnun, North Korea’s state newspaper.
Hunchun Sino Unity is just one of numerous companies operating out of Hong Kong that share similar management structures, addresses and shipping routes to the DPRK. Many of the vessels they own pass through South Korean waters without visiting ports along South Korea’s east coast.
As South Korea claims a maritime border 24 nautical miles from its eastern shore, these ships often pass through South Korean waters on their way to the DPRK. The addition of FOCs however makes enforcement difficult in these instances also.
In an article written by Myung-Suk Ko, Director General, Equpment & Technology Bureau, (of the now defunct) Korea Coast Guard Headquarters, Myung acknowledges that while North Korean flagged ships have been escorted from South Korean waters in the past, vessels sailing under FOCs are a more complicated issue.
“In this case, if the North Korean ship were registered under a third flag country, the expulsion of this ship could be a problematic factor,” the article reads.
This grey area surrounding flags of convenience likely presents not only problems with regards trade, but also has security implications. The fact that North Korea employs FOCs on many of its vessels has not gone unnoticed by hawks on the South Korean right who call for stronger maritime surveillance, citing the DPRK’s long history of sea borne incursions in South Korea throughout the 1970s and 80s.
More recently in 2012, the Cambodian flagged Harmony Wish was caught carrying scud missile launchers to North Korea along with a letter addressed to Kim Jong Un. While at the time its management company was reported in some news outlets as Dalian Qingsong Co, ship inspection records from the same show that the vessel is administered by the Dalian based Harmony Growing Ship.
Though at the time the ship did not pass through South Korean waters, it was docked in Pohang port along with its sister ship the Harmony Rich on October 31. Though unlikely to be directly owned by North Korea, the case highlights how the murky nature of the shipping industry can give the DPRK’s procurement network room to breathe.
Additional reporting by Ye Seul Byeon and Max Kim
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