Archive for the ‘Illicit activities’ Category

Myanmar promises halt to DPRK weapons purchases

Tuesday, May 15th, 2012

According to the AP (via Washington Post):

Myanmar’s president has confirmed that his country bought weapons from North Korea during the past 20 years and assured his South Korean counterpart that it will no longer do so.

In a meeting with visiting South Korean President Lee Myung-bak, Myanmar President Thein Sein said his country never had nuclear cooperation with North Korea but did have deals for conventional weapons, Lee’s presidential Blue House said in an announcement Tuesday.

Thein Sein told Lee that Myanmar will no longer buy weapons from North Korea, honoring a U.N. ban, South Korean presidential official Kim Tae-hyo told reporters traveling with Lee, according to Blue House officials in Seoul.

Lee is on an official visit to Myanmar, the first by a South Korean president since North Korean commandos staged a bloody 1983 attack on visiting South Korean dignitaries.

Myanmar cut off diplomatic relations with North Korea after the attack, but restored them in 2007 as it sought allies in the face of international sanctions over its human rights record and failure to install a democratic government. Myanmar also began buying weapons from North Korea, and was suspected of obtaining nuclear weapons technology as well.

Myanmar is taking steps to emerge from international isolation after decades of military rule ended last year. Those changes were highlighted Tuesday when Lee met opposition leader Aung San Suu Kyi, who was held for years under house arrest but is now a member of Parliament.

Suu Kyi said after the 45-minute meeting that South Korea and Myanmar have much in common in having had to “take the hard road to democratic leadership.”

Lee, speaking through an interpreter, said he and Suu Kyi had agreed that “democracy, human rights and freedom must never be sacrificed because of development.”

He said he had praised Thein Sein’s contribution to democratization when he met the Myanmar president on Monday.

He also said he told Thein Sein that he hoped his government “will refrain from any activities” with North Korea that could be considered in violation of U.N. Security Council resolutions. He described this as a formal request.

A U.N. resolution bars countries from obtaining all but small arms and light weapons from North Korea.

Lee on Tuesday made a brief visit to the site of the 1983 bombing, Martyr’s Mausoleum, a monument to Suu Kyi’s father, Myanmar independence hero Gen. Aung San. The attack left 21 dead, 17 of them South Korean, but failed to kill its target, then-President Chun Doo-hwan, who arrived late and was not harmed.

A statement from Lee’s office said he also agreed to expand South Korean financial assistance to Myanmar.

It said South Korea agreed to help Myanmar develop human resources, build a think tank and invite Myanmar students to South Korea in an effort to share its successful experience in economic development.

Previous posts involving Myanmar here. Recent highlights include the M/V Light Saga and articles by Bertil Linter.

Read the full story here:
South Korea says Myanmar has promised to stop buying arms from North Korea
AP via Washington Post
2012-5-15

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A North Korean Corleone

Wednesday, March 7th, 2012

Sheena Chestnut Greitens writes in the New York Times:

What kind of deal do you make with a 20-something who just inherited not only a country, but also the mantle of one of the world’s most sophisticated crime families? When Kim Jong-un, who is thought to be 28 or 29, became North Korea’s leader in December after the death of his father, Kim Jong-il, he became the de facto head of a mafia state.

(more…)

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“Recently” detained Japanese men returned home

Friday, January 20th, 2012

UPDATE 2 (2012-1-20): The DPRK has released two Japanese men recently detained in Rason. According to the Associated Press:

Two Japanese men detained in North Korea 10 months ago have returned home, a minister said Friday, adding it could be a “positive” diplomatic sign from the reclusive state.

The two arrived back in Japan this week, said Jin Matsubara, head of the National Public Safety Commission.

“I think this could be taken as a positive message from North Korea,” he told reporters.

Police declined to comment on whether the two men paid any money or why they were released.

The men, reportedly in their 30s and 40s were detained in a special economic zone near the communist state’s border with Russia. They returned via China.

Three Japanese men had initially been taken into detention in March last year, but one of them, who was in his 80s, was freed and returned to Japan in April, Jiji Press news agency and public broadcaster NHK said.

Reports said the three men were employees of a machine maintenance firm in Tokyo who had visited Rason city near North Korea’s border with Russia in March to check machines at a food manufacturing factory.

They were reportedly detained on charges of hiding drugs in canned goods to be exported to China and currency counterfeiting.

The release of these men was also covered in Bloomberg.

UPDATE 1 (2011-5-4): According to KCNA:

Japanese Detained in DPRK for Their Crimes

Pyongyang, May 4 (KCNA) — The Korean Central News Agency Wednesday issued the following report:

Masaki Furuya, former representative managing director of JP Dairin Co. Ltd., Hidehiko Abe, representative managing director of Realise Co. Ltd, of Japan, and Takumi Hirooka, managing director of Sugita Industrial Co. Ltd, of Japan, were put in custody by a relevant body on charges of drug trafficking and counterfeit after entering Rason City of the DPRK on March 14.

