Seizure of Egypt-bound ship reveals North Korea’s illicit trade in arms

Suez CanalThe seizure earlier this year of a North Korean ship secretly carrying thousands of weapons for use by the Egyptian military has revealed the scale of one of Pyongyang’s most profitable money-making ventures: global arms sales. Experts say that the North Korean state continues to supply thousands of tons of Cold-War-era conventional weapons to countries such as Eritrea, Cuba, Burma and Iran, as well as to some American allies, including as Egypt. There is also evidence that at least two non-state militant organizations, including the Lebanon-based group Hezbollah, are among Pyongyang’s customers. The latter take advantage of North Korea’s vast arsenal of weapons produced in the 1960s and 1970s, which are being sold on the international arms market at very low prices.

The Washington Post’s Joby Warrick reports that, in August of this year, American intelligence officials notified authorities in Egypt of a potentially suspicious transport ship named Jie Shun. The ship had been registered in Cambodia and was flying the Cambodian flag. However, its entire crew was North Korean and it had last sailed from North Korea, bound for Egypt. Its manifest said it carried hundreds of tons of iron ore. Acting on the tip from the United States, armed Egyptian customs officers boarded the ship as soon as it entered the Suez Canal. Upon inspecting the Jie Shun, the Egyptians found hidden 30,000 rocket-propelled grenades. The discovery was later described by the United Nations as “the largest seizure of ammunition in the history of sanctions against the Democratic People’s Republic of Korea”.

Remarkably, says Warrick, the ammunition had been purchased in secret by a consortium of Egyptian businessmen, who had hoped to resell it to the Egyptian military. It is believed that the businessmen had paid in excess of $23 million for the illicit cargo, with the money ending up in the coffers of the North Korean government. The ship’s North Korean origin had been completely hidden through its “flag of convenience” registration in Cambodia, which allowed the ship’s owners to claim that the its home port was in the Southeast Asian country. According to Warrick, who cites unnamed US officials, the discovery of the Jie Shun’s illicit cargo contributed to the recent decision of US President Donald Trump to hold back on approximately $300 million in military aid to Egypt that Washington had planned to give to Cairo in July.

Author: Joseph Fitsanakis | Date: 03 October 2017 | Permalink

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Emiratis, Saudis, secretly assisting Libyan rebels with air power, says UN

Khalifa HaftarSecret military assistance from the United Arab Emirates and Saudi Arabia, which violates United Nations sanctions, is helping Libya’s eastern-based rebels prevail in the civil war there, according to a new report. Libya has remained in a state of anarchy since 2011, when a popular uprising backed by the West and its allies led to the demise of the country’s dictator, Muammar Gaddafi. Currently the strongest faction in the post-2011 Libyan Civil War is the eastern-based Tobruk-led Government, which is affiliated with the Libyan National Army (LNA). The commander of the LNA is Field Marshal Khalifa Haftar, an old adversary of Colonel Gaddafi, who lived in the US under Washington’s protection for several decades before returning to Libya in 2011.

The Tobruk-led Government is ostensibly supported by the United States, but has also received Russian assistance. The status of the group is further-complicated by the fact that, in recent years, its military wing, led by Haftar, operates semi-autonomously. Some believe that Haftar has now stopped taking orders from Tobruk and has aspirations to lead his own armed faction in Libya.

In February of 2011, shortly after the popular uprising erupted in Libya, the UN Security Council adopted Resolution 1970, which —among other things— forbids the export of war materiel to Libya. The resolution was further-strengthened in 2014 and today remains in place. But the UN embargo did not appear to stop the military domination of Haftar’s LNA. In the past few months, the armed group has managed to extend its control over dozens of urban centers, oil installations and military bases and outposts throughout eastern and central Libya. Today, the LNA is seen as the dominant military authority in the war-torn country.

Now a new report published by the UN suggests that the main reason for the LNA’s military prowess lies in the secret support it receives from the United Arab Emirates and Saudi Arabia. The report was published on Friday by the “Security Council Committee established pursuant to resolution 1970”, a panel of experts appointed by the UN to oversee the implementation of the arms embargo. In its annual report, the panel asserts that Haftar’s forces received significant military assistance from the UAE in both ground and aerial support. Specifically, the LNA received nearly 650 armored and non-armored vehicles in April of 2016 alone, as well as helicopters and unmanned drones. The latter are now stationed the Al-Khadim air base, which was built by the LNA specifically in order to house the UAE-supplied aircraft. It is believed that the UAE operates the Al-Khadim air base, which is located approximately 60 miles east of Benghazi, Libya’s second most populous urban center.

The UN report goes on to state that much of the war materiel reaches Libya through ships that sail from Saudi Arabia, and that some Belarus-based companies are also involved in the illicit transfer of helicopters, non-armored vehicles and other items to Libya. It concludes that the materiel assistance provided by the UAE has “significantly increased the air support available to the LNA”, which in turn explains the group’s impressive military performance in the past year. The report’s authors noted that they contacted the government of the UAE in regards to the report’s findings, but received no response.

