High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
By Polina Nikolskaya MOSCOW, Sept 20 (Reuters) – At least eight North Korean ships that left Russia with a cargo of fuel this year headed for their homeland despite declaring other destinations, a ploy that U.S. officials say is often used to undermine sanctions.
Reuters has no evidence of wrongdoing by the vessels, whose movements were recorded in Reuters ship-tracking data. Changing a ship’s destination once underway is not forbidden and it is unclear whether any of the ships unloaded fuel in North Korea.
But U.S. officials say that changing destination mid-voyage is a hallmark of North Korean state tactics to circumvent the international trade sanctions imposed over Pyongyang’s nuclear weapons program.
Changing course and the complex chain of different firms –many offshore — involved in shipments can complicate efforts to check how much fuel is supplied to North Korea and monitor compliance with a cap on fuel imports under U.N. sanctions.
“As part of North Korea’s efforts to acquire revenue, the regime uses shipping networks to import and export goods,” U.S. Assistant Secretary of the Treasury Marshall S. Billingslea told the congressional Foreign Affairs Committee this month.
“North Korea employs deceptive practices to conceal the true origins of these goods. Pyongyang has been found to routinely falsify a vessel’s identity and documentation.”
The eight vessels identified in the tracking data set sail from the Far Eastern Russian port of Vladivostok or nearby Nakhodka and registered China or South Korea as their destination with the Information System for State Port Control.
After leaving Russia, they were next recorded off the North Korean ports of Kimchaek, Chongjin, Hungnam or Najin. None went on to China and most went back to Russia.
All had a cargo of diesel, a source at the company that services vessels in Vladivostok said. Their cargo capacity ranged from 500 tonnes to 2,000 tonnes.
One of the vessels was the Ma Du San, owned by North Korea’s Korea Kyongun Shipping Co. It took on a cargo of 545 tonnes of marine fuel at Vladivostok’s Pervaya Rechka terminal, owned by Russia’s Independent Petroleum company (IPC).
Reuters obtained a bill of lading — a receipt for goods issued when a ship loads up — dated May 19 showing the Ma Du San’s cargo came from Khabarovskiy NPZ, a refinery owned by IPC.
The ship set sail on May 20. Documents filed with Russia’s Information System for State Port Control stated its next destination as the Chinese port of Zhanjiang and the bill of lading showed it as Busan in South Korea.
The Ma Du San’s next recorded location after Vladivostok was inside the perimeter of the port of Kimchaek — all the other ships were tracked only in the vicinity of ports. North Korean ships intermittently turn off their transponders, and satellites cannot track them at such times, U.S. officials say.
Allegations outlined in two U.S. Treasury Department sanctions orders and a legal complaint filed by the U.S. government match the information Reuters obtained on the Ma Du San though the U.S. documents do not name the vessel involved.
On June 1, the U.S. Treasury Department included IPC on its sanctions blacklist, saying it provided oil to North Korea and may have been involved in circumventing sanctions.
On Aug. 22, the U.S. government sanctioned two more companies, both registered in Singapore — Transatlantic Partners and Velmur Management Pte. Ltd.
The legal complaint, also filed on Aug. 22, accused the two firms of money laundering on behalf of sanctioned North Korean banks seeking to buy petroleum products, citing a bill of lading for May 19 for a cargo of diesel sold by IPC to Velmur and loaded in Vladivostok — the same date as the bill of lading for the Ma Du San.
Andrey Serbin, who represents Transatlantic Partners, said the firm had not received payments from a sanctions-hit bank and that ownership of the fuel changed after it was loaded.
“We sold the fuel to a Chinese company,” Serbin, who has been blacklisted by the U.S. government for “operating in the energy industry in the North Korean economy” and working to purchase fuel for delivery to North Korea, said of several shipments where the company acted as middleman.
“There’s no way we can control them (the goods),” he said.
Serbin did not identify the vessels Transatlantic Partners loaded fuel on to, but a source in a company that services ships in Vladivostok said the Ma Du San was among them.
The bill of lading named the recipient of the Ma Du San’s cargo as a company called LLC Sky Shipping Limited. Reuters was unable to find any record of such a firm.
Velmur said it could not have known where the cargo would end up and did not knowingly help anyone dodge sanctions.
IPC did not respond to a request for comment. Its parent company, Bermuda-registered Alliance Oil Company Ltd., denied having any contractual relations with North Korean companies when U.S. sanctions were imposed on IPC.
The U.S. Treasury and State departments declined to answer questions about Reuters’ findings.
Russia’s foreign ministry did not respond to questions about fuel exports to North Korea but has said Russia complies with the sanctions. Russia’s customs service said it could not provide information about movement of goods across borders.
Since the U.S. sanctions were imposed on IPC, all North Korean-flagged vessels that had been in Vladivostok port have left, according to the tracking data.
They departed with no cargo, an employee with a shipping agent in Vladivostok said. This is confirmed by documents seen by Reuters.
Russian supplies of oil and oil products to North Korea are much smaller than volumes shipped by China, Pyongyang’s only major ally. Beijing has acted to reduce the flows, but Russia’s trade in all goods with North Korea more than doubled in the first quarter of 2017 to $31.4 million.
Moscow’s trade with Pyongyang is under closer scrutiny following a series of missile launches by North Korea and a test involving what it said was a hydrogen bomb.
(Additional reporting by David Brunnstrom in WASHINGTON, Chen Aizhu in BEIJING, James Pearson in SEOUL, Katya Golubkova, Gleb Stolyarov, Vladimir Soldatkin and Olesya Astakhova in MOSCOW; Editing by Christian Lowe and Timothy Heritage)
(c) Copyright Thomson Reuters 2017.
Join the 67,377 members that receive our newsletter.
Have a news tip? Let us know.