20/04/2015

1

THE SANCTIONS REGIME OF

UN SECURITY COUNCIL RESOLUTIONS

1718 (2006), 1874 (2009), 2087 (2013) and

2094 (2013)

Katsuhisa Furukawa

Member of the Panel of Experts established pursuant to resolution 1874 (2009)

Email: furukawa@un.org; Tel.: +1 212 963 3415

OVERVIEW

2

1. The DPRK’s nuclear- and ballistic missile-related activities

2. Incidents of noncompliance: nuclear- and ballistic missile-related items

3. Incidents of noncompliance: arms and related materiel

4. Evasion of sanction by the designated entities and individuals

5. Key Messages

20/04/2015

2

1. The DPRK’s nuclear- and

ballistic missile-related

activities

3

DPRK prohibited programmes

• DPRK did not yet abandon its nuclear, other WMD and ballistic missile programmes.

• DPRK did not cease all related activities.

• Nuclear and missile-related infrastructures expanded.

4

20/04/2015

3

Significant activities

observed at the

DPRK’s Sohae launch

site

20/04/2015

4

The DPRK’s participation in

the Joint Institute for Nuclear Research

• The DPRK has participated in the activities of an international intergovernmental research organization for nuclear sciences called the Joint Institute for Nuclear Research, headquartered in the Russian Federation.

• The DPRK is one of the countries that founded the Institute in 1956, that it may send specialists to work at the Institute’s laboratories and that its representatives may (and have to) participate in sessions of the Scientific Council.

20/04/2015

5

20/04/2015

6

The DPRK’s Ministry of Atomic Energy Industry and the

General Bureau of Atomic Energy (aka. General

Department of Atomic Energy or GDAE)

National Aerospace

Development Administration

• In January 2013, the Security Council designated the Korean Committee for Space Technology for having orchestrated the Unha-3 launches in April and December 2012 through the satellite control centre and the Sohae launch centre.

• Three months later, the National Aerospace Development Administration was established as the “country’s central guidance institution organizing all the space development projects”

20/04/2015

7

2. Incidents of

noncompliance:

nuclear- and ballistic

missile-related items

14

20/04/2015

8

Case 1: Comparison of Unha-3 rockets launched

in April 2012 (left) and December 2012 (right)

15(Sources: Pedro Ugarte/AFP/Getty Images (left), KCNA/AP Images (right))

Recovered debris of Unha-3

16

20/04/2015

9

17

Separation connector

18

20/04/2015

10

Pressure switches

19

Turbo pump

20

20/04/2015

11

Radial ball bearings

21

Unha-3 debris

• The debris of the Unha-3 rocket salvaged by the Republic of Korea in December 2012 contained a number of foreign-sourced components that had been manufactured by companies in a number of different countries.

• Almost all are off-the-shelf items that do not meet any of the specifications in the lists of prohibited items, in particular the ballistic missile-related list.

� Importance of applying catch-all export control mechanism.

22

20/04/2015

12

An intermediary company involved

• It acquired the pressure transmitters and sold them in 2006 and 2010 to a DPRK company, Korea Chonbok Trading Corporation.

• The second sale was purportedly for its oil industry and took place when the Royal Team Corporation attended a trade show in Pyongyang.

• Royal Team Corporation was previously prosecuted for violation of local export control regulations.

• A intermediary company

regarding the pressure

transmitters is confirmed as

Royal Team Corporation,

registered in Taiwan Province of

China.

Case Study 2:

Unmanned aerial

vehicle wreckage

Autopilot from the unmanned

aerial vehicle found at

Baengnyeongdo Island

20/04/2015

13

Foreign-sourced items found inside the

unmanned aerial vehicle at Paju/Samcheok

20/04/2015

14

Paragraph 22 of resolution 2094 (2013)

• “Calls upon and allows all States to prevent the direct or

indirect supply, sale or transfer to or from the DPRK or its

nationals, through their territories or by their nationals, or

using their flag vessels or aircraft, and whether or not

originating in their territories of any item if the State

determines that such item could contribute to the DPRK’s

nuclear or ballistic missile programmes, activities prohibited

by resolutions 1718 (2006), 1874 (2009), 2087 (2013), or this

resolution, or to the evasion of measures imposed by

resolutions 1718 (2006), 1874 (2009), 2087 (2013), or this

resolution…”

• Please see the Security Council 1718 Committee’s

“Implementation Assistance Notice No. 4”.27

Implementation Assistance Notice No. 4: Proper

implementation of paragraph 22 of resolution 2094 (2013)

• There may be supplies, sales, or transfers of items with technical specifications just below those provided in lists of prohibited ballistic missile-, nuclear-, and other weapons of chemical- and biological-weapons-related items.