Author: Joseph Fitsanakis | Date: 12 June 2017 | Permalink

Malaysia assassination highlights North Korea’s network of front companies

North KoreaThe 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

Notorious Russian arms dealer ‘refused US offer for lighter sentence’

Viktor BoutThe wife of Viktor Bout, the imprisoned Russian arms dealer dubbed ‘the merchant of death’, said he rejected an offer by his American captors who asked him to testify against a senior Russian government official. Born in Soviet Tajikistan, Bout was a former translator for the Soviet military. After the end of the Cold War, he set up several low-profile international air transport companies and used them to transfer large shipments of weapons that fueled wars in Africa, Asia, Latin America and Europe. He made millions in the process and acquired international notoriety, which inspired the Hollywood blockbuster Lord of War. But his business ventures ceased in 2008, when he was arrested in Bangkok, Thailand, by the United States Drug Enforcement Administration, with the cooperation of the Royal Thai Police. He was eventually extradited to the US and given a 25-year prison term for supplying weapons to the Afghan Taliban, and for trying to sell arms to the Revolutionary Armed Forces of Colombia (FARC). Bout is currently serving his sentence at the Brooklyn Metropolitan Detention Center in New York.

In a newspaper interview on Tuesday, Bout’s wife, Alla Bout, said her husband could have gotten away with a considerably lighter sentence had he agreed to testify against a senior Russian government official. Speaking to Moscow-based daily Izvestia, Alla Bout said her husband had been approached by American authorities after being extradited to the United States from Thailand. He was told that US authorities wanted him to testify against Igor Sechin, a powerful Russian government official, whom American prosecutors believed was Bout’s boss. In return for his testimony, US prosecutors allegedly promised a jail sentence that would not exceed two years, as well as political asylum for him and his family following his release from prison. Alla Bout added that her husband’s American lawyers were told by the prosecution that the ‘merchant of death’ “would be able to live in the US comfortably, along with his wife and daughter”, and that his family could stay in America during his trial “under conditions”. Alla Bout claimed she was told this by Bout himself and by members of his American legal team.

From 2008 to 2012, Sechin, who has military background, served as Russia’s Deputy Prime Minister. Today he heads the Board of Directors of Rosneft, a government-owned oil extraction and refinement company, which is considered one of the world’s most powerful business ventures. Many observers see Sechin as the most formidable man in Russia after Russian President Vladimir Putin. He is also believed to be a senior member of the Siloviki, a secretive group of government officials in the Putin government who have prior careers in national security or intelligence. Although Bout and Sechin have never acknowledged having met each other, some investigators of Bout’s weapons-trading activities believe that the two were close allies. It is believed that the two men first met in Angola and Mozambique in the 1980s, where they were stationed while serving in the Soviet military. But the two men deny they knowing each other. According to Alla Bout, Viktor told his American captors that he “never worked for Sechin and did not know him in person”. He therefore turned down the prosecution’s offer and was handed a 25-year sentence. When asked by the Izvestia reporters whether Bout was simply protecting the powerful Russian government official, Alla Bout insisted that the two “have never even met, not once”.

Author: Joseph Fitsanakis | Date: 10 August 2016 | Permalink

Countries using Eastern Europe to flood Syria with weapons, study finds

AK-47Unprecedented quantities of weapons and ammunition worth in nearly $1.5 billion have been procured from Eastern Europe and sent to Syria to arm nearly every side in the ongoing civil war, a study has found. The weapons are transported through the Balkans and sold legally to countries bordering Syria, including Jordan, Saudi Arabia and Turkey. Once there, they are secretly transported to Syria for use in the bloody five-year civil war, which has so far killed or displaced millions. The revelation resulted from a year-long investigative project by the Serbia-based Balkan Investigative Reporting Network (BIRN) in the Organised Crime and Corruption Reporting Project (OCCRP) in Bosnia.

The probe found that the weapons transferred to the Middle East include heavy machine guns, rocket and mortar launchers and shells, anti-tank weapons, as well as thousands of assault rifles and rounds of ammunition. Many originate from Ukraine, Belarus and the former Yugoslavia and are procured by companies in eight Eastern European countries including Bulgaria, Slovakia, Romania, the Czech Republic, Montenegro, and Bosnia. The governments of these countries give the companies permission to sell weapons to Middle Eastern countries, even though it is informally understood that they will eventually end up in Syria, in contravention of international agreements.

Investigators say the smuggled weapons have been traced to various factions fighting in Syria, primarily the Free Syrian Army, which is fighting against the government of Syrian President Bashar al-Assad. But many have ended up in the hands of Islamist militias, including the Islamic State, Ansar al-Islam, and the group formerly known as Jabhat al-Nusra. Some of the weapons have also surfaced in Yemen, in the hands of Sunni fighters there. According to the probe’s findings, Middle Eastern countries like Turkey, Jordan or Saudi Arabia, whose militaries use Western-made weaponry, were never large purchasers of Eastern European weapons. But that quickly changed in 2012, as the Syrian Civil War picked up pace.

