The Korea Customs Service’s (KCS) admission that South Korean companies were importing smuggled North Korean coal and pig iron by sea made global headlines last week, even as recent history shows the country’s authorities turning an apparent blind eye to the kinds of loopholes in which the DPRK thrives.

The case highlights how North Korea’s well-honed sanctions evasion mechanisms remain one step ahead of Seoul’s regulatory agencies, whose interest in enforcing maritime sanctions often appears on a par with Beijing’s.

NK Pro and sister site NK News have been reporting on the curious appearance of ships with direct links to the DPRK in the South’s ports since 2014.

But even with the ongoing investigations, there is little evidence that Seoul is paying closer attention to the vessels moored in its ports, and suspicious ships continue to turn up in its territorial waters on a weekly basis.

Take the Geng Hai, which the NK Pro ship tracker shows arrived from China in South Korea’s Ulsan Port on Monday.

A cursory glance at the vessel’s previous ownership would be enough to raise the eyebrows of most North Korea watchers.

Up until mid-2017, the then-Cambodian-flagged ship was owned by Green Pine Shipping Management and managed by a separately addressed company called Green Pine Shipping.

Sharing a name with the DPRK’s primary arms dealer is the type of red flag that may have warranted further investigation as the vessel sailed around Japan and South Korea, though it does not seem it met the threshold for further scrutiny.

But if the company’s naming scheme could be an unfortunate coincidence, further analysis shows how one of the above Green Pines is located in the same building as the UN Panel of Expert (PoE) flagged Dalian Daxin Electronics, a company set up by Daedong Credit Bank operative Kim Chol Sam.

According to the UN, Kim is suspected to have “facilitated transactions worth hundreds of thousands of dollars and likely managed millions of dollars in DPRK related accounts with potential links to nuclear/missile programs,” while the bank he worked is also sanctioned on November 30, 2016.

While not direct evidence of North Korean malfeasance, the DPRK uses such techniques to put several layers of separation between itself and vessels like the Geng Hai, granting them access to ports and markets North Korea would normally be prohibited from.

Yet when contacted about suspicious or even U.S. sanctioned vessels in South Korean ports, local authorities and government agencies often seem unclear where the buck starts and stops.

The Ministry of Unification refers questions to the Ministry of Oceans and Fisheries and vice-versa, while local port authorities seem in dark on enforcement or point to nebulous agencies further up the chain and become unwilling to go on record.

Seoul has insisted it will investigate all cases of sanctions non-compliance | Photo: Blue House

The confusion seems to reign even in relatively clear-cut cases that do not require in-depth research or investigation: a recent NK Pro article highlighted how vessels owned by the U.S. sanctioned Liberty Shipping continued (and do so to this day) to call in on South Korean ports.

While U.S. sanctions do not entail port bans, South Korean companies, individuals and their representative banks could be transacting with an entity designated by the Office of Foreign Assets Control (OFAC), despite a strongly worded advisory issued by the U.S. Coast Guard and Treasury Department in February warning against the practice.

“OFAC investigates apparent violations of its regulations and maintains enforcement authority as outlined in its Economic Sanctions Enforcement Guidelines,” the notice reads.

“Persons that violate U.S. sanctions with respect to North Korea can be subject to civil monetary penalties equal to the greater of twice the value of the underlying transaction or $289,238, per each violation.”

Yet when contacted by NK Pro, the South Korean authorities did not seem to think the vessels’ recurring visits to the South’s ports were a problem.

Seoul’s Ministry of Oceans and Fisheries told NK Pro at the time that maritime sanctions were not within their remit, while local port authorities at two regular stop-offs for Liberty’s vessels did not appear to know who was responsible for sanctions implementation or enforcement.

A representative from Ulsan’s Port Authority told NK Pro in 2017 that vessels were screened before entry and compared to a blacklist on a database, though it was not clear who created or maintained it.

Given that ships sanctioned by OFAC have called on South Korea before, the U.S. Treasury Department’s measures alone do not seem to be enough to provoke further scrutiny or port bans.

More recently, two more NK Pro articles highlighted how South Korea also appeared disinterested in North Korea-linked ships whose owners are sanctioned by the UN Security Council.

While the vessels themselves are not blacklisted, the visits may come under the remit of Resolution 2270 passed in 2016, which requires member states to prohibit ships from entering their ports if they are linked to a sanctioned entity.

“Member States shall prohibit the entry into their ports of any vessel if the Member State has information that provides reasonable grounds to believe the vessel is owned or controlled, directly or indirectly, by a designated individual or entity,” paragraph 22 reads.

The ship’s owner – Hauxin Shipping – was sanctioned by the UN for its role in coal smuggling, highlighting how even when under the international spotlight, South Korea still appears to be lagging behind its northern neighbor.

Edited by Oliver Hotham

Featured image: Laurie Nevay