• Individuals and entities known to have participated in prohibited programs or activities are frequently involved in the supply, sale or transfer of prohibited items. The use of front companies is common for transfers of prohibited items and facilitation of related payments.

• Deceptive labeling or documentation, as well as attempts to conceal the origin, destination, or ultimate end-use or end-user of items, have all been associated with the supply, sale, or transfer of items

• The previous work of the Committee and its Panel of Experts may also be a source of additional useful information to help States determine whether an item's supply, sale, or transfer should be prevented.

28

20/04/2015

15

electrical boxes or relays

thermal switches or relays

Case 3: October 2007 seizure of ballistic missile

items destined for the Syrian Arab Republic

• The shipment of ballistic missile-related items was seized by a Member State in October 2007. It contained 130 blocks of solid double-base propellant, electrical and thermal switches, rolls of different materials and small quantities of metallic alloys, as well as Korean food and other items.

• It was confirmed by another Member State that 50 of the doublebase propellant blocks (6 cm in diameter and 13 cm in height) were usable for gas generators to power Scud missile turbopumps.

Source: Authorities of the Member State that seized the cargo.

Double-base propellant block

Inspecting authorities’ analysis: “This propellant is very sensitive to impact”.

20/04/2015

16

Requirements for Member States

• Not much useful information available in open sources.

• Need evidence that can be used in judiciary process.

– Classified intelligence information is not helpful.

– Primary official information is needed.

• Some information is very difficult to obtain.

– Nuclear warhead components.

31

Case 4: Graphite cylinders seized by the Republic

of Korea

32(Source: the Panel of Experts)

20/04/2015

17

• In July 2012, the Republic of Korea reported to the Committee that it had inspected and seized an illicit shipment of missile-related items on board the container vessel Xin Yan Tai operated by China Shipping Container Lines while in transit at the Port of Busan in May 2012.

• The result of laboratory tests conducted by the Republic of Korea showed that these graphite cylinders were “fine grain graphite” defined by item 6.C.3 of S/2012/235, export of which by the DPRK is prohibited under paragraph 8 (b) of resolution 1718 (2006).– Fine grain graphites are usable for rocket nozzles and

re-entry vehicle nose tips.

33

Lessons

• How many Member States have that level of laboratory capacity?

• If a MS does not have such laboratory capacity, it has to rely on international cooperation.

– Chain of custody

– Agreement

– Cost-sharing mechanism…

• These issues have to be addressed before interdiction of the items.

34

20/04/2015

18

35

• Japan seized 5 aluminium alloy rods found onboard the container

ship Wan Hai 313 (IMO number 9248708) in August 2012. Japanese

authorities determined that the rods originated from the DPRK and

met the criteria of IAEA document INFCIRC/254/Rev.7/Part 2.

Case Study 5: Nuclear-related items seized by

Japan in August 2012

Control parameter provided on the NSG list

NSG criteria

•“2.C.1. Aluminium alloys having both of the following characteristics: a. 'Capable of' an ultimate tensile strength of 460 MPa or more at 293 K (20 °C); and

•b. In the form of tubes or cylindrical solid forms (including forgings) with an outside diameter of more than 75 mm. Technical Note: In Item 2.C.1. the phrase 'capable of' encompasses aluminium alloys before or after heat treatment.”.

�However, NSG list is silent on the methodological standards for testing the items.

36

20/04/2015

19

How do you inspect the items?

• Physical stress test is generally used as a destructive

testing method.

– But can this be always used by the relevant

authorities?

• Costs

• Time

• Storage of evidence

• Non-destructive testing methods

37

How do you test the following criteria?

