Tuesday November 07, 2017

North Korea circumvents sanctions through maritime trade, says professor

The U.S. and the world have ratcheted up sanctions against North Korea. But according to Robert Huish, there's an important loophole the sanctions overlook.

The U.S. and the world have ratcheted up sanctions against North Korea. But according to Robert Huish, there's an important loophole the sanctions overlook. (Korean Central News Agency/Reuters)

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As part of his Asia tour, U.S. President Donald Trump is in South Korea Tuesday — within North Korea's shadow.

For months now, the U.S. and the world have ratcheted up sanctions against the rogue state. But according to Robert Huish, there's an important loophole the sanctions overlook.  

Over the past two years, the Dalhousie University associate professor has been monitoring shipping traffic at two North Korean ports. He notes there's a significant amount of vessel traffic coming in and out of Nampo Harbour, one of the country's primary ports of call, and Sinpo Harbour, a military port.

"And by significant, I don't mean in terms of the quantity that you would expect at a regular operating port like Vancouver but enough vessel traffic coming into both Sinpo and Nampo to demonstrate that North Korea is getting access to resources through maritime trade," Huish tells The Current's Anna Maria Tremonti.

'The maritime industry is extremely murky.' - Robert Huish'

During a time of increased sanctions imposed against North Korea by the U.S. and the UN, Huish's findings show the country still managed to get access to resources.

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Though U.S. Donald Trump has threatened North Korea with 'fire and fury' in the past, he's likely to hear from South Korean President Moon Jae-in that more sanctions are needed against the North. (Kevin Lamarque/Reuters)

But what remains a mystery is what is on the shipping vessels.

"The maritime industry is extremely murky. And this allows vessels to skirt authorities frequently so no boats can be flagged in countries of convenience. The vessels can be managed and owned by shell companies. They can often falsify the cargo that they're carrying," he explains.

"They can also even be deceptive in terms of where their crews are employed from. So taken that together, you've got this very difficult phenomenon to try to track."

Tracking maritime vessels

However, what can be tracked with maritime vessels Huish says is who owns and manages them and who insures these boats.

"Insurance is, I think, something that is key and something that past sanctions and current sanctions are overlooking."

hi-852-panama-canal

In 2013, Panamanian officials say they found unspecified weapons, hidden in containers of brown sugar, in a North Korean-flagged ship coming from Cuba. (Alberto Lowe/Reuters)

Huish explains there are two forms of insurance that maritime vessels need — regular insurance for vessels and cargo and unlimited liability handled by the Protection and Indemnity (P&I) clubs. 

"This is essentially a nonprofit club where many maritime companies will get together and they will pay in annually into a collective pot. So if a claim is made, there is no corporate underwriter to challenge it. It's relatively self-governed."

Huish points out there's a strategy that is being ignored when it comes to North Korea, and it comes down to the very basis of sanction theory "that the target nation is going to behave like a nation, that it wants to be a good global citizen."

'The Kims are quite content to be a hermit kingdom.' - Robert Huish

But North Korea and the Kim regime run their country like a Mafia state, he says.

"The Kims are quite content to be a hermit kingdom, to be isolated from the popular world and still have their shadowy networks of commerce and trade."

So in order to put pressure on curbing trade to North Korea, he suggests P&I insurance is one of the most available and easiest areas to start.

"In the past, there have been sanctions on P&I clubs with fairly positive effect," he tells Tremonti.

In 2005, P&I clubs sanctioned vessels coming out of Iran that stopped energy transports from Iran to the European Union.

"So a similar thing could happen with either the U.S., the EU or the United Nations ... [to] take a closer look at some of the protection and indemnity clubs that have insured North Korean vessels that had been flagged under the North Korean flag, or vessels that are running under flags of convenience that have been operating in and out of North Korea for some time."

Listen to the full conversation above.

This segment was produced by Halifax network producer Katy Parsons.