They admitted their crimes and their gravity.

Masaki Furuya had already been expelled from the DPRK and the two Japanese are called to legal accounts.

What they did is a very grave violation of the law of the DPRK and international law and they will, therefore, face proper legal actions.

The Wall Street Journal also reports that the DPRK held a Japanese man for drug smuggling from 2003-2009.

ORIGINAL POST (2011-4-20): According to Yonhap:

North Korea detained three Japanese men on apparent drug smuggling charges in its special economic zone last month, but it later released one man, a news report said Wednesday.

The three Japanese employees of a machine maintenance firm in Tokyo visited the city of Rason, near North Korea’s border with Russia, in March to check machines at a food manufacturing factory, Japan’s Asahi Shimbun newspaper said, citing unidentified sources.

They were detained on charges that they hid drugs in canned goods to be exported to China, though the North later allowed one of them to return to Japan, the newspaper said.

The North has demanded a large bail for the two detainees, it said.

South Korea’s Unification Ministry, which handles inter-Korean affairs in Seoul, and the pro-North Korean association in Tokyo said they had no information.

The North’s state media have not reported on the case.

North Korea arrested a Japanese man on drug smuggling charges in 2003 before allowing him to return home on humanitarian grounds in 2009.

The news came days after North Korea confirmed the detention of a Korean-American man on a crime against the North.

The North said it will indict Jun Young-su, who was arrested in November, claiming he admitted his crime in the course of the investigation, the North’s official Korean Central News Agency reported Thursday.

According to the Korea Times the men were detained in Rason.

Read the Yonhap story here:
N. Korea detains two Japanese men: report
Yonhap
2011-4-20

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“Ponghwajo” reports

Wednesday, January 18th, 2012

UPDATE 1 (2012-1-19): Writing in the Asia Times, Michael Rank offers an update on the Ponghwa group (Ponghwajo, 봉화조):

It is widely assumed that if anyone knows what the North Koreans are up to, it’s the Chinese, and Chinese-language Internet sites have provided news stories about drug smuggling and border-crossing refugees. But there seems to have been a clampdown in the last year or two and these sources have dried up.

However, the Beijing magazine Kan Tianxia published a noteworthy article after Jong-il’s death highlighting the so-called Ponghwa group consisting of the sons (and presumably the occasional daughter) of the Pyongyang elite.

This privileged clique, which was first formed around 2000, consists of people mainly in their 30s and, the magazine claims, included Jong-eun himself after he returned home from his studies in Switzerland.

It says the group’s purpose is to strengthen Jong-eun’s power base and to act as his backstage support.

The article quotes an informed source as saying the Ponghwa group are mainly graduates of Kim Il-sung University, Pyongyang Foreign Languages University and other elite institutions, and that they tend to work in the security and intelligence apparatus and in top government organs such as the supreme procuratorate (prosecutor’s office).

The word Ponghwa means “smoke of battle” and also has connotations of “advance guard”. It is the name of the area of Pyongyang on the Taedong River that was the home of Kim Il-sung’s mother Kang Pan-sok; it is also the name of Pyongyang’s most elite hospital and there is a Ponghwa underground station.

The group is said to be headed by the sons of two generals. One of these is O Se-hyon, the second son of General O Kuk-ryol, who, according to the North Korea Leadership Watch (NKLW) blog, participated in a crucial meeting hours after Jong-il’s death which “began the order of operations which publicized KJI’s [Kim Jong-il’s] demise and taking on KJI’s remaining administrative and command mechanisms”.

The other leader is Kim Chol, son of General Kim Won-hong, who, according to rumors, was involved in various scandals but was nevertheless promoted to full general in 2009. General Kim, like the fathers of several Ponghwa members named in the article, belongs to the super-elite as is clear from his listing as a member of Jong-il’s funeral committee.

Ponghwa members also include the son of former veteran ambassador to Switzerland Ri Chol (Ri Tcheul) who is said to have been close to the young Jong-eun when he attended the International School in Bern, as well as the son of vice premier Kang Sok-ju. Kang was until 2010 the senior vice minister of foreign affairs and is, according to NKLW, a cousin of Jong-il; he also has has ties to Jong-eun’s mentors and uncle and aunt, Jang Song-taek and Kim Kyong-hui.

Members of elite groups such as the Ponghwa set are visible to the foreign community in Pyongyang where they frequent hard currency shops and restaurants, and have a clear parallel in China where the sons and daughters of top officials are assiduous in exploiting family connections.

