Tag Archives: U.N. Sanctions

Exclusive-World Bank works to redirect frozen funds to Afghanistan for humanitarian aid only: sources

By Jonathan Landay and Andrea Shalal

WASHINGTON (Reuters) – The World Bank is finalizing a proposal to deliver up to $500 million from a frozen Afghanistan aid fund to humanitarian agencies, people familiar with the plans told Reuters, but it leaves out tens of thousands of public sector workers and remains complicated by U.S. sanctions.

Board members will meet informally on Tuesday to discuss the proposal, hammered out in recent weeks with U.S. and U.N. officials, to redirect the funds from the Afghanistan Reconstruction Trust Fund (ARTF), which has a total of $1.5 billion.

Afghanistan’s 39 million people face a cratering economy, a winter of food shortages and growing poverty three months after the Taliban seized power as the last U.S. troops withdrew from 20 years of war.

Afghan experts said the aid will help, but big gaps remain, including how to get the funds into Afghanistan without exposing the financial institutions involved to U.S. sanctions, and the lack of focus on state workers, the sources said.

The money will go mainly to addressing urgent health care needs in Afghanistan, where less than 7% of the population has been vaccinated against the coronavirus, they said.

For now, it will not cover salaries for teachers and other government workers, a policy that the experts say could hasten the collapse of Afghanistan’s public education, healthcare and social services systems. They warn that hundreds of thousands of workers, who have been unpaid for months, could stop showing up for their jobs and join a massive exodus from the country.

The World Bank will have no oversight of the funds once transferred into Afghanistan, said one of the sources familiar with the plans.

“The proposal calls for the World Bank to transfer the money to the U.N. and other humanitarian agencies, without any oversight or reporting, but it says nothing about the financial sector, or how the money will get into the country,” the source said, calling U.S. sanctions a major constraint.

‘NOT A SILVER BULLET’

While the U.S. Treasury has provided “comfort letters” assuring banks that they can process humanitarian transactions, concern about sanctions continues to prevent passage of even basic supplies, including food and medicine, the source added.

“It’s a scorched earth approach. We’re driving the country into the dust,” said the source. Crippling sanctions and failure to take care of public sector workers will “create more refugees, more desperation and more extremism.”

Any decision to redirect ARTF money requires the approval of all its donors, of which the United States has been the largest.

A State Department spokesperson confirmed that Washington is working with the World Bank and other donors on how to use the funds, including potentially paying those who work in “critical positions such as healthcare workers and teachers.”

The spokesperson said the U.S. government remains committed to meeting the  critical needs of the  Afghan people, “especially across health, nutrition, education, and food security sectors … but international aid is not a silver bullet.”

BYPASSING TALIBAN

Established in 2002 and administered by the World Bank, the ARTF was the largest financing source for Afghanistan’s civilian budget, which was more than 70% funded by foreign aid.

The World Bank suspended disbursements after the Taliban takeover. At the same time, Washington stopping supplying U.S. dollars to the country and joined in freezing some $9 billion in Afghan central bank assets and halting financial assistance.

A World Bank spokesperson confirmed that staff and executive board members are exploring redirecting ARTF funds to U.N. agencies “to support humanitarian efforts,” but gave no further details. The United Nations declined to comment.

Initial work has also been done on a potential swap of U.S. dollars for Afghanis to deliver the funds into the country, but those plans are “basically just a few PowerPoint slides at this point,” one of the sources said. That approach would deposit ARTF funds in the international accounts of Afghan private institutions, who would disburse Afghanis from their Afghan bank accounts to humanitarian groups in Afghanistan, two sources said.

This would bypass the Taliban, thereby avoiding entanglement with the U.S. and U.N. sanctions, but the plan is complex and untested, and could take time to implement.

One major problem is the lack of a mechanism to monitor disbursements of funds in Afghanistan to ensure Taliban leaders and fighters do not access them, a third source said.

Two former U.S. officials familiar with internal administration deliberations said that some U.S. officials contend that U.S. and U.N. sanctions on Taliban leaders bar financial aid to anyone affiliated with their government.

(Reporting by Jonathan Landay and Andrea Shalal; Additional reporting by Arshad Mohammed and Michelle Nichols; editing by Grant McCool)

As Kim arrives in Singapore, no North Korean comrades in sight

FILE PHOTO: A view of the entrance of the North Korean embassy in Singapore May 24, 2018. Picture taken May 24, 2018. REUTERS/Edgar Su/File Photo

By John Geddie and Fathin Ungku

SINGAPORE (Reuters) – Stella Choi, the principal of a Korean language school in a drab tower in downtown Singapore, works just across the elevator lobby from the modest suites that make up North Korea’s embassy.

Yet the South Korean national, who runs the iSpeak Korean Language Centre, says she has neither seen nor spoken to any of her Northern neighbors or people entering the embassy since they moved in two years ago.