According to British newspaper The Guardian, which published some of the findings of the BIRN-OCCRP report, the United States has used this weapons-smuggling channel as a way to arm Syrian opposition forces. The study found that, since December of last year, the US military’s Joint Special Operations Command has commissioned at least three cargo ships that left ports in the Black Sea for the Middle East carrying weapons for Syria. Regular intelNews readers will remember a report from November 2013, according to which the Greek authorities seized a ship that had left Ukraine heading for Syria or Libya, carrying 20,000 AK-47s, as well as explosives and ammunition. Two years later, in November 2015, we reported on allegations that Ukraine may be secretly arming the Islamic State in an effort to impair its regional foe, Russia.

Author: Joseph Fitsanakis | Date: 29 July 2016 | Permalink

Italian mafia may be supplying weapons to ISIS, say investigators

AK-47Organized criminal groups in southern Italy may be supplying assault weapons to groups and individuals that are associated with the Islamic State, according to European investigators. British newspaper The Guardian said last week that security officials in Italy, Britain, and elsewhere in Europe have traced weapons used by Islamists to at least one arms cache that entered the European black market through a Sicilian crime family with links to the mafia.

According to The Guardian, the initial link to the supply of weapons seems to originate with an organized criminal family in Catania, on Sicily’s eastern coast. The family, known locally as the “Ceusi”, is part of the “Santopaula” clan, which is the dominant criminal network in that part of Italy. Investigators have confirmed that two years ago the Ceusi family purchased a cache of 160 deactivated AK-47s from AFG Security Corporation, a Slovakia-based European weapons dealer. The purchase of the weapons, for $40,000, was legal. But the Sicilian mafia then illegally reactivated the weapons by removing the deactivating metal pins that had been inserted into the weapons’ barrels. The reactivated weapons were then supplied to the ’Ndrangheta, the Italian organized crime network that operates in the region of Calabria, in the Italian mainland. In turn, the ’Ndrangheta, which specializes in the trafficking of contraband to and from Europe, sold many of these reactivated weapons to a smuggling ring headquartered in the Egyptian port of Alexandria.

It was the Egyptian network, say investigators, that sold the AK-47s to Islamist militants in Egypt’s Sinai Peninsula, who have close connections with the Islamic State in Syria and other Islamist groups. A few of the weapons even ended up in the hands of European Islamists in France and elsewhere. Much of the intelligence regarding the AK-47s comes from telephone intercepts, said The Guaridan. But the newspaper cautioned that concrete links between the Mafia and the Islamic State have not yet been established. Nevertheless, the paper said that, according to European investigators, “organized criminals are increasingly open to trading with extremists”, and there are mounting “signs of an even closer relationship between organized criminals and Islamists” operating in North Africa and the Middle East.

Author: Joseph Fitsanakis | Date: 26 July 2016 | Permalink

France seizes ship with ‘hundreds of weapons’ heading for Yemen

Combined Maritime ForcesThe United States says a ship carrying hundreds of weapons, which was captured by the French Navy in the Indian Ocean, originated from Iran, and that the cargo was destined for Yemeni rebels through Somalia. The ship was seized on March 20 by a French warship patrolling the Indian Ocean as part of the Combined Maritime Forces (CMF). The CMF is a multinational naval fleet that aims to implement United Nations sanctions on Somalia. The sanctions are designed to frustrate the activities of al-Shabaab, an al-Qaeda-linked Somali militant group, and to put an end to maritime piracy in the Horn of Africa.

The ship carrying the weapons is believed to have been initially spotted by a French helicopter that was conducting surveillance flights in support of CMF’s mission. Soon after boarding the ship, French forces discovered large amounts of weaponry. A statement posted on the CMF website said that the ship was found to be carrying “several hundred AK47 assault rifles, machine guns and anti-tank weapons”. The French Ministry of Defense said that the vessel was not registered to any country and that the crew of 10 was multinational. All crew members were released after being questioned by their French captors.

An assessment of the ship’s capture by the US Department of Defense states that the arms shipment probably originated in Iran and that it was heading to Somalia. However, the most likely final destination of the cargo was not al-Shabaab, but Houthi rebels in Yemen. Iran is known to be supporting and funding Houthi rebels, who are Shiite and are fighting a bitter civil war against the country’s Saudi-supported Sunni government.

It is worth noting that the recent capture of the unregistered vessel is the third such seizure of a large cache of weapons heading for Yemen through Somalia since September. In the previous most recent case, an Australian Navy ship sailing off the coast of Oman intercepted a large cache of weapons being transported to Yemen. US sources speculated that the intercepted ship originated from Iran and was heading to Yemen.

Author: Ian Allen | Date: 31 March 2016 | Permalink