Although Jong-eun is said to be as omniscient and omnipotent as his father and grandfather, almost nothing is known for sure about him. There is little doubt that he went to school in Switzerland, and the Chinese magazine claims this has been confirmed in North Korean “propaganda documents” – probably internal briefing materials distributed to senior officials.

Pyongyang watchers experienced a mild frisson when his mother was mentioned in a television documentary earlier this month, as this was the first time there had been official recognition that he has a mother. She has never been officially named, apparently because she was a Japanese-born Korean, and also because her relationship with Jong-il was not a happy one. She is said to have died in Paris in 2004.

Nobody is sure if Jong-eun was born in 1983 or 1984. According to a book written by his father’s former live-in chef [Kenji Fujimoto], his birthday is on January 8, but there were no signs of celebration in Pyongyang on that day. Perhaps it was considered unfitting to celebrate so soon after his father’s demise.

The only utterance attributed to Kim Jong-eun is a paean of praise to the joys of working all night. “Even when I work night after night, once I have brought joy to the comrade supreme commander, the weariness vanishes and a new strength courses through my whole body. This is what revolutionaries should live for.”

His father and grandfather were also fond of lauding the joys of working through the night, and there’s nothing North Korean leaders fear more than original thinking.

ORIGINAL POST (2011-4-18): Today the media was abuzz with rumors of the DPRK’s most exclusive club: Ponghwajo (aka: Bonghwajo, 봉화조).  This club is composed of the children of ruling elites, and according to the rumors, they not only generate substantial sums of hard currency, but they also know how to spend it.  Below are some stories about the group:

Choson Ilbo:

When Kim Jong-chol, the second son of North Korean leader Kim Jong-il, spent 10 leisurely days in Singapore in February going on a luxury shopping spree and attending an Eric Clapton concert, he was apparently joined by a brat pack of children of powerful officials in North Korea.

An official source here said Sunday intelligence information reveals Kim Jong-chol (30) and members of the so-called Ponghwajo or torch group not only visited Singapore, but also went to Macao and Malaysia to gamble and shop.

The Ponghwajo consists of the regime’s princelings, not to be confused with the children of early high-ranking officials who fought as revolutionaries along with former North Korean leader Kim Il-sung. These sons of the revolutionaries are now in their 50s and 60s and have recently been tapped to serve in key positions under North Korea’s heir apparent Kim Jong-un.

But the Ponghwajo are in their 30s and 40s and are not viewed favorably by the regime’s leadership. Though they are often engaged in activities that generate dollar revenues through drug sales, counterfeiting and black market trade, they apparently do not wield much political power.

The group was formed in the early 2000s by O Se-won, the son of Gen. O Kuk-ryol, a senior leader in North Korea’s powerful National Defense Commission, and Kim Chol, the son of Kim Won-hong, head of the People’s Army Security Command. Its members include Ri Il-hyok, the first son of Ri Chol, former North Korean ambassador to Switzerland and the official in charge of handling Kim Jong-il’s secret bank accounts, as well as Kang Tae-seung, the eldest son of First Vice Foreign Minister Kang Sok-ju and Jo Song-ho, the eldest son of the late Jo Myong-rok, first vice chairman of the National Defense Commission who died last year.

Donga Ilbo:

Certain members of Bonghwajo, a club of the children of North Korea’s power elite, accompanied Kim Jong Chul, 30, the second son of North Korean leader Kim Jong Il, when the junior Kim attended Eric Clapton’s concert in Singapore in February.

Like “Crown Prince Party, or The Princelings,” a group of the children of prominent and influential senior communist officials in China, Bonghwajo is comprised of children of ranking officials of the North Korean Workers’ Party, military and senior members of its Cabinet.

Due to their parents’ influence, the children reportedly landed jobs at powerful organizations and are earning money through illegal activities such as counterfeiting and narcotics trafficking.

A source on North Korea said, “Kim Jong Chul is forming a closer relationship with Bonghwajo members after his younger brother Jong Un was named Kim Jong Il’s heir apparent.”

“When Jong Chul went to Singapore to watch Eric Clapton’s concert, certain Bonghwajo members accompanied him and paid all of the costs for his stay and shopping in Singapore.”

The source said, “Jong Chul and Bonghwajo members visited not only Singapore but also Macau and Malaysia in February,” adding, “Visiting the three countries, they gambled with up to 300,000 U.S. dollars and purchased expensive products at department stores.”

Formed in the early 2000s, Bonghwajo is reportedly led by O Se Hyon, second son of National Defense Commission Vice Chairman O Kuk Ryul, and Kim Chul, first son of the General Political Department Director Kim Won Hong at the People`s Army. Kim Jong Un joined the club when he turned 20, while Kim Chang Hyok, son of Kim Chung Il, deputy director of Kim Jong-Il`s personal secretariat, also became a member.