Choi’s experience is consistent with the extremely low profile Singapore’s small community of North Koreans has kept in recent years as diplomatic pressure on their home country made traveling and working abroad increasingly difficult.

But they have disappeared in recent years as U.N. sanctions tightened around Pyongyang, and Singapore has been among the countries that have dutifully implemented resolutions to cut trade ties, ban transactions with North Korean banks and cancel the work passes of its citizens.

North Korea’s place in the world – and that of its diaspora – comes into focus in Singapore next week, when the city-state hosts the first ever summit between a sitting U.S. president and a North Korean leader. Donald Trump and Kim Jong Un will discuss ending the North’s nuclear weapons and missile programs in return for diplomatic and economic incentives.

Singapore, a global trading and financial hub, was once home to a close-knit group of a few dozen North Korean diplomats and businessmen responsible for channelling money, fuel and goods to the secretive state.

While it still maintains diplomatic ties, North Korea’s embassy has moved from a three-storey property in a lively neighborhood of heritage shop-houses to its present unassuming home.

“I hope to see them one day. Since the North and South Korean relationship is getting better, I may even be able to speak to them,” said Choi.

Reuters has visited the North Korean embassy multiple times over the last year but on all but one occasion there appeared to be nobody there. Reuters did once meet the embassy’s first secretary, Ri Pyong Dok, while he was entering the embassy in February 2017, but he declined comment.

In a call in recent weeks to the embassy to ask about preparations for the summit, a North Korean staffer also declined comment.

The Singapore foreign ministry has four North Korean officials and their spouses in its list of diplomatic and consular staff as of June 2018.

STRATEGICALLY MANAGED

“The sanctions and the pressure that was put on by the U.S. and its allies were definitely … key motivating forces that encouraged him (Kim Jong Un) to consider engaging more, and to come out and have this summit,” said Nicholas Fang, director of security and global affairs at the Singapore Institute of International Affairs.

North Korea has always strategically managed its expatriate population, mainly sending them to allies like China and Russia, where they feel they will not be corrupted by Western ideals.

Singapore is probably the most diplomatically neutral place where they’ve based people historically – more for trade reasons than diplomacy, said John Kim, a Korean-American businessman who advises a non-profit offering training in entrepreneurship and business in North Korea.

Kim said he had not spoken to a North Korean in Singapore in around five years. The last person John Kim spoke to told him there were around 50 North Koreans operating in the city-state, mainly in industries like shipping, although there are no official figures of the size of the community.

In contrast, there are about 20,000 South Koreans living in Singapore.

In November, Singapore suspended all trade with North Korea to comply with tightening U.N. regulations.

In March, Singapore said it had revoked the work permits of all remaining North Koreans in the country.

A long-time South Korean resident of Singapore who did not want to be named said until a few years ago, groups of North Koreans would come into South Korean-run restaurants for barbecue dinners and would sometimes strike up casual conversations with the South Korean patrons or staff.

They would be relaxed and friendly, though there was occasionally tension in the banter, reflecting the rivalry between the two states, he said.

One more prominent North Korean figure in Singapore was Kim Jong Nam, the half brother of the current leader who was assassinated at Kuala Lumpur airport last year.

A socialite, he often drank at a plush bar on the top of the iconic Marina Bay Sands hotel or in one of the city-state’s many karaoke joints, according to one of his friends, who declined to be named, citing safety reasons.

The friend said Kim Jong Nam was down-to-earth, self-deprecating and open to jokes about his family connections.

“We would always ask, ‘So Kim, what do you think about communism?’ and he’s was always saying, ‘I’m all about peace and love.”

(Reporting by John Geddie, Fathin Ungku and Jack Kim; Editing by Sam Holmes and Raju Gopalakrishnan)

Ending North Korea oil supplies would be seen as act of war, says Russia

North Korean leader Kim Jong Un gives field guidance at the Pyongyang Pharmaceutical Factory, in this undated photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang January 25, 2018.

MOSCOW (Reuters) – The delivery of oil and oil products to North Korea should not be reduced, Moscow’s ambassador to Pyongyang was cited as saying by RIA news agency on Wednesday, adding that a total end to deliveries would be interpreted by North Korea as an act of war.

The U.N. and United States have introduced a wave of sanctions aimed at curbing North Korea’s development of nuclear weapons, including by seeking to reduce its access to crude oil and refined petroleum products.

“We can’t lower deliveries any further,” Russia’s envoy to Pyongyang, Alexander Matzegora, was quoted by RIA as saying in an interview.

Quotas set by the U.N. allow for around 540,000 tonnes of crude oil a year to be delivered to North Korea from China, and over 60,000 tonnes of oil products from Russia, China and other countries, he was quoted as saying.

