The number of North Korean vessels using flags from other countries has reduced sharply following two rounds of sanctions last year, even as the DPRK increasingly turns to illegal methods to hide the origins of its vessels, a leaked UN Panel of Experts (PoE) report outlines.

UN Resolutions passed last year looked to stamp out the DPRK’s long running use of flags of convenience (FOCs), a practice involving registering a ship in a foreign jurisdiction and generally used to skirt labor or environmental regulations.

While the technique is not illegal, North Korea often uses foreign flags to occlude its links to certain ships and their activities.

The ships are usually owned and managed by accompanying and complicated networks of paper companies in Hong Kong, while some of North’s trusted foreign sanctions evaders may also work for shipping registries, helping the DPRK procure flags and documentation.

UN Resolution 2321, passed last year, took some of the strongest steps yet in limiting the North’s ability to use other shipping registries.

“All Member States shall de-register any vessel that is owned, controlled, or operated by the DPRK, and further decides that Member States shall not register any such vessel that has been de-registered by another Member State,” paragraph 24 or Resolution 2321 reads.

The wording is a step up from that contained in the previous resolution issued in March that same year, which only called upon member states to deregister ships, a nonbinding clause violations of which would not constitute sanctions breaches.

But the mid-year PoE report indicates the two resolutions had noticeable effects on the number of ships using DPRK flags, with some foreign registries taking steps to delist the North Korean vessels in their ranks.

“A number of Member States have taken action to de-register foreign-flagged, DPRK-controlled vessels on the basis of the resolutions,” the PoE report reads.

“(While) the number of foreign-flagged DPRK vessels has been dramatically reduced there has been a corresponding increase in the number of vessels registered under the DPRK flag.”

Many of these changes likely stem from previously notorious registries like Cambodia and Mongolia taking a firmer stance on North Korean shipping.

The Cambodian registry – a long running haven for all manner of suspicious vessels – announced last year it would no longer sell registration services to foreign ships, while the NK Pro ship tracker currently shows no Mongolian-flagged ships.

Previous NK Pro reports also indicated the number of vessels using the Tanzanian flag also seemed to be waning, after it apparently became the FOC of choice for North Korea-linked ships during 2016.

The UN PoE’s report notes that many of the ships have also been transferred to the DPRK’s “domestic” fleet, ferrying between ports on the DPRK’s eastern and western coasts.

The report calls this arrangement “unusual,” as it means some of the DPRK’s less reputable vessels have to sail through international waters.

Source: NK Pro vessel tracker | Click to enlarge.

OUT OF THE FRYING PAN, INTO THE WATER

But, as the Panel notes, some of the changes have come with accompanying sanctions breaches of their own.

While some vessels were transferred to North Korea’s registry along with new DPRK ownership and management companies in Pyongyang, others are still owned and managed by companies in Hong Kong or mainland China.

“All States shall prohibit their nationals, persons subject to their jurisdiction and entities incorporated in their territory or subject to their jurisdiction from registering vessels in the DPRK,” paragraph 20 of Resolution 2270 reads.

Ships like the formerly Cambodian-flagged Dolphin 26 – a relatively frequent visitor to North Korea – changed to the DPRK’s registry this year. But despite its new flag, it still seems to be owned by Union Link International HK, a Hong Kong based company which also manages the vessel.

“In violation of paragraph 20 (of Resolution 2270), 13 (vessels) were registered with foreign ownership and/or operators and 17 were transferred from foreign companies,” the PoE report reads.

The Dolphin 26’s flags and ownership | Source: Equasis

While open shipping registries and foreign flags can be magnets for unscrupulous ship owners, their use is not prohibited.

But in the face of a stricter sanctions environment, the DPRK could be turning to illegal practices and fake documentation to keep some of its less reputable vessels in the waters.

In January this year, an NK Pro report indicated some DPRK-linked ships were sailing with Fijian flags, though the country’s maritime authority denied the reports and said the vessels were using falsified documentation.

“At least 10 (vessels) falsely reported the Fijian flag indicating evasion, which Fijian authorities are investigating,” the PoE report reads.

“At least four other vessels under the Cambodian flag attempted to register under another foreign flag but reverted to the DPRK following ‘registration disputes’ relating to falsified documentation.”

The DPRK’s use of fake documentation does not end there, the PoE report adds, reporting that the country’s Maritime Administration Bureau (MAB) is falsifying the documents of sanctioned vessels so they can continue sailing abroad.

The U.S. and UN have both blacklisted numerous DPRK vessels formerly owned by a North Korean weapons smuggler called Ocean Maritime Management (OMM).

Since their designations, tracking systems indicate the ships are generally seeing little use, only occasionally appearing near the North Korean coast.

But according to the PoE, the MAB issued false certificates for the some of the vessels, giving them new names and Maritime Mobile Service Identity (MMSI) numbers.

The DPRK’s maritime bureau has also removed the ship’s International Maritime Organization numbers (IMO), a unique and obligatory identifier which is not supposed to change throughout the life of a vessel.

“This renaming and reregistration of OMM-controlled vessels was also an attempt to evade sanctions, including the DPRK companies newly registered for this purpose,” the PoE report says, before also calling for MAB to be sanctioned by the UN Security Council (UNSC).

The practice may have worked in the short term, though its success seems far from assured. One OMM-linked vessel was renamed to the Song Phyong 7 and sailed to Russia without broadcasting its IMO number – a violation of shipping regulations.

The Panel of Experts report indicates the vessel was inspected and detained by a member state, though according to vessel tracking site Marine Traffic, the ship was last seen heading towards the DPRK coast in May this year.

Edited by Oliver Hotham