Bonghwajo was named after the village of Bonghwa in Pyongyang`s Kangdong County, where Kim Jong Il’s grandmother Kang Ban Sok lived. Bonghwa is construed as meaning “frontier” in North Korea.

Bonghwa Medical Center, the North’s top hospital, is where Kim Jong Il underwent treatment when he suffered a stroke in 2008.

Bonghwajo is also known to deal in illegal activities such as counterfeiting and drug trafficking. The Washington Times reported in May last year that Bonghwajo was involved in illegal activities, including circulation of “super notes,” or ultra-high precision counterfeit 100-dollar bills, and drug trafficking.

U.S. intelligence say O Se Hyon was entangled in the incident of the Bongsu-ho, North Korea’s drug trafficking boat that was caught by Australia in April 2003, and is related with counterfeit bills discovered in Las Vegas in 2004.

Bonghwajo members are said to be habitually taking drugs as well as trafficking them. Kim Chul, who works at the general surveillance bureau under the (North) Korean People’s Army Ministry, is earning money through drug trafficking in China and elsewhere and paying kickbacks to Kim Jong Un and Kim Jong Chul.

The group is even called a narcotics club because drug use is so rampant among members, with leader O Se Hyon undergoing treatment at a detention facility due to heroine inhalation.

Daily NK:

The existence of ‘Bonghwajo’, a grouping of the children of North Korea’s highest leadership including Kim Jong Eun, has made headlines in South Korea in recent days, raising questions about what role this group of powerful youngsters might be playing in the succession.

‘Bonghwajo’ members are said to be involved in foreign currency-earning businesses, many of them illegal, while also working in key areas of the National Security Agency, General Bureau of Reconnaissance, Ministry of the People’s Armed Forces, Central Prosecutors’ Office and other high organs. They reportedly curry favour by financially supporting both Kim Jong Eun and elder brother Kim Jong Cheol.

Therefore, one analysis has it that the Bonghwajo, which is analogous with China’s ‘Princelings’ is both a group for the strengthening of Kim Jong Eun’s power and a private bank through which to finance the successor’s activities.

Cho Young Ki, a professor with Korea University, told The Daily NK today, “Bonghwajo can be read as being Kim Jong Eun’s support group. The Three Revolutionary Teams took the initiative in the establishment of Kim Jong Il’s power, and I presume that Bonghwajo might be performing the same role.”

Professor Cho added, “Kim Jong Cheol, who lost his practical power after publicizing the succession structure, is likely to be providing this group with his support.”

Head of World North Korea Study Center An Chan Il agreed, suggesting, “It appears that Bonghwajo may be intervening in personnel management while offering funds for Kim Jong Eun obtained from foreign currency-earning businesses.”

An went on to describe a group led by Kim Jong Il’s half brother Kim Pyong Il and Oh Il Cheong (the son of former Minister of the People’s Armed Forces Oh Jin Wu) at the time of Kim Jong Il’s elevation.

An said, “Even though we didn’t know their name, there was a group that came before ‘Bonghwajo’, and the nature of ‘Bonghwajo’ could be the same as that of the group led by Kim Pyong Il.” He went on, “Kim Pyong Il worked as the group’s main leader, but then he was put in a ‘sub-branch’ and got sent overseas. But Oh Il Cheong switched line and is now a Lieutenant-General.”

The ‘Bonghwajo’ group may well consider that it is in the same boat as Kim Jong Eun. Therefore, its members are likely to work to expand their power in the Party, military and foreign currency earning organs so to ensure Kim Jong Eun’s succession and their own access to power and money for the years to come.

The core members of the Bonghwajo are said to be Oh Se Hyun, the second son of Vice Chairman of the National Defense Commission Oh Keuk Ryul, Kim Cheol, who is the eldest son of Kim Won Hong (the vice director in charge of political organization in the General Political Department of the People’s Army), Kang Tae Sung, the eldest son of Vice Premier of the Cabinet Kang Suk Ju, Kim Cheol Woong, the second son of Kim Choong Il (a former vice director in Kim Jong Il’s Secretary’s Office), and Cho Sung Ho, the eldest son of Cho Myeong Rok (former first vice chairman of the National Defense Commission).

However, professor Cho pointed out, “Even if Bonghwajo make an effort to establish Kim Jong Eun’s smooth power succession, it is doubtful whether they can reign properly. The extent of their activities and legitimacy may decide whether or not they are able to support Kim Jong Eun.”

Meanwhile, Yonhap News has claimed that drugs are so prevalent within the group that it is known as a drug club, and Oh Se Hyun has reportedly been treated for addiction.

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N. Korean currency sustains steep fluctuations

Friday, December 16th, 2011

According to Yonhap:

The North Korean currency has recently gained 20 percent against the Chinese yuan, a rare development blamed on rumors of the North’s counterfeiting, a source familiar with the issue said Friday.