“[This] is a drop in the ocean for a country of 25 million people,” Matzegora said.

Shortages would lead to serious humanitarian problems, he said, adding: “Official representatives of Pyongyang have made it clear that a blockade would be interpreted by North Korea as a declaration of war, with all the subsequent consequences.”

Last week, the United States imposed further sanctions on North Korea, including on its crude oil ministry.

In his first annual State of the Union speech to the U.S. Congress on Tuesday, President Donald Trump vowed to keep up the pressure on North Korea it from developing missiles which could threaten the United States.

North Korea on Saturday condemned the latest U.S. sanctions. and Russian deputy foreign minister Igor Morgulov said Russia had no obligation to carry out sanctions produced by the U.S.

The ambassador also denied charges by Washington that Moscow, in contravention of U.N. sanctions, was allowing Pyongyang to use Russian ports for transporting coal.

“We double-checked [U.S.] evidence. We found that the ships mentioned did not enter our ports, or if they did, then they were carrying cargo that had nothing to do with North Korea,” he is cited as saying.

Reuters reported earlier that North Korea had shipped coal to Russia last year which was then delivered to South Korea and Japan in a likely violation of U.N. sanctions.

(Reporting by Jack Stubbs; Writing by Polina Ivanova; Editing by Richard Balmforth)

Japan tells U.N. of North Korean tanker suspected of sanctions busting

The North Korean-flagged tanker "Rye Song Gang 1" is pictured on the East China sea in this photo taken on January 20, 2018 and released by Japan's Ministry of Defense. Defense Ministry of Japan/Handout via REUTERS

TOKYO (Reuters) – Japan has told the United Nations about a North Korean tanker spotted in the East China Sea that it suspects was engaged in a transfer of goods with another tanker in defiance of U.N. sanctions, the Foreign Ministry said on Wednesday.

North Korea’s development of nuclear weapons and missiles capable of hitting the United States has spurred deepening U.N. Security Council sanctions and stoked fears of a military conflict.

According to a statement issued by the Foreign Ministry, the North Korean-flagged tanker “Rye Song Gang 1” – blacklisted by the United Nations last month for carrying banned cargo – was spotted by a Japanese Maritime Self Defence Force patrol plane with the Dominican-flagged tanker “Yuk Tung” tied up beside it in the East China Sea on Saturday.

The two boats were lit up and some kind of activity was taking place, the Foreign Ministry said, adding that the Japanese government strongly suspected them of transferring goods in violation of the U.N. sanctions.

It did not specify what goods it suspected were being transferred. The U.N. Security Council in December unanimously imposed new sanctions on North Korea for a recent intercontinental ballistic missile test, seeking to further limit its access to refined petroleum products and crude oil.

The ministry also said it appeared that the North Korean-flagged vessel, one of four additional vessels recently denied international port access by the United Nations for breaching sanctions, had disguised its name so that it read “Song Hae.”

“We have reported this to the U.N. and also given this information to other nations involved, including those connected to the Dominican tanker, expressing our concern,” the ministry added.

Diplomats from Dominica, a tiny Carribean island which suffered widespread damage in a hurricane in September, were not immediately available for comment.

North Korea is developing missile and nuclear technology in defiance of international condemnation amid regular threats to destroy the United States, Japan and South Korea.

But tensions have eased with North Korea agreeing to take part in the Winter Olympics in the South next month.

(Reporting by Elaine Lies and Kiyoshi Takenaka; Editing by Nick Macfie)

Tillerson: Evidence sanctions ‘really starting to hurt’ North Korea

U.S. Secretary of State Rex Tillerson speaks at a news conference during the Foreign Ministers’ Meeting on Security and Stability on the Korean Peninsula in Vancouver, British Columbia, Canada, January 16, 2018.

By David Brunnstrom

ABOARD U.S. GOVERNMENT AIRCRAFT (Reuters) – U.S. Secretary of State Rex Tillerson said on Wednesday the United States is getting evidence that international sanctions are “really starting to hurt” North Korea, even as he accused Russia of not implementing all of the measures.

U.S. President Donald Trump told Reuters in an interview earlier on Wednesday that Russia was helping North Korea evade international sanctions and that Pyongyang was getting closer every day to being able to deliver a long-range missile to the United States.

Tillerson told reporters the Russian failure to comply with the U.N. measures “primarily” concerned fuel “but some other areas potentially as well.” He did not provide details.

Nevertheless, Tillerson said he was confident the pressure would eventually bring North Korea to the negotiating table over its nuclear and missile programs. Pyongyang has carried out nuclear and missiles tests in defiance of U.N. and other sanctions.

“We are getting a lot of evidence that these sanctions are really starting to hurt,” Tillerson said, citing intelligence and anecdotal evidence from defectors.