1. C. 2. b. Metal alloys, as follows, made from the powder or particulate material specified by 1.C.2.c.:1. Nickel alloys having any of the following:a.A 'stress-rupture life' of 10,000 hours or longer at 923 K (650°C) at a stress of 676 MPa;…

1. C. 2. b. 3. Titanium alloys having any of the following:a. A 'stress-rupture life' of 10,000 hours or longer at 723 K (450°C) at a stress of 200 MPa; or5. Magnesium alloys having all of the following:a. A tensile strength of 345 MPa or more; andb. A corrosion rate of less than 1 mm/year in 3% sodium chloride aqueous solution measured in accordance with ASTM standard G-31 or national equivalents;

10,000 hours is equals to 416.66 days, more than a year.38

20/04/2015

20

Lessons learned

• Need to share good practices of inspection of

items and methodological standards.

• Establish cooperative relationships with:

– Industries

– Scientific communities

• Ensure chain of custody of the evidence to

meet judiciary requirements.

39

3. Incidents of

noncompliance:

arms and related materiel

40

20/04/2015

21

41

Case 1: Seizure of arms and related material

onboard Chong Chon Gang by Panama, July 2013

Containers hidden under 200,000 bags of sugar

42

MiG-21 fuselage, tails, wings and engines

20/04/2015

22

43

MiG-21, Low Blow radar, and SA-3 launcher

P-19 radar

44

20/04/2015

23

Ammunition boxes and 57-mm fragmentation cartridges

45

73 mm projectiles and PG-7VR round

Arms and related materiel concealed below sugar bags

• The vessel had loaded and was carrying 25 shipping containers and 6 trailers hidden below 10,000 tons of sugar, but repeatedly and falsely stated to Panamanian authorities and the ship’s local agent that the vessel was carrying only sugar.

• Instead of loading the containers topmost (as would be recommended for dangerous cargo) the ship was adapted to load 40 foot containers deep in the hold so that they could be covered by three layers: sugar bags/tween deck hatch cover/sugar bags.

46

20/04/2015

24

Dangerous stowage practice

• The loading of the arms and related materiel on-board the Chong Chon Gang was poorly conceived and executed and did not comply with standards or best practices.

• The sugar bags placed on top caused considerable damage to the shipping containers and trailers.

• In addition, should the bags of sugar break, leakage of sugar into the equipment would have caused damage.

– Sugar takes and retains moisture and creates treacle-like stickiness, which causes corrosion and adhesion of impurities.

– It is also a serious risk to electronics in terms of moisture damage.

47

Damages to the containers

Chong Chon Gang: Dangerous stowage practice

• More importantly, loading the sugar on top of the arms shipment placed at risk the ship, its crew and any other ships or infrastructure in close proximity.

• An explosion of ammunition tamped down with sugar could have caused considerable damage.

• The Chong Chon Gang has a history of fire-related deficiencies and no measures had been taken to allow constant monitoring of the ammunition’s container or to flood the compartments in the event of a fire or heat build-up.

� This is a clear indication that concealment took priority over appropriate safety precautions and potential risks to life, shipping, and related infrastructure.

48

20/04/2015

25

Case 2: March 2008 seizure of military

shipment destined for Islamic Republic of Iran

• A Member State about seized in March 2008 two containers of rocket fuses shipped from the DPRK in violation of paragraph 8 (b) of resolution 1718 (2006).

• This shipment had originated from the Democratic People’s Republic of Korea and its declared ultimate destination was Bandar Abbas, Islamic Republic of Iran.

• This shipment, declared as “generator parts”, contained 5,000 point detonating fuses for unguided rockets and related materiel. They were loaded in two 20-feet containers.

49

• The shipment had originated in the port of Nampo, DPRK, and

its declared ultimate destination was Bandar Abbas, Iran.

• The shipment had been declared to contain “generator parts”.

However, inspection showed that it contained 5,000 rocket

fuses and related materiel (fuse setting devices and cable

assembly).

50Source: Panel of Experts

20/04/2015

26

Case 3: July 2009 seizure of military shipment destined

for Islamic Republic of Iran

• The United Arab Emirates seized on 22 July 2009 military shipment

aboard ANL Australia. The cargo was falsely described on the shipping

documents as oil boring machine (spare parts). The cargo was custom

sealed and loaded on a DPRK ship in the port of Nampo, DPRK, and

trans-shipped multiple times on its way to the declared destination,

Bandar Abbass, Islamic Republic of Iran.