The North Korean won was traded at 1,000 won to 1 Chinese yuan a week ago, but 1 yuan is now worth only 800 won in the country’s major northeastern city of Chongjin.

The source said, on condition of anonymity, that the demand for foreign currencies has surged on rumors a week ago that a lot of North Korea’s currency being circulated in the market was counterfeit.

The rumor quickly spread across the country via merchants who have mobile phones. However, it later turned out to be groundless, which helped the North Korean currency regain strength against yuan.

North Koreans favor Chinese yuan and U.S. dollars over their own currency after a botched currency reform as they believe foreign currencies are more stable, according to the Unification Ministry, which handles inter-Korean affairs.

China is the North’s key ally, economic benefactor and diplomatic supporter.

In 2009, the North carried out a massive currency reform to try to rein in galloping inflation, squash free market activities and tighten state control over the economy. However, the measures failed to halt massive inflation and worsened food shortages and public backlash.

A North Korean defector in South Korea said there are several big shots in Pyongyang who manipulate exchange rates in the market by starting rumors such as the banning of foreign currencies.

In recent years, mobile phones have emerged as tools for spreading news in the isolated country where the communist regime tightly controls its 24 million people.

The number of mobile phone users in North Korea has jumped to more than 535,000 as of March, up 420 percent from the same time last year, according to Orascom Telecom, Egypt’s cell phone service provider in the North.

Read the full story here:
N. Korean currency sustains steep fluctuations
Yonhap
2011-12-16

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Syrian missile factory built with DPRK cooperation

Tuesday, November 29th, 2011

The German newspaper Die Welt published a story which claims North Korea supplied Syria with a maraging steel and technical support which it has used to upgrade an underground missile factory that produces M-600 missiles.

Maraging steel is on the the Nuclear Suppliers Group (NSG) and the Missile Technology Control Regime (MTCR) monitoring lists, and its export is prohibited to sanctioned countries. North Korea is also prohibited from such activities under UNSC resolutions 1718 and 1874.

The Syrian missile factory, as identified in Haaretz,  can be seen on Google Earth at 35.006089°,  36.827331°, Google Maps, and Wikimapia, but below I have posted a couple of screen shots:

 

Above (left) is an overhead shot of the underground facility. Above (right) is a closeup of the facility entrance. Assuming the floor plan of the factory is a simple square, it could be 1,000m x 1,000m in area–and that is just one floor! The oldest Google Earth imagery of the facility is from 2003-7-12.

Additional information:
1. Joshua Pollack recently published a paper on the demand for conventional North Korean military output.  If you have not read it, you should. Click here for a link to the paper.

2. The International Institute for Strategic Studies (IISS) published North Korean Security Challenges: A Net Assessment. It presents a thorough analysis of the range of threats emanating from the DPRK. In addition to an assessment of military hardware and posture, the 216-page book looks at state criminality and behaviour relating to human security.

3. Joeseph Bermudez wrote about a North Korean missile factory here.

4. Previous posts on the DPRK and Syria are here, including nuclear proliferation.

Read the full stories below:
Syrien rüstet Raketen mit Nordkoreas Hilfe auf
Die Welt
2011-11-24

North Korea supplying Syria, Iran with prohibited nuclear technology, report says
Haaretz
Yossi Melman
2011-11-28

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DPRK-South Sudan diplomatic ties established

Friday, November 18th, 2011

Pyongyang, November 18 (KCNA) — The governments of the DPRK and South Sudan established diplomatic ties at an ambassadorial level.

A joint communique on the establishment of bilateral diplomatic relations was made public in Ethiopia on Nov. 16.

The communique was signed by Kim Hyok Chol and Arop Kuol Deng, ambassadors of the DPRK and South Sudan to Ethiopia, upon authorization of the governments of their countries.

The two countries agreed to open their diplomatic ties from the very day of their signature to the joint communique, on the basis of the principle of respect for sovereignty, equality, reciprocity and non-interference and in line with the April 18, 1961, Vienna Convention on Diplomatic Relations.

Since all North Korean embassies must self-finance their operations, it is not likely that they will open an embassy in South Sudan until there are sufficient business contracts to maintain the office overhead. In the meantime, many of their diplomatic and consular functions will probably be held out of the Ethiopian embassy.

What kind of business opportunities await the DPRK in South Sudan? South Sudan is the world’s newest oil-producing nation, so it is likely that the DPRK will try to pursue oil contracts there. As a new nation, South Sudan also has an interest in building up its military capabilities. The DPRK has long supplied military equipment to the African continent, so they will probably look for opportunities in this new nation as well.

