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Jacob Fromer
Jacob Fromer is NK News's Washington DC correspondent. He previously worked in the U.S. Senate.
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Analysis KP or KR? Typos land countries in hot water for breaching North Korea sanctionsSome countries suspected of violating DPRK trade sanctions may simply have listed wrong Korea in their customs data Jacob Fromer April 28, 2020 NK News Earlier this month, the UN Security Council (UNSC) released an annual report documenting North Korea’s efforts to keep millions of dollars flowing into the country despite punishing global sanctions — and, in the process, the lengths Pyongyang and its trading partners have gone to cover their tracks. But one section of the 267-page report showed something rather atypical for the normally murky world of sanctions violations: instead of hiding what they were doing, multiple countries named in the report openly declared, in their public customs data, that they had violated UN resolutions and traded illicit goods with the DPRK. Transparency is often the right way to avoid a UN investigation, but in this case, the United Nations experts who drafted the report had questions. UN sanctions ban many types of trade with North Korea. Put in place as punishment for the country’s nuclear weapons program, the North is not allowed to sell its seafood, textiles, iron, or coal, among other goods; they are mostly not allowed to buy metal goods and industrial machinery from abroad either. The UN report listed 25 countries with potential sanctions violations reported in their trade data. They had a range of replies for the UN: South Africa, for example, said it had sent the inquiry to its capital, and China, which is shown throughout the report to be complicit in helping the DPRK evade sanctions, said some of their publicly declared exports had received prior humanitarian sanctions exemptions. Other nations didn’t respond at all. But for five of the countries — Brazil, Germany, Spain, Kazakhstan, and the UK — the excuse was something else entirely: apparently, they mixed up the two Koreas on their customs forms. When companies trade goods, they have to declare the origin of their imports or the destination of their exports in their own government’s trade data. For clarity, they can use a universal two-letter coding system to refer to a particular country. The list is maintained by the International Organization for Standardization (ISO) in Switzerland and is also commonly used for internet domain names and banking. “Using codes saves time and avoids errors as instead of using a country’s name (which will change depending on the language being used), we can use a combination of letters and/or numbers that are understood all over the world,” the ISO says on its website. In theory, those codes would come in handy when distinguishing between, say, the Democratic People’s Republic of Korea (North Korea) and the Republic of Korea (South Korea). But not, it seems, when their codes are so similar too: South Korea’s is KR, and North Korea’s is KP. According to the UN report, Germany — which chairs the UN committee that published the report — listed two banned industrial machinery items, worth more than 13,000 euros, as exports to North Korea. They were questioned by the UN. Their response, essentially: sorry, wrong Korea. North Korea, they said, was “erroneously reported declared to be the destination while the destination was, in fact, the Republic of Korea.” During 2018 and 2019, Kazakhstan reported iron, textile, machinery, and electrical equipment imports from the DPRK — all banned — worth $798,000. But the UN report said that Kazakhstan identified “gross errors in the filing of customs declarations of 28 goods,” because 28 declarants had “mistakenly indicated KP (DPRK) as instead of the code KR (Republic of Korea).” “After detecting these technical errors in the system, the Kazakh authorities immediately undertook the necessary measures to rectify the codes,” the report said. “All accompanying documents, as well as certificates proving the origin of the goods, confirm that the actual import of the rechecked goods was from the Republic of Korea, not the DPRK.” Spain, meanwhile, listed banned imports of electrical equipment from North Korea worth $34,000 in its customs data. According to the report, Spain told the UN that “the economic actor responsible for this transaction acknowledged that an error had been made […] and has provided documents confirming the correct origin of the merchandise […] listing the Republic of Korea, designated by the code KR, as the origin of the goods.” The UK listed banned imports of machinery and electrical equipment from the DPRK, worth $324,000, during 2018 and 2019. “These were actually shipments from [the ROK], but […] it was mistakenly given the wrong code,” the UK told the UN, according to the report. “It further confirmed that both shipments were inspected by its customs service and were confirmed to be legal imports,” the report continued. Brazil’s public customs data included nearly $1.5 million worth of illicit trade with North Korea during 2018 and 2019, according to the report. That included banned imports of North Korean iron, electrical equipment, and machinery, and banned exports of metals. According to the report, when Brazil was questioned about the trade, it replied that the information was “incorrect.” “None of the trade operations in question originated from or were destined to the DPRK,” Brazil insisted, according to the report. “Such inaccuracies are due to errors committed by customs brokering agents while inserting data in the declarations of import or export submitted through SISCOMEX (Integrated Foreign Trade System).” It is unclear if the intended destination was South Korea or somewhere else. Despite the apparent confusion between KP and KR, it is also unclear if the International Organization for Standardization (ISO) would actually move to change the country codes for the two Koreas. A spokesperson for the organization told NK News that it “should strive to maintain the stability of the list of codes.” Instead, companies and customs agencies may just want to be more careful. “Every user in the world can visit this site, and make sure that they are using the correct code,” they said. The UN report covered trade data from April 2018 to September 2019. In the months since, however, NK News found that at least one more country may have mixed up the two Koreas with the same potentially costly typo: Canada. According to two different UN trade databases, which collect data from different countries’ customs agencies around the world, Canada exported more than $1.2 million worth of flight simulator equipment to North Korea in late 2019 (and more than $19 million worth to South Korea). Canada’s trade commissioner has celebrated the country’s flight simulator exports around the world. When this NK News reporter asked the Canadian government if they had, in fact, shipped a million dollars’ worth of flight simulator equipment to the DPRK last year, the answer was a firm no. So where did those numbers come from? “Our senior analysts have looked into this further and there was initially a reporting error with the country, and it has since been corrected and the published data was revised,” a spokesperson from Statistics Canada, which oversees the country’s trade data, told NK News. “There may be a timing delay with updating the data on the UN site,” they added. Asked if a different two-letter code might have helped, the spokesperson politely declined to comment. Edited by Oliver Hotham Earlier this month, the UN Security Council (UNSC) released an annual report documenting North Korea's efforts to keep millions of dollars flowing into the country despite punishing global sanctions -- and, in the process, the lengths Pyongyang and its trading partners have gone to cover their tracks. But one section of the 267-page report showed something rather atypical for the normally murky world of sanctions violations: instead of hiding what they were doing, multiple countries named in the report openly declared, in their public customs data, that they had violated UN resolutions and traded illicit goods with the DPRK. Become a member for less than $4 per week.
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Jacob Fromer is NK News's Washington DC correspondent. He previously worked in the U.S. Senate.
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