Source: Panel of Experts

20/04/2015

27

Case 4: December 2009 seizure by Thailand of

conventional arms and munitions, destined for Iran

• On 11 December 2009, Thailand interdicted

an Ilyushin-76 aircraft carrying 35 tons of

arms and related materiel. The airway bill

issued by Air Koryo indicated the cargo as

145 crates of “mechanical parts”.

The cargo contained some 35 tons of conventional arms and munitions, including 240 mm rockets, rocket-propelled grenades, thermobaric grenades and man-portable air-defence systems (MANPADS) surface-to-air missiles.

Source: Panel of Experts

54

The shipper was Korea Mechanical Industry Co. Ltd, a DPRK entity, and that the consignee was Top Energy Institute located in Iran.

20/04/2015

28

55

Case 5. November 2009 seizure by Israel of arms

shipment from Iran to Syria

In November 2009, Israel seized a large arms consignment (500 tons) shipped by Iran to Syria onboard the vessel Francop when en route from Damietta, Egypt, to Lattakia, Syria. Some items may have originated from the DPRK.

Source: Israeli Ministry of Foreign Affairs, Flickers

Common characteristics of

the DPRK’s rocket fuses

56

20/04/2015

29

Common characteristics of the DPRK’s rockets

57

58

20/04/2015

30

Case 6: Ammunition abandoned by Mouvement du

23 mars

• Mouvement du 23 mars abanedoned arms and related materiel after it retreated from positions in the eastern Democratic Republic of the Congo in October and November 2013. Some of the ammunition originated in the DPRK might have been part of the shipment from that country to the DRC in early 2009.

• The 107-mm and 122-mm rockets and fuses were most probably manufactured in the DPRK. All the ammunition shares similar features with the DPRK’s manufactured equivalents known to the Panel, including the paint coating, markings, lot numbers, model names, quality control stamps and asterisk stamps on the fuses.

• The lot numbers “XX-08-XX” were assigned to the 107-mm rockets and fuses, suggesting a 2008 production year, which is also consistent with the date on the tags of the rocket crates. The lot numbers “1-97” assigned to the 122-mm rockets indicate that they were manufactured either in 1997 or 2008.

Ammunition abandoned by Mouvement du 23 mars

20/04/2015

31

Case 7: Arms and related materiel intercepted

onboard the Jeehan 1

• Yemeni authorities intercepted a shipment of arms and related materiel that originated in the Islamic Republic of Iran onboard the vessel Jeehan 1.

• Information obtained by the Panel indicates that some of the ammunition in the shipment has markings similar to those manufactured by the DPRK.

Case 8: Arms and related materiel and technical

assistance provided to the Republic of the Congo

20/04/2015

32

4. Evasion of sanction by the

designated entities and

individuals

64

20/04/2015

33

OMM

Ocean Maritime Management Company, Limited

(OMM)

• On 28 July 2014, the UN Security Council 1718 Committee designated Ocean Maritime Management Company, Limited (OMM) for targeted sanctions for its key role in arranging the shipment of concealed arms and related materiel on board the vessel Chong

Chon Gang from Cuba to the Democratic People’s Republic of Korea in July 2013.

• OMM partnered with Korea Tonghae Shipping Co Ltd, Tonghae Sonbak Co Ltd, Sohae Sonbak Co Ltd, and Taedonggang Sonbak Co Ltd.

20/04/2015

34

OMM’s Global Networks

OMM Bangkok: Ri Pyong Gu

20/04/2015

35

Mr. Ri provided daily instructions to the master

of the Mu Du Bong, OMM-controlled vessel

69

20/04/2015

36

Mariner’s Shipping and Trading Co., Ltd.

Korea Mirae Shipping-related entities

Korea Mirae Shipping Co., Ltd.’s Shenzhen Representative Office

• Aka. Mirae Shipping Co., Ltd., Shenzhen Office

• Chief Representative : Mr. Yang Bong Rim

• Deputy Representative : Mr. Lee (phone +86 15813730174)

Mirae Shipping (H.K.) Co., Ltd.

• Address: 18th Floor, Thungsun Commercial Centre, 194-200, Lockhart Road, Wan Chai, Hong Kong, China.

