December 10, 2020 | Policy Brief

U.S. Sanctions Companies Helping North Korea Export Illegal Coal

December 10, 2020 | Policy Brief

U.S. Sanctions Companies Helping North Korea Export Illegal Coal

The U.S. Treasury Department on Monday sanctioned six Chinese and Vietnamese companies and four ships – one flying Vietnam’s flag and three flying unknown flags – for exporting North Korean coal. Although these are the first sanctions addressing North Korea’s maritime sanctions-evasion activity in more than a year, there is copious evidence that Pyongyang clandestinely never stopped trading coal and other sanctioned goods.

The six companies that Treasury targeted are Weihai Huijing Trade Limited, Always Smooth Limited, Good Siblings Limited, Korea Daizin Trading Corporation, Silver Bridge Shipping Company, and Thinh Cuong Company Limited. The four shipping vessels are Asia Bridge, Calm Bridge, Lucky Star, and Star 18. These companies and ships are in violation of UN Security Council Resolution 2371 of 2017, which imposed a full ban on trading coal with North Korea.

Only a day before Treasury’s announcement, The Wall Street Journal published a story revealing satellite images that show six North Korean-flagged ships loaded with coal entering Chinese ports between June and August 2020. Among these six ships, Treasury sanctioned one, Lucky Star, through its latest action and sanctioned another, Oriental Treasure, earlier in February 2018. The other four remain undesignated. According to The Wall Street Journal, an anonymous senior U.S. State Department official shared U.S. government data indicating that the Kim regime exported 4.1 million metric tons of coal between January and September 2020. The total value of these exports ranged between $330 million and $410 million.

Beyond illicit coal exports, North Korea also continues to violate UN Security Council resolutions by importing oil and petroleum products. UN Security Council Resolution 2397 of 2017 capped North Korean imports of refined petroleum to 500,000 barrels per year starting on January 1, 2018. Pyongyang continues to exceed this import cap.

Earlier this August, a UN Panel of Experts tasked with investigating North Korean sanctions evasion revealed that Pyongyang continues the “illicit import of refined petroleum products through ship-to-ship transfers and direct deliveries.”

The panel recommended that the UN Security Council sanction eight vessels – four flying Sierra Leone’s flag, two flying North Korea’s flag, one flying China’s flag, and one flying an unknown flag – that have continued transporting petroleum products even after Pyongyang exceeded the import cap. Yet these ships remain unsanctioned.

Moving forward, the United States can lead by example by sanctioning the vessels mentioned in these UN reports and by conducting additional investigations into Pyongyang’s maritime evasion activities.

The U.S. government should also increase outreach to shipping registries, as they can play a critical role in mitigating North Korea’s deceptive shipping activities by de-registering vessels that violate UN or U.S. sanctions. If the registries are not responsive, Washington should leverage the Countering America’s Adversaries Through Sanctions Act of 2017, which provides the executive branch with the authority to blacklist registries that do not comply with UN or U.S. sanctions.

It is imperative that the next administration improve sanctions enforcement efforts to cut off the Kim regime’s sources of illicit revenue. Failure to do so would only provide Pyongyang with the means to bolster its weapons of mass destruction and threaten Washington and its allies further down the road.

Mathew Ha is a research analyst focused on North Korea at the Foundation for Defense of Democracies (FDD), where he also contributes to FDD’s Center on Economic and Financial Power (CEFP). For more analysis from Mathew and CEFP, please subscribe HERE. Follow Mathew on Twitter @MatJunsuk. Follow FDD on Twitter @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.


China International Organizations North Korea Sanctions and Illicit Finance