He said Japan told a conference on North Korea in Vancouver on Tuesday that more than 100 North Korean fishing boats had drifted into its waters and two-thirds of those aboard them had died.

“What they learned is that they are being sent out in the winter time because there’s food shortages and they are being sent out to fish with inadequate fuel to get back,” he said.

South Korean President Moon Jae-in had attributed North Korea’s recent willingness to talk to South Korea to the pain of sanctions, Tillerson told an event at Stanford University in California.

But he later said he suspected Russia may not only be failing to implement some sanctions but “frustrating” some of the effort to press the North.

“It’s apparent to us that they’re not implementing all the sanctions and there’s some evidence they may be frustrating some of the sanctions,” Tillerson said aboard his aircraft while returning from Vancouver.

CHINESE PRESSURE

China did not attend the Vancouver meeting, where 20 nations agreed to step up sanctions pressure on the North, but Tillerson highlighted Beijing’s role.

“We have never had Chinese support for sanctions like we’re getting now,” he said. “Russia’s a slightly different issue, but the Chinese have leaned in hard on the North Koreans.”

Asked whether there was a humanitarian concern that sanctions were hurting ordinary North Koreans, he said: “That’s a choice the regime’s making. The regime gets to decide how they allocate their available resources.”

“We are not going to take any responsibility for the fact that he (North Korean leader Kim Jong Un) is choosing to make his own people suffer,” Tillerson said.

Asked if he was concerned that South Korea might resume some humanitarian aid to North Korea as part of the resumption of North-South talks this month, thereby weakening sanctions, Tillerson said: “Countries will have to make their own choice, but we would be very skeptical that aid that goes into the country will necessarily relieve the suffering of the people.”

Tillerson said that, while North Korea had a record of seeking to drive a wedge between the United States and its allies through “charm offensives,” Washington was supportive of the North-South dialogue.

Tillerson said of North Korean leader Kim Jong Un: “He knows how to reach me, if he wants to talk. But he’s got to tell me he wants to talk. We’re not going to chase him.”

He said he was confident the sides would eventually get to the negotiating table and he wanted North Korea to know that, when that happened, the United States had “very, very strong military options standing behind me.”

The Trump administration has said repeatedly that all options are available, including military ones, in forcing North Korea to give up its development of nuclear missiles capable of reaching the United States, although it prefers a diplomatic solution.

(Reporting by David Brunnstrom; Editing by Grant McCool and Robert Birsel)

Russian tankers fueled North Korea via transfers at sea

A North Korean flag flies on a mast at the Permanent Mission of North Korea in Geneva October 2, 2014.

By Guy Faulconbridge, Jonathan Saul and Polina Nikolskaya

LONDON/MOSCOW (Reuters) – Russian tankers have supplied fuel to North Korea on at least three occasions in recent months by transferring cargoes at sea, according to two senior Western European security sources, providing an economic lifeline to the secretive Communist state.

The sales of oil or oil products from Russia, the world’s second biggest oil exporter and a veto-wielding member of the United Nations Security Council, breach U.N. sanctions, the security sources said.

The transfers in October and November indicate that smuggling from Russia to North Korea has evolved to loading cargoes at sea since Reuters reported in September that North Korean ships were sailing directly from Russia to their homeland.

“The Russian vessels made transfers at sea to the North Koreans,” the first security source, who spoke on condition of anonymity, told Reuters. The source said the transfers of oil or oil products took place on several occasions and were a breach of sanctions.

A second source, who independently confirmed the existence of the Russian ship-to-ship fuel trade with North Korea, said there was no evidence of Russian state involvement in the latest transfers.

“There is no evidence that this is backed by the Russian state but these Russian vessels are giving a lifeline to the North Koreans,” the second European security source said.

In comments carried by Russia’s RIA Novosti state news agency on Saturday, the Russian Foreign Ministry said the country was observing sanctions against North Korea.

The two security sources cited naval intelligence and satellite imagery of the vessels operating out of Russian Far Eastern ports on the Pacific but declined to disclose further details to Reuters, saying it was classified.

The Russian Customs Service declined to comment when asked on Wednesday if Russian ships had supplied fuel to North Korean vessels. The owner of one ship accused of smuggling oil to North Korea denied any such activity.

SATELLITE DATA

The U.S. State Department, in a statement, called on Russia and other U.N. members to “strictly implement” sanctions on North Korea and to work “more closely together to shut down U.N.-prohibited activities, including ship-to-ship transfers of refined petroleum and the transport of coal from North Korea”.

The latest report came as China, responding on Friday to criticism from U.S. President Donald Trump, denied it had illicitly shipped oil products to North Korea.

North Korea relies on imported fuel to keep its struggling economy functioning. It also requires oil for its intercontinental ballistic missile and nuclear program that the United States says threatens the peace in Asia.