• Director: Mr. Hiroshi Kasatsugu (nationality: Japan; passport number: TK0666126)

20/04/2015

37

Korea Mirae Shipping-related entities

OMM Dalian

• No. 10, 10th Floor Unit 1, No. 32-1 Wuwu Road, Zhongshan District, Dalian, China

• Representative: Chungu Jin

Mr. Pak In Su

• Nationality: DPRK

• Passport number: 290221242

• Date of birth: 23 May 1957

• Employed by Malaysian Coal and Minerals Corporation Sdn Bhd until 2 January 2015

20/04/2015

38

Mr. Hiroshi Kasatsugu

• Mr. Hiroshi Kasatsugu, Mirae Shipping Hong Kong’s director, isalso chief executive officer (CEO) of a Japan-based company, Kinyo Shipping Co., Ltd. which has been officially listed by Chongryon (aka General Association of Korean Residents) as one of its associated entities.

• For years, Kinyo Shipping was reportedly in charge of “general agency functions” for the DPRK’s vessels and involved in shipping agent services for OMM-controlled vessels before the adoption of resolution 1718 (2006).

• Kinyo Shipping has also shared administrative and/or operational functions with another Japan-based company, OMM Incorporated. The two companies are registered with almost identical lines of business. Mr. Kasatsugu was formerly listed as OMM Inc.’s director until March 2003.

1007株式会社 近洋海運

株式会社 オーエムエム

Room 1007Kinyo Shipping Co., Ltd.OMM Incorporated

20/04/2015

39

Senat Shipping

• Singapore-based companies named Senat

Shipping & Trading Private Limited, Senat

Shipping Limited, and Senat Shipping Agencty

Pte. Ltd. have undertaken extensive activities

on behalf of Ocean Maritime Management

Company.

20/04/2015

40

5. Key messages

79

Asian Member States yet to submit National

Implementation Report (as of 7 February 2015)

• Afghanistan

• Bangladesh

• Bhutan

• Cambodia

• Iran

• Iraq

• Malaysia

80

• Myanmar

• Nepal

• Oman

• Syria

• Tajikistan

• Timor-Leste

• Yemen

20/04/2015

41

DPRK prohibited activities

DPRK continues to engage in prohibited trades:

•Export of missile-related items;

•Export, import or brokering of arms and related materiel, as well as transfer of arms-related services;

•Import of luxury goods;

•Designated entities and individuals continue to conduct business abroad.

81

Patterns of sanctions evasions in trade in

goods

• Legitimate trade is often used as cover

• Multiple layers of intermediaries, shell companies

and financial institutions, use of small companies

• Falsification of cargo manifest documentation

• Transshipments

• Dual-use items

• Physical concealment measures

=> Legitimate companies, including air carriers, sea

carriers and banks, can become implicated in a

sanctions violation. 82

20/04/2015

42

Patterns of sanction evasion

DPRK diplomatic personnel and officials are often engaged in or providing support to prohibited activities:

•Making arrangements for shipment or delivery of prohibited items;

•Attempt to acquire prohibited items and technology;

•Facilitating financial transfers related to prohibited activities;

•Involved in attempt to procure luxury goods. 83

Key messages

• Sanctions measures are being unevenly implemented

• They have raised the cost of conducting illicit business to the DPRK.

• They have not halted all DPRK’s prohibited programs and activities.

• The implementation of the sanctions is everybody responsibilities (no countries or regions are spared by DPRK’s prohibited activities).

• Effective implementation requires close internal and international cooperation and information sharing.

84

20/04/2015

43

Useful Links

•DPRK Sanctions Committee webpage: www.un.org/sc/committees/1718/

•UN Security Council Resolution 1718 (2006)

•UN Security Council Resolution 1874 (2009)

•UN Security Council Resolution 2087 (2013)

•UN Security Council Resolution 2094 (2013)

•Reports of the Panel of Experts (2010, 2012, 2013)

•FATF Guidance Document: The Implementation of Financial Provisions of UN SCR to Counter the Proliferation of WMD (29 June 2007)

85

FOR MORE INFORMATION:

http://www.un.org/sc/committees/1718/

Contact:

Fax: +1 212 963 2013

Email: dpa-poe4@un.org

86