March 7, 2017 2 Comments
The sensational assassination of Kim Jong-nam, half-brother of North Korea’s Supreme Leader Kim Jong-un, on February 13, revealed much about the current operational mindset of Pyongyang. But it also brought to light the shady network of front companies set up by the North Korean regime to facilitate the country’s illicit financial activities around the world. This extensive network permits Pyongyang to evade international sanctions against it, and to coordinate the activities of hundreds of clandestine operatives around the world. Through these activities, the reclusive country has been able to develop its weapons of mass destruction program unabated, despite concerted efforts by the United Nations to prevent it from doing so.
Writing for Forbes, Scott Snyder, senior fellow for Korea Studies and director of the program on US-Korea Policy at the Council on Foreign Relations, notes that the UN has for many years employed sanctions to “block international financial and material support for North Korean nuclear and missile development efforts”. But now the UN’s own experts have concluded that Pyongyang has been able to evade these sanctions so skillfully that it has “largely eviscerated the intent and impact of UN sanctions resolutions”. How has it done so? Mostly through a network of countries that routinely turn a blind eye to North Korea’s illicit activities. These include several countries in the Middle East, as well as Singapore, China, Indonesia, and Malaysia. Pyongyang maintains an extensive network of front companies in these countries, says Snyder, with the main purpose of enabling it to evade international sanctions against it.
Malaysia has been a primary hub of North Korean illicit activity. In that, Pyongyang has been crucially assisted by the fact that —until last week— North Korean citizens could travel to Malaysia without entry visas. Malaysia thus provides a useful base for dozens of North Korean front companies, such as Glocom, which ostensibly markets radio communications equipment, or Pan Systems Pyongyang, which just happens to trade in exactly the kind of commercial items that could be described as “dual-use goods” in UN sanctions resolutions. Pan Systems is connected to several Malaysian-based subsidiaries, including International Global Systems and International Golden Services, which, according to investigators, are operated by North Korean intelligence.
Many of these companies also serve as exporting and importing hubs for Pyongyang. In the last five years, several ships have been intercepted while carrying illicit cargo dispatched from North Korea or destined for the reclusive state. In one such instance in 2013, the Jie Shun, a Cambodian-registered ship with a North Korean crew, was found to be carrying over 30,000 rocket propelled grenades hidden under thousands of tons of iron ore. The shipment was intended for an “undisclosed Middle Eastern destination”, says Snyder and was traced to a firm called “Dalian Haoda Petroleum Chemical Company Ltd.”. Many of these mysterious firms are headquartered in China, registered in Hong Kong, but actually work on behalf of North Korea, often using banking facilities in Europe and the United States to conduct financial transactions.
► Author: Joseph Fitsanakis | Date: 07 March 2017 | Permalink