Britain To Build A ‘National Flagship’ To Promote Maritime Trade
by Alistair Smout (Reuters) – Britain is to build a new flagship to promote its business and trade interests around the world, the government said on Saturday, in a move it...
By Kanga Kong and Dan Murtaugh (Bloomberg) — Trafigura Group denied it was involved in the illicit transfer of fuel to North Korea after the South Korean government said the world’s third-biggest independent oil trader originally owned a cargo that was shipped in breach of United Nations sanctions in October.
The controversy nonetheless could spook international traders working in the region worried their oil and refined products could find their way to North Korea. In turn, that could increase the pressure on Pyongyang, making it more difficult and expensive for the rogue regime to buy fuel in the face of international sanctions.
President Donald Trump last week accused China of allowing ship-to-ship fuel sales to the isolated nation, which have been limited by UN Security Council resolutions in an effort to pressure Kim Jong Un to abandon nuclear weapons.
Trafigura said on Tuesday that it didn’t order the shipment of oil to North Korea and it neither owns nor chartered the vessel Lighthouse Winmore that was seized by South Korea last year. Hours earlier, the South Korean foreign ministry said the trading house owned the cargo and authorities were investigating whether it ordered the transaction.
To read an earlier story on oil shipments to North Korea, click here.
The trading house, which has big operations in Singapore, Geneva and Houston, originally sold the shipment to a little-known Hong Kong-based company called Global Commodities Consultants Ltd. The deal was done on a free-on-board basis from South Korea for delivery to Taiwan, it said. The contract prohibited the on-sale of the cargo in breach of sanctions and Trafigura had no involvement in its final destination, according to the company.
Global Commodities Consultants also sold the cargo onward after purchasing it from Trafigura and with the same contractual provisions on sanctions, according to a company official.
Oil shipments often change hands repeatedly in the trading industry, often while vessels are at sea, leaving the initial seller unaware of the final destination of the commodity. Still, large trading houses such as Trafigura often monitor through vessel tracking systems the end point of cargoes they sell.
Today’s controversy relates to a small cargo of fuel oil that changed hands in October last year in the Yellow Sea between China and the Korean peninsula.
The Lighthouse Winmore tanker transferred the fuel in October in international waters, South Korean officials said last week, without naming Trafigura at the time. So-called ship-to-ship transfers are used in the petroleum industry to move liquids from one tanker to another without the use of on-shore infrastructure, a technique explicitly barred for supplies to North Korea by the UN Security Council because such sales are difficult to track.
South Korea, which said it seized and inspected the Lighthouse Winmore in November, identified the charterer as Taiwan-based Billions Bunker Group. The company is incorporated in the Marshall Islands, according to Taiwan’s Maritime and Port Bureau.
The vessel loaded oil products from Japan on Oct. 11 in Yeosu, Yonhap News reported last week, citing South Korean government officials. It then transferred 600 tons — about 4,000 barrels or enough to power a shipping vessel — to a North Korean vessel, the Sam Jong 2, on Oct. 19. At current prices, the cargo would be worth less than $1.5 million. Considering that traders often make as little as one percent of the value of the deal, whoever sold it likely earned as little as $15,000 from the operation.
Vessel tracking data compiled by Bloomberg showed the ship making trips between Kaohsiung in Taiwan and Yeosu in South Korea during September and October. The vessel data, which are broadcast by ships voluntarily and cannot be independently verified, showed it south of Yeosu, with its destination listed as Tai Chung, Taiwan, on Oct. 15. The next transmission was Oct. 25, further to the south near Jeju island.
© 2018 Bloomberg L.P
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