“The vessels are smuggling Russian fuel from Russian Far Eastern ports to North Korea,” said the first security source, who spoke on condition of anonymity.

Reuters was unable to independently verify that the vessels had transferred fuel to North Korean vessels, whether the Russian state knew about the sales or how many Russian vessels were involved in the transfers. It was also unclear how much fuel may have been smuggled.

Ship satellite positioning data consulted by Reuters and available on Reuters Eikon shows unusual movements by some of the Russian vessels named by the security sources including switching off the transponders which give a precise location.

The security sources said the Russian-flagged tanker Vityaz was one vessel that had transferred fuel to North Korean vessels.

The Vityaz left the port of Slavyanka near Vladivostok in Russia on Oct. 15 with 1,600 tonnes of oil, according to Russian port control documents.

Documents submitted by the vessel’s agent to the Russian State Port Control authority showed its destination as a fishing fleet in the Japan Sea. Shipping data showed the vessel switched off its transponder for a few days as it sailed into open waters.

According to the European security sources, the Vityaz conducted a ship-to-ship transfer with the North Korean Flagged Sam Ma 2 tanker in open seas during October.

Reuters could not independently verify the transfer as ship tracking data showed that the Sam Ma 2 had turned off its transponder from the start of August.

The owner of the Russian vessel denied any contact with North Korean vessels but also said it was unaware that the vessel was fuelling fishing boats.

OIL PRODUCTS

Yaroslav Guk, deputy director of the tanker’s owner, Vladivostok-based Alisa Ltd, said the vessel had no contacts with North Korean vessels.

“Absolutely no, this is very dangerous,” Guk told Reuters by telephone. “It would be complete madness.”

When contacted a second time, Guk said the vessel did not have any contacts with North Korean ships and that he would not answer further questions.

An official at East Coast Ltd, the vessel’s transport agent, declined to comment.

Two other Russian flagged tankers made similar journeys between the middle of October and November, leaving from the ports of Slavyanka and Nakhodka into open seas where they switched off their transponders, shipping data showed.

In September, Reuters reported that at least eight North Korean ships that left Russia loaded with fuel this year headed for their homeland despite declaring other destinations, a ploy that U.S. officials say is often used to undermine sanctions.

A Russian shipping source with knowledge of Far Eastern marine practices said North Korean vessels had stopped loading fuel in Russia’s Far Eastern ports but that fuel is delivered at sea by tankers using ship-to-ship transfers, or even by fishing vessels.

China on Friday denied reports it had been illicitly selling oil products to North Korea in violation of U.N. sanctions, after U.S. President Donald Trump said he was unhappy that China had allowed oil to reach the isolated nation.

China’s denial came a day after it blocked a U.S. effort at the United Nations to blacklist six ships Washington believes had engaged in illicit trade with North Korea, a U.N. Security Council diplomat said.

According to documents seen by Reuters this month, the United States had proposed that the U.N. Security Council blacklist 10 ships for illicit trade with North Korea.

It accused the vessels of “conducting illegal ship-to-ship transfers of refined petroleum products to North Korean vessels or illegally transporting North Korean coal to other countries for exports.”

Three North Korean ships among the 10 were blacklisted, along with a Panama-registered vessel.

(Additional reporting by David Brunnstrom in Washington, and Gabrielle Tetrault-Farber in Moscow; Editing by Giles Elgood, Leslie Adler and Alison Williams)

After Trump criticism, China denies selling oil illicitly to North Korea

: A Chinese flag is seen in front of the Friendship bridge over the Yalu River connecting the North Korean town of Sinuiju and Dandong in China's Liaoning Province on April 1, 2017.

By Philip Wen and David Brunnstrom

BEIJING/WASHINGTON (Reuters) – China on Friday denied reports it has been illicitly selling oil products to North Korea after U.S. President Donald Trump said he was not happy that China had allowed oil to reach the isolated nation.

Trump said on Twitter the previous day that China had been “caught” allowing oil into North Korea and that would prevent “a friendly solution” to the crisis over North Korea’s nuclear and missile programs that it conducts in defiance of heavy U.N. Security Council sanctions.

“I have been soft on China because the only thing more important to me than trade is war,” Trump said in a separate interview with The New York Times.

South Korea’s Chosun Ilbo newspaper this week quoted South Korean government sources as saying that U.S. spy satellites had detected Chinese ships transferring oil to North Korean vessels about 30 times since October.

U.S. officials have not confirmed details of this report.

Chinese Foreign Ministry spokeswoman Hua Chunying told reporters she had noted recent media reports including suggestions a Chinese vessel was suspected of transporting oil to a North Korean vessel on Oct. 19.

“The Chinese side has conducted immediate investigation. In reality, the ship in question has, since August, not docked at a Chinese port and there is no record of it entering or leaving a Chinese port,” Hua said.

