The head of UN Panel of Experts (PoE) Hugh Griffiths on Wednesday told members of U.S. Congress that he has not seen North Korean progress towards denuclearization, despite stricter sanctions regimes and two summits between Washington and Pyongyang.
Speaking at a House of Representatives Committee on Foreign Affairs hearing on how to make DPRK sanctions more effective, the UN investigator answered questions on a wide range of sanctions related topics.
But toward the start of the question and answer session, Griffiths said he had not seen either the current sanctions or diplomatic tracks yield results with regards North Korea’s nuclear capabilities.
Highlighting important areas where more work needs to be done, the head of the UN panel said both maritime and financial sanctions enforcement measures needs to be improved.
“Why is important to monitor vessels? Because it’s not happening in so many jurisdictions, and it’s not just about North Korean sanctions,” Griffiths said.
“It’s a global issue and I think it’s high time that there’s more governance on the high seas. Otherwise, Chairman Kim is going to have room to maneuver for some time to come and it’s just very important to follow the money. And maritime transport is what makes a lot of it possible right now.”
Griffiths’ testimony comes following the publication of the PoE’s most recent report earlier in March, which noted increases in the size, scale, and sophistication of the DPRK’s maritime sanctions evasion techniques.
The combination of numerous sanctions busting methods allowed North Korea to continue importing oil products and exporting raw materials like coal in breach on UN resolutions.
“The North Koreans have approached sanctions evasion in a very intelligent manner and they look at the global system, the global financial system … and they look for the gaps,” Griffiths said.
“They are sophisticated, and you only have to look at the cartels, the narco-traffickers, to see how they conduct their trade so successfully, and I would say that the North Korean masterminds behind their illegal activities approach it in the same way.”
To help tackle North Korea’s illicit maritime activities, Griffiths advised increased monitoring among a wide array of actors in the maritime and commodity trading space, from maritime insurance providers to flag states, vessel owners, operators and commodity traders.
Specifically, the UN investigator noted that banks involved in handling transactions could do more to make North Korea’s illicit trade more challenging.
“We recommend … at least for ship-to-ship transfers that global banks can easily insert a clause – which is basically a box tick – that will force all the oil companies, all the global commodity trading companies who use leveraged loans and financial credit instruments to buy and sell the fuel, the banks can introduce something to force their clients to undertake more measures,” Griffiths said.
BANKS AND HUMANITARIAN AGENCIES
During the hearing, Griffiths also voiced his concern about the vulnerability of the global banking system, which North Korea is attacking via multiple avenues.
“The near five years I’ve worked on the Panel causes me great concern regarding the security of the international banking system, the level of due diligence and various banks’ genuine anti-money laundering capacity,” Griffiths told the assembled lawmakers.
“The North Korean hacking of banks is not only sophisticated in terms of how they area breaching bank security software systems, but they are also organizing small armies of people around the world to withdraw very quickly from ATM machines.”
The members of congress also asked the Griffiths which UN member states were violating UN resolutions, and while the head of the Panel voiced concern over several African nations, he noted that much of the recent evasion seemed to be in the private sector.
“It’s more a case of individuals and companies seeking to make money from sanctions evasion by cooperating with the North Koreans,” Griffiths added.
“In absolute honesty, there are only a few sanctions violations by the North Koreans in certain African or Middle Eastern states which were providing either ballistic missile or conventional arms technology or services, whereby the senior leadership of the ministry of defense of that country and thereby the office of the president or state security would have been aware of what the North Koreans were doing there.”
On questions of how humanitarian aid is affected by the current sanctions regime, Griffiths pointed out the proposed creation of a white list that could allow for some relief related equipment and transfers to be fast-tracked.
Current UN sanctions on trade with North Korea are quite broad and prohibit the import and export of all types of machinery, industrial and electrical equipment.
Aid agencies and NGOs can subsequently face hold-ups and delays when attempting to move humanitarian equipment into the DPRK.
“Broadly speaking where the problem has been with equipment, rather than food aid … and that’s why the Panel has recommended the introduction of a so-called white list of goods that would be automatically subject to exemption,” Griffiths said.
But the UN investigator also noted that North Korea’s smugglers were adept at moving machinery in and out of the country and indicated that Pyongyang’s priorities were likely not aligned with those of humanitarian agencies.
“The humanitarian agencies by coming to the Security Council, they play the game and ask for exemptions. The smugglers, they don’t. Somehow they are able to import into North Korea, very large Rolls Royce Phantoms in shipping containers. And if they can bring in the Mercedes and Phantoms in shipping containers, that means they can import the smaller items for the nuclear and ballistic programs,” Griffiths said.
“The humanitarian agencies are playing the game, but I would caution we should be careful with the humanitarian discourse on North Korea because we see there what the elite is prioritizing in terms of imports. And it’s not necessarily for the benefit of all these hungry people you’re talking about.”