To date, the DPRK maintains embassies in the following African countries: Benin, Burundi, Cape Verde, DR Congo, Côte d’Ivoire, Equatorial Guinea, Ethiopia, Ghana, Guinea, Guinea-Bissau, Libya, Madagascar, Mali, Niger, Nigeria, Rwanda, Somalia, South Africa, Tanzania, Uganda, and Zimbabwe.

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Greece seizes DPRK-made chemical weapons suits

Wednesday, November 16th, 2011

According tot he AFP (2011-11-16):

Greek authorities seized almost 14,000 anti-chemical weapons suits from a North Korean ship possibly headed for Syria but did not disclose the find for nearly two years, diplomats said Wednesday.

The seizure was reported to the UN Security Council, which discussed the monitoring of nuclear sanctions against the isolated North, diplomats said.

The Greek operation was carried out in November 2009 but only reported to the United Nations in September, a diplomat told AFP on condition of anonymity in confirming the number of suits to protect against chemical weapons involved.

“It seems the shipment was headed for Latakia in Syria,” a second diplomat said, noting that the Greek report to the council did not mention Syria.

“There is increasing concern because more and more of the violations before several sanctions committees seem to involve Syria.”

Syria has already been linked to breaches of an arms embargo against Iran.

Both diplomats spoke on condition of anonymity as the report by the chairman of the North Korea sanctions committee, Portugal’s UN Ambassador Jose Filipe Moraes Cabral, was given behind closed doors.

The UN Security Council ordered tough sanctions against North Korea after it staged nuclear weapons tests in 2006 and 2009.

The North pulled out of nuclear talks with China, the United States, Japan, Russia and South Korea in 2009 and efforts to kick start negotiations are struggling, with the United States and its allies saying that North Korea is not serious about disarmament.

In a comment sent on an official Twitter account, a British diplomat said it was “clear that North Korea (is) still violating” Security Council resolutions.

“Strong concerns in council about the ongoing proliferation efforts,” added a German diplomat. Neither mentioned the seizure of the anti-chemical weapons suits.

Additional Information:

1. Here and here are the two UN panel of Experts reports on the DPRK which detail other UN embargo violations.

2. The Security Council this morning extended the mandate of the Panel of Experts helping monitor sanctions on the Democratic People’s Republic of Korea for an additional year, until 12 June 2012.

3. Here are links to embargo violations which I previously posted.

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Jordanian bank tied to DPRK illicit weapons trade

Friday, October 7th, 2011

UPDATE (2011-10-10): According to the Jordan Times, the Bank denies any involvement:

The Arab Bank on Sunday stressed that it has never dealt with the government of North Korea or Tanchon Bank, which the US has accused of being the primary financial agent behind Pyongyang’s weapons programmes. “Based on a review of its customer account and transaction records, Arab Bank does not believe that it has conducted business with the government of North Korea or Tanchon Bank,” a spokesperson from the Arab Bank said.

In a diplomatic cable sent by the US State Department to the US embassy in Amman in August 2007, officials warned that the Arab Bank could be unwittingly assisting proliferation-related transfers between Iran, Syria and North Korea. “We are concerned that Iran, Syria and DPRK [Democratic People’s Republic of Korea] proliferation entities are using the Arab Bank network to process what may be proliferation-related transactions,” read the cable, released by WikiLeaks on its website at the end of August and viewed by The Jordan Times.

According to the cable, the US knew that as of 2007, North Korea’s Foreign Trade Bank mission in Tripoli, Libya (FTB Libya) had expanded its role in North Korea’s banking network and was helping Tanchon Commercial Bank, the banking arm of North Korea’s primary weapons trading firm, KOMID, to move funds from both Syria and Iran.

It added that in 2007, FTB Libya provided assistance to Tanchon in making remittances from funds from the sale of unspecified, probably proliferation-related goods in Syria.

“Our information indicates that Tanchon is establishing this new arrangement because Tanchon could no longer remit funds through a route it had previously used. FTB Libya arranged remittance routes for Tanchon from Syria and other locations via intermediary banks… We have information that Tanchon’s financial transfers are conducted surreptitiously by using either aliases or front companies,” the US State Department said in the cable.

The US reportedly claimed that the transfers, which were probably proliferation-related, occurred inside the Arab Bank network and involved both Arab Bank branches and the Arab Tunisian Bank, of which, according to the US, the Arab Bank is a 64.2 per cent stakeholder.

“By processing these transactions, Arab Bank could be unwittingly assisting proliferation-related activities,” read the cable.

In the cable, the State Department called on Jordan to maintain vigilance with regard to Syrian, Iranian and North Korean financial transactions in its jurisdiction to prevent these countries from using deceptive financial practices to further their proliferation-related activities, urging appropriate authorities to investigate such transactions.