She said she was not aware if the vessel had docked at the port in other countries but the relevant media reports “did not accord with facts”.

“China has always implemented U.N. Security Council resolutions pertaining to North Korea in their entirety and fulfils its international obligations. We never allow Chinese companies and citizens to violate the resolutions,” Hua said.

“If, through investigation, it’s confirmed there are violations of the U.N. Security Council resolutions, China will deal with them seriously in accordance with laws and regulations.”

In the New York Times interview, Trump explicitly tied his administration’s trade policy with China, North Korea’s lone major ally, to its perceived cooperation in resolving the North Korea standoff.

“When I campaigned, I was very tough on China in terms of trade. They made — last year, we had a trade deficit with China of $350 billion, minimum. That doesn’t include the theft of intellectual property, O.K., which is another $300 billion,” Trump said, according to a transcript of the interview.

“If they’re helping me with North Korea, I can look at trade a little bit differently, at least for a period of time. And that’s what I’ve been doing. But when oil is going in, I’m not happy about that.”

An official with the U.S. State Department said the U.S. government was aware of vessels engaged in such activity involving refined petroleum and coal.

“We have evidence that some of the vessels engaged in these activities are owned by companies in several countries, including China,” the official said, speaking on condition of anonymity.

The United States says the full cooperation of China, North Korea’s neighbor and main trading partner, is vital to the success of efforts to rein in North Korea, while warning that all options are on the table, including military ones, in dealing with it.

China has repeatedly said it is fully enforcing all resolutions against North Korea, despite suspicion in Washington, Seoul and Tokyo that loopholes still exist.

‘EVADING SANCTIONS’

South Korea said on Friday it had seized a Hong Kong-flagged ship suspected of transferring oil to North Korea.

A senior South Korean foreign ministry official said the ship, the Lighthouse Winmore, was seized when it arrived at a South Korean port in late November.

“It’s unclear how much oil the ship had transferred to North Korea for how long and on how many occasions, but it clearly showed North Korea is engaged in evading the sanctions,” the official told Reuters.

South Korea’s customs service concluded that the Lighthouse Winmore had loaded about 14,000 tons of Japanese refined petroleum products in South Korea on Oct. 11, reportedly bound for Taiwan, the official said.

But instead, it transferred as much as 600 tons to the North Korea-flagged Sam Jong 2 on Oct. 19 in international waters between China and the Korean peninsula, on the order of its charterer, Billions Bunker Group Corp., based in Taiwan, the ministry official said.

It was not immediately possible to find contact information for the company.

A spokesman for Taiwan’s presidential office, Alex Huang, said the company was not incorporated in Taiwan.

“As a responsible member of international society, Taiwan will continue to fully comply with all U.N. sanctions against North Korea, in order to support peace and stability in the region,” he said in a statement.

The Hong Kong government said it was “liaising with the Korean parties concerned to obtain further information about the incident, and will take appropriate actions as necessary”.

Employees at the office of Lighthouse Ship Management, the ship’s registered manager, in the Chinese port city of Guangzhou, declined to comment and said they had no knowledge of the situation.

China’s foreign ministry spokeswoman said she did not have any information about the matter.

Both ships were among 10 vessels that the United States had proposed that the U.N. Security Council should blacklist for transporting banned items from North Korea, documents seen by Reuters this month showed.

China and Russia subsequently asked for more time to consider the U.S. proposal.

Ship tracking data in Thomson Reuters Eikon shows that the Lighthouse Winmore has mainly been doing supply runs between China and Taiwan since August.

Prior to that, it was active between India and the United Arab Emirates. In October, when it allegedly transferred petroleum products to the North Korean ship, the Lighthouse Winmore had its tracking transponder switched off.

The Trump administration has led a drive to step up global sanctions on North Korea in response to its efforts to develop nuclear-tipped missiles capable of hitting the United States.

The U.N. Security Council last week unanimously imposed new sanctions on North Korea for a recent intercontinental ballistic missile (ICBM) test, seeking to further limit its access to refined petroleum products and crude oil.

The U.S.-drafted U.N. resolution seeks to ban nearly 90 percent of refined petroleum exports to North Korea by capping them at 500,000 barrels a year.

It also caps crude oil supplies to North Korea at 4 million barrels a year and commits the Security Council to further cuts if North Korea conducts another nuclear or intercontinental ballistic missile test.

In September, the Security Council put a cap of 2 million barrels a year on refined petroleum products exports to North Korea.

