N. Korean coal, pig iron shipped to S. Korea in violation of U.N. resolution

Lim Chang-won Reporter Posted : 2018-08-10 16:21 Updated : 2018-08-10 16:21
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[Yonhap News Photo]


SEOUL -- South Korean companies were found to have imported about 35,038 tons of North Korean coal and pig iron last year through a Russian port, using forged documents or other illegal means, in violation of United Nations sanctions banning the shipment of mineral resources from the impoverished country.

The Korea Customs Office (KCS) said Friday that North Korean coal and pig iron worth a total of 6.6 billion won ($5.87 million) were brought into South Korea seven times from April through October last year. It referred three importers and three business entities to state prosecutors for indictment. 
 
They were accused of trans-shipping mineral resources at a Russian port by fabricating the country of origin.

The KCS announcement supported allegations that Russia has served as a transit hub for illicit North Korean coal exports. North Korea is banned from exporting mineral resources under Resolution 2371 passed in August last year. 

There have been news reports that foreign cargo ships such as the Belize-flagged Jin Long, the Sierra Leone-registered Rich Glory and the Panama-registered Sky Angel have been involved in the shipment of North Korean coal from the Russian port of Nakhodka. The ships have frequently visited South Korean ports since the U.N Security Council imposed a blanket ban on North Korean coal, iron, lead and other minerals.

North Korean coal was consumed by Korea South-East Power, a subsidiary of South Korea's state power company Kepco, sparking concerns about a secondary boycott. The South Korean government came under fire because a state probe has been delayed.

The customs office accused the importers of having traded for profits. They were found to have deceived the country of origin or used other illicit methods that do not need a certificate of origin.

North Korean coal and iron were imported as a cost of brokerage or an exchange of goods, leaving no traces of payment and bank transactions that have complicated an investigation, the office said.

North Korea suffered a staggering trade deficit last year, reflecting prolonged sanctions that have aggravated the North's economic woes. South Korean central bank data showed that North Korea suffered an 11 percent drop in mining output last year. The North's trade volume stood at $5.55 billion last year, down 15 percent from a year earlier. 

Mineral resources have been a key source of hard currency for the North, but China has joined the international community to implement a U.N. resolution. In return for denuclearization, North Korea wants the international community to ease sanctions, but the United States and its allies were cautious.