This story has been updated to include additional comment from Joshua Stanton
The U.S. on Thursday announced it had seized an impounded North Korean vessel which was used to smuggle DPRK coal and import heavy machinery.
The Department of Justice (DOJ) filed a civil forfeiture action against the DPRK-flagged Wise Honest, as payments made to support the ship had been cleared through the U.S. financial system.
“This sanctions-busting ship is now out of service,” Assistant Attorney General for National Security John C. Demers said in a statement released by the Justice Department.
“Today’s civil action is the first-ever seizure of a North Korean cargo vessel for violating international sanctions,” U.S. Attorney Geoffrey S. Berman for the Southern District of New York added.
According to the Justice Department, the ship was involved in sanctions breaking behavior since at least 2016, smuggling coal in breach of UN resolutions under the auspices of the Korean People’s Army.
The Department of Justice said it could seize the vessel as payments for “maintenance, equipment, and improvements of the Wise Honest were made in U.S. dollars through unwitting U.S. banks.”
The complaint adds the payments were moved correspondent banks located in the U.S., causing them to breach the prohibition of on the export of financial services “to or for the benefit of North Korea.”
“Although barred from doing business in this country, North Korea continues to violate U.S. and international sanctions while simultaneously taking advantage of unwitting U.S. companies,” Assistant Director John Brown of the FBI’s Counterintelligence Division said in the Justice Department statement.
“The FBI is committed to ensuring that North Korea be held responsible for their blatant disregard for U.S. law.”
At the time of writing, the Department of Justice had not replied to request for comment on what Washington intended to do with the Wise Honest or with further information on the vessel’s role in heavy machinery imports to the DPRK.
The Wise Honest’s owners, the Korea Songi Shipping company is a part of the Korea Songi General Trading Corporation which was designated by the U.S. Office of Foreign Assets Control (OFAC) in 2017 for its role in coal smuggling.
“The Korea Songi Scheme allowed North Korean companies to export raw natural resources, notably coal, which provide a critical source of revenue for DPRK-based companies and the North Korean government,” the complaint reads.
“In return, large shipments of heavy machinery were returned to North Korea using the same vessels, for delivery to Korea Songi General Trading Corporation.”
OFAC also determined that Korea Songi was a subordinate company to the Korean People’s Army.
The 17,000-tonne cargo ship had been impounded by the Indonesian authorities last year, according to a UN Panel of Experts (PoE) report published in March.
It was seized while carrying 25,000 tonnes of North Korean coal, using multiple sanctions evasion techniques to disguise the origin of the trade.
“The ship was inspected and found to be registered under two jurisdictions, one set of registration and crew documents under the Sierra Leone flag, the other under the DPRK flag,” the PoE wrote.
“The vessel was reported as sailing with the AIS ‘turned off during the ship’s journey into Indonesian territorial waters’ and that ‘no report was made to the destined port authority for proper ship clearance.'”
Vessels are typically required under maritime law to broadcast their locations at all times in order to help prevent collisions at sea, though North Korea’s ships regularly sail with their location transponders switched off.
According to the NK Pro ship tracker, the Wise Honest hasn’t advertised its location to terrestrial tracking systems since July 2017, nearly a year before it was impounded by the Indonesian authorities.
Since 2015 it has mainly sailed around Asian waters and even called in at South Korea’s Busan port in March of that year.
The PoE noted the complex network behind the Wise Honest’s trade and how the coal it carried was intended for a ship-to-ship transfer with a Russian vessel, with the end destination listed as a South Korean company who denied being involved.
And while the ship’s captain Kim Chung Son was last year charged with “knowingly hoisting a false flag,” reporting by Voice of American (VOA) last month revealed he had been released and that the smuggled coal had been handed over to a local broker.
That broker, the UN Panel of Experts (PoE) reported in its annual report in March, has been informed that the coal must be seized and that he is not permitted to sell it.
In their recently released sanctions implementation report, the Indonesian government said they had begun repatriating the crew after the conclusion of legal proceedings on February 19.
While the seizure’s announcement directly follows two recent North Korean missile tests, one expert pointed out how the connection is unlikely to be more than a coincidence.
“The magistrate issued the warrant last July (and) the FBI and the DOJ’s opportunity arose in April of 2018 when the ship tried to land in Indonesia,” Joshua Stanton, an attorney, and author of the One Free Korea blog told NK News.
“It’s (also) the Southern District of New York. SDNY doesn’t care. It’s so notorious for its independence from Washington that even DOJ attorneys jokingly call it the ‘Sovereign District of New York.'”