(Additional reporting by Hyonhee Shin and Josh Smith in Seoul, Venus Wu and Tyrone Siu in Hong Kong and Brenda Goh in Shanghai; Writing by Ben Blanchard; Editing by Robert Birsel and Nick Macfie)

North Korea likely to pursue talks, South says in rosy New Year forecast

South Korean soldiers patrol along a barbed-wire fence near the militarized zone separating the two Koreas, in Paju, South Korea, December 21, 2017

By Haejin Choi

SEOUL (Reuters) – South Korea predicted on Tuesday that North Korea would look to open negotiations with the United States next year in an optimistic outlook for 2018, even as Seoul set up a specialized military team to confront nuclear threats from the North.

The U.N. Security Council unanimously imposed new, tougher sanctions on reclusive North Korea on Friday for its recent intercontinental ballistic missile test, a move the North branded an economic blockade and act of war.

“North Korea will seek negotiation with United States, while continuing to pursue its effort to be recognized as a de facto nuclear-possessing country,” South Korea’s Unification Ministry said in a report, without offering any reasons for its conclusion.

The Ministry of Defence said it would assign four units to operate under a new official overseeing North Korea policy, aimed to “deter and respond to North Korea’s nuclear and missile threat”.

Tensions have risen over North Korea’s nuclear and missile programs, which it pursues in defiance of years of U.N. Security Council resolutions, with bellicose rhetoric coming from both Pyongyang and the White House.

U.S. diplomats have made clear they are seeking a diplomatic solution but President Donald Trump has derided talks as useless and said Pyongyang must commit to giving up its nuclear weapons before any talks can begin.

In a statement carried by the official KCNA news agency, North Korea said the United States was terrified by its nuclear force and was getting “more and more frenzied in the moves to impose the harshest-ever sanctions and pressure on our country”.

China, the North’s lone major ally, and Russia both supported the latest U.N. sanctions, which seek to limit the North’s access to refined petroleum products and crude oil and its earnings from workers abroad, while on Monday Chinese Foreign Ministry spokeswoman Hua Chunying called for all countries to ease tension.

On Tuesday, Beijing released customs data indicating China exported no oil products to North Korea in November, apparently going over and beyond U.N. sanctions.

China, the main source of North Korea’s fuel, did not export any gasoline, jet fuel, diesel or fuel oil to its neighbor last month, data from the General Administration of Customs showed.

China also imported no iron ore, coal or lead from North Korea in November.

In its 2018 forecast, South Korea’s Unification Ministry said it believed the North would eventually find ways to blunt the effects of the sanctions.

“Countermeasures will be orchestrated to deal with the effects, including cuts in trade volume and foreign currency inflow, lack of supplies, and reduced production in each part of the economy,” the report said.

The latest round of sanctions was prompted by the Nov. 29 test of what North Korea said was an intercontinental ballistic missile that put the U.S. mainland within range of its nuclear weapons.

The Joongang Ilbo Daily newspaper, citing an unnamed South Korean government official, reported on Tuesday that North Korea could also be preparing to launch a satellite into space.

Experts have said such launches are likely aimed at further developing the North’s ballistic missile technology, and as such would be prohibited under U.N. resolutions.

The North Korean Rodong Sinmun newspaper said on Monday saying that “peaceful space development is a legitimate right of a sovereign state”.

North Korea regularly threatens to destroy South Korea, the United States and Japan, and says its weapons are necessary to counter U.S. aggression.

The United States stations 28,500 troops in the South, a legacy of the 1950-53 Korean War, and regularly carries out military exercises with the South, which the North sees as preparations for invasion.

(Additional reporting by Muyu Xu and Ryan Woo in Beijing; Writing by Josh Smith; Editing by Nick Macfie)

Japan, U.S., South Korea to hold missile tracking drill amid North Korea crisis

North Korean leader Kim Jong Un gives field guidance to various units in Samjiyon County, in this photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang

TOKYO (Reuters) – The United States, Japan and South Korea will hold two days of missile tracking drills starting on Monday, Japan’s Maritime Self-Defence Force said, as tensions rise in the region over North Korea’s fast-developing weapons programmes.

The United States and South Korea conducted large-scale military drills last week, which the North said made the outbreak of war “an established fact”.

North Korea has fired missiles over Japan as it pursues nuclear weapons and ballistic missiles in defiance of U.N. sanctions and international condemnation. On Nov. 29, it test-fired an intercontinental ballistic missile which it said was its most advanced yet, capable of reaching the mainland United States.

This week’s exercises will be the sixth drills sharing information in tracking ballistic missiles among the three nations, the defence force said.

It did not say whether the controversial THAAD system would be involved. The installation of the U.S. Terminal High Altitude Area Defense system in South Korea has angered China, which fears its powerful radar could look deep into China and threaten its own security.

North Korea’s missile test last month prompted a U.S. warning that North Korea’s leadership would be “utterly destroyed” if war were to break out. The Pentagon has mounted repeated shows of force after North Korean tests.

The United States has also pressured China and other nations to cut trade and diplomatic ties with North Korea, as part of international efforts to dry up Pyongyang’s illegal cash flows that could fund its weapons programmes.