The Arab Bank spokesperson told The Jordan Times that the bank has not found any records indicating that Jordanian government officials provided it with information concerning surreptitious efforts by North Korea to move funds through its network.

Citing the cable’s reference to “deceptive financial practices” by North Korea, the spokesperson emphasised that without knowing the details of these efforts by North Korea to conceal its financial transactions, it is not possible for Arab Bank or any other bank to address these allegations with any more specificity.

“As noted in the US State Department cable, Arab Bank is one of the ‘most respected banks in the Middle East’, with a network that spans 30 countries and five continents. The bank maintains a state of the art compliance programme, works closely with banking regulators in all countries where it operates, and has a long history of providing safe and secure banking services,” the spokesperson stressed.

A US embassy official in Amman told The Jordan Times last week that the embassy’s policy is not to comment on WikiLeaks cables.

ORIGINAL POST (2011-10-7): According to the Wall Street Journal:

As it sought to stop North Korea from spreading its nuclear technology, the U.S. uncovered signs in 2007 that the country was channeling funds through a major Middle Eastern bank based in Jordan, one of its closest regional allies, according to diplomatic cables posted online by document leaking website WikiLeaks.

In the cables, viewed by The Wall Street Journal, U.S. officials warned their counterparts in Jordan that North Korea was using Amman-based Arab Bank PLC to receive money from Syria and Iran, circumventing international sanctions.

The U.S. has said, apart from the cables, that it believes Syria purchased North Korean nuclear technology, including a nuclear reactor that Israel bombed in 2007. The U.S. also believes that Iran has acquired long-range missiles from North Korea.

“We are concerned that Iran, Syria, and DPRK [North Korea] proliferation entities are using the Arab Bank network to process what may be proliferation-related transactions,” read an August 2007 cable from the U.S. State Department to the U.S. Embassy in Amman.

The warnings provide a rare glimpse into U.S. efforts to stop North Korea from spreading arms and nuclear technology to its enemies. U.S. officials have said as recently as last month that North Korea is still aggressively establishing a network of front companies through which to secretly sell its weapons and evade sanctions.

“U.S. efforts have helped to spur isolation, but I think there is still a cat-and-mouse aspect to North Korean illicit financial activity,” Juan Zarate, a White House counterterrorism official until 2009, said Thursday.

In the cables, the U.S. said it was concerned that North Korea helped one of its lenders, Tanchon Commercial Bank, which it describes as the “primary financial agent behind the DPRK’s weapons programs,” to funnel money from Syria and Iran through Arab Bank.

The governments of Syria, Iran and North Korea didn’t respond to calls and emails requesting comment. A spokeswoman for the Jordanian Embassy in Washington declined to comment.

The cables said those transactions “have occurred through Arab Bank PLC, one of the oldest and most respected banks in the Middle East.”

Arab Bank said it didn’t believe it had processed any North Korean funds. “Based on a review of its customer account and transaction records, Arab Bank does not believe that it has conducted business with the government of North Korea or Tanchon Bank,” the bank said.

“In addition, Arab Bank has not found any records indicating that government officials provided information to the bank concerning surreptitious efforts by North Korea to move funds through its network,” it said.

The U.S. cables, which were posted at the end of August, suggest that Arab Bank may have processed the purported North Korean transactions unwittingly. They say that Tanchon was conducting its financial transfers surreptitiously using aliases and front companies.

In interviews, current and former U.S. officials said warnings such as those reported in the cables aren’t unusual and don’t indicate that they viewed Arab Bank as a particular cause for concern.

The bank was fined by U.S. banking regulators in 2005 for lacking adequate safeguards to stop money laundering and terrorist financing. Since then, a U.S. official said, Arab Bank has taken major steps to shore up its internal controls and has emerged as one of the more responsible lenders in the region.

The cables don’t say how large the purported transactions were, or their purpose. Nor do they say what, if anything, was done after the warnings.

Arab Bank is facing several civil lawsuits in a New York federal court dating to 2004 that allege it knowingly helped fund Palestinian terrorist attacks. The suits, brought by family members of those killed or injured in the attacks, allege the bank acted as a conduit for money from Saudi donors that went to families of suicide bombers and terror groups, a charge the bank denies.

In a statement, Arab Bank said it complies with banking laws in all 30 countries where it does business, including the U.S. “The bank abhors terrorism and has not done business with terrorists or terrorist organizations designated by these countries,” it said.

Jordan has interceded on Arab Bank’s behalf in the suits, arguing that the bank is being unfairly punished for failing to turn over what it says are confidential client records. In a November 2010 court brief, Jordan said a set of legal sanctions imposed by the U.S. judge hearing the case could destroy the bank. Because Arab Bank was a crucial cog in the regional economy, that outcome would be “potentially calamitous” for the economies of the Middle East, the brief said.