On Sunday, South Korea said it would impose new unilateral sanctions on 20 institutions and a dozen individuals in North Korea, barring any financial transactions between those sanctioned and any South Koreans.

“This unilateral sanction will prevent illegal funds flowing to North Korea and contribute to reinforce international communities’ sanctions against North Korea,” South Korea’s finance ministry said in a statement.

The move is largely symbolic as trade and financial exchanges between the two Koreas have been barred since May 2010 following the torpedoing of a South Korean warship, which the North denied.

Japanese Defence Minister Itsunori Onodera said the ministry plans to include 730 million yen ($6.4 million) to help build a new missile interceptor system, the Aegis Ashore, in its next fiscal year budget request, public broadcaster NHK reported.

North Korea regularly threatens to destroy South Korea, Japan and the United States and says its weapons programmes are necessary to counter U.S. aggression. The United States stations 28,500 troops in the South, a legacy of the 1950-53 Korean War.

($1 = 113.4800 yen)

(Reporting by Kaori Kaneko, additional reporting by Haejin Choi in SEOUL, Editing by Nick Macfie)

As sanctions bite, North Korean workers leave Chinese border hub

: A North Korean waitress cleans the floor of a North Korean restaurant in Dandong, Liaoning province, China, September 12, 2016. REUTERS/Thomas Peter/File Photo

By Philip Wen

DANDONG, China (Reuters) – North Korean workers have begun to leave the Chinese border city of Dandong, following the latest round of sanctions seeking to restrict Pyongyang’s ability to earn foreign currency income, local businesses and traders say.

Almost 100,000 overseas workers, based predominantly in China and Russia, funnel some $500 million in wages a year to help finance the North Korean regime, the U.S. government says.

Dandong, a city of 800,000 along the Yalu river that defines the border with North Korea, is home to many restaurants and hotels that hire North Korean waitresses and musicians. Their colorful song and dance performances are a tourist attraction.

Thousands of predominantly female workers are also employed by Chinese-owned garment and electronics factories in Dandong, with a significant proportion of their wages going straight to the North Korean state.

The Wing Cafe used to advertise its “beautiful North Korean” waitresses on its shopfront by the Yalu. The sign is now gone, and cafe staff said the waitresses had returned home in recent weeks after their visas expired.

“There have been changes in government policy,” the manager of another restaurant said. “It’s not convenient to say more.”

Recent videos circulating on Chinese social media appear to show hundreds of North Korean women waiting in line to clear immigration at Dandong’s border gate. A Reuters reporter saw a group of around 50 North Korean women waiting to cross the border on Friday morning.

 

HARDER TO SMUGGLE, TOO

Four traders, who deal in goods ranging from iron ore and seafood to ginseng and alcohol, told Reuters the sanctions had all but crippled the usual trade.

More stringent customs checks and patrols by Chinese border police have also made it harder to smuggle goods across the border, according to the traders, who declined to be named due to the subject’s sensitivity.

“The impact has been huge. Dandong’s economy has always counted on border trade,” said one Chinese trader.

In response to Pyongyang’s sixth and largest nuclear test last month, the U.N. Security Council on Sept. 11 passed a resolution prohibiting the use of North Korean workers, strengthening an Aug. 5 resolution that put a cap on the number of workers allowed overseas.

Successive rounds of U.N. trade sanctions have now banned 90 percent of the North’s $2.7 billion of publicly reported exports.

The Sept. 11 sanctions also ordered the closure of all joint business ventures with North Korea and added textiles to a list of banned exports, which already included coal, iron ore and seafood.

In a statement on Thursday, China’s Ministry of Commerce ordered the implementation of the new sanctions across the country within 120 days.

 

FORCED TO LEAVE

The sanctions allow workers to serve out existing contracts. Business people in Dandong, through which most of trade between the two countries flows, said contracts could not be renewed and new visas were not being approved.

A Chinese supervisor at a factory making electronic wiring for automobiles said while most of its 300 North Korean workers were on multi-year contracts expiring at different times, those who arrived in Dandong after Aug. 5 had already been forced to leave. He did not say how many.

The sanctions have come as a rude jolt to Dandong businesses and traders who had long rolled with North Korea’s unpredictability but believed their neighbor’s economic reliance on China would keep its belligerence in check.

Dandong is one of the larger cities in Liaoning province, whose rustbelt economy has struggled under national campaigns to curb industrial overcapacity and ease pollution. Liaoning was China’s worst performer in the first half of 2017, registering GDP growth of 2.1 percent, compared with the national rate of 6.9 per cent, according to official statistics.

“The economy hasn’t been doing well here for the past two years,” said one trader. “This is making a bad situation worse.”

 

(Reporting by Philip Wen; Editing by Bill Tarrant)