The appeals court has called a hearing on Nov. 14. However, Arab Bank has asked for it to be postponed as its lawyer cannot make it that day due to a conflict with another case.

While the leaked cables show the U.S. had concerns about illicit money transfers at Arab Bank two years after the 2005 punishment, they also include a U.S. expression of support for the bank. In a July 2008 cable, the U.S. Embassy in Amman said it saw no reason why the U.S. shouldn’t provide financing for Arab Bank and two other Jordanian financial institutions.

“The embassy does not have any information that these banks or their investors have known ties to terrorists, money laundering, corruption, or violations of the law,” it stated.

According to UPI:

A bank in Jordan, a strong U.S. ally in the region, may have unknowingly moved cash for the North Koreans to finance illicit weapons programs, cables suggest.

Sensitive cables distributed by WikiLeaks and reviewed by The Wall Street Journal suggest Jordan’s Arab Bank PLC was used by North Korea to get money from Syria and Iran to help with its proliferation activity.

An August 2007 cable from the U.S. State Department to Washington’s embassy in Amman expressed concern “that Iran, Syria and DPRK (North Korea) proliferation entities are using the Arab Bank network to process what may be proliferation-related transactions.”

Arab Bank, in a statement published by the Journal, said it “does not believe” it carried out business with the North Koreans. The bank was fined in 2005 by U.S. banking regulators for not having mechanisms in place to prevent money laundering and terrorist financing, the newspaper adds.

The cables suggest the Jordanian bank processed the North Korean activity without knowing about it.

The International Atomic Energy Agency, at its regular summer meeting with the board of governors in Vienna, expressed concern about the Syrian, North Korean and Iranian nuclear programs.

I have created  a wikileaks story index which you can see here.

Read the full stories here:
Cables Say Syria, Iran Illegally Moved Cash to North Korea
Wall Street Journal
Thomas Catan
2011-10-7

Jordanian bank tied to illicit weapons?
UPI
2011-10-7

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US sanctions Syrian bank for DPRK connection

Sunday, August 14th, 2011

UPDATE 1 (2011-8-17): The recently sanctioned bank denies it has ties to Iran and the DPRK. According to Lebanon’s Daily Star:

The Lebanese subsidiary of a Syrian bank sanctioned by the United States denied on Wednesday “unfounded political allegations” that it dealt with North Korea and Iran.

“Since the establishment of our institution, we have never had any operation with either a North Korean or an Iranian entity even before the existing sanctions,” the Syrian Lebanese Commercial Bank said.

“As a result, we deny all accusation of being involved in any illegal activity with any suspected country,” a statement added.

The United States Treasury has charged that the state-owned Commercial Bank of Syria allegedly supported Syria and North Korea’s efforts to spread weapons of mass destruction.

Washington last week imposed sanctions on the bank, the Syrian Lebanese Commercial Bank and telecoms company Syriatel over President Bashar al-Assad’s increasingly brutal crackdown on pro-democracy protests.

The move freezes the US assets of the businesses targeted and prohibits US entities from engaging in any business dealings with the two banks.

ORIGINAL POST (2011-8-14): The US has sanctioned a Syrian Bank for its involvement in DPRK proliferation activities.  According to Yonhap:

The Treasury Department said the Commercial Bank of Syria has provided financial services to North Korea’s Tanchon Commercial Bank and Syria’s Scientific Studies and Research Center, both of which were blacklisted for the proliferation of weapons of mass destruction.

The Syrian bank’s Lebanon-based subsidiary, Syrian Lebanese Commercial Bank, and Syriatel, the largest mobile phone operator in Syria, were also sanctioned under Wednesday’s measure.

“By exposing Syria’s largest commercial bank as an agent for designated Syrian and North Korean proliferators, and by targeting Syria’s largest mobile phone operator for being controlled by one of the regime’s most corrupt insiders, we are taking aim at the financial infrastructure that is helping provide support to (President Bashar) Asad and his regime’s illicit activities,” Under Secretary for Terrorism and Financial Intelligence David S. Cohen said in a press release.

The Commercial Bank of Syria also holds an account for Tanchon Commercial Bank, the primary financial agent for the Korea Mining Development Corp., North Korea’s premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons, according to the department.

The U.S. is stepping up efforts to isolate the Assad regime amid its brutal crackdown on anti-government protesters.

NTI has additional information here.

Other DPRK-Syria stories below:
1. Syria and the DPRK collaborated on the construction of Syria’s nuclear facility which was destroyed in 2007 by an Israeli air strike.

2. According to Joshua Pollock, over the last decade the DPRK and Syria have cooperated on missile development.

3. The UNSC was investigating a shipment of North Korean chemical safety suits to Syria.

4. Syria’s Tishreen War Museum was designed and built by North Koreans!

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