Category Archives: Analysis

North Korea’s Proliferation & Illicit Procurement Apparatus within China

North Korea’s development of weapons of mass destruction, missile delivery systems and conventional military equipment continues despite ever increasing international sanctions. It is known that North Korea relies upon trade in and through China to bypass sanctions. A key knowledge gap relates to what apparatus North Korea maintains in China, especially the border region, to facilitate this. An initial study by King’s College London identified a number of findings:

  • The presence of extensive procurement networks in the Chinese border regions are significant to both North Korea’s economy and support to its military-related programmes, including WMD.
  • It is assessed that North Korea employs a covert system in its attempts to prevent the activities between North Korea-based entities and suppliers being identified.
  • The majority of those entities identified in the China border regions were located in Dandong, although significant numbers were also identified in Dalian and Shenyang. The research to date also found potential presence of North Korean-associated companies in other locations within the Chinese border provinces.
  • Within the cities of Dandong, Dalian and Shenyang many of the entities were found to be collocated suggesting centres for North Korean-related trade, and close proximity to logistic centres.
  • The nationality of the majority of people identified and associated with the entities in this report are assessed to fall into three basic categories;
    • Chinese (citizens) business people who trade with North Korean.
    • Ethnic Koreans of which there are over 2 million who are Chinese citizens living in the border provinces of Jilin, Liaoning and Heilongjiang.
    • North Korean persons living and/or working in the border regions within China.
  • From open source information this study has identified a large number of networks/groups that North Korea could potentially use in support of proliferation-related procurement. However, this is considered to be only part of the potential number of entities that exist.
  • Most of the entities/companies included in international sanctions lists are based in North Korea. So far, of the entities and people identified in this study only two appear in any sanctions list, these being;
    • Korea Ryonha Machinery Joint Venture Corporation (UNSCR 1718)
    • Dandong Hongxiang Industrial Development Company Ltd. (US)
  • A number of companies and individuals identified have been included in UNSCR 1718 PoE reports with the assertion that they have aided North Korean proliferation activity, but have not been included in any sanctions list.

Although this initial study has not identified any new policy recommendations, it has shown that the extent of the problem is potentially far greater than many have previously considered. To have effective sanctions against North Korean proliferation activity cooperation with, and support to, Chinese authorities should be considered.

North Korean Scientists – Chemical and Biological Weapons Programmes

Many consider the North Korean ideology of Juche (self-reliance) to include science and technology as one of its three priority pillars alongside ideology and the military. Given its prominence, in the late 1990’s the DPRK formulated a plan for science and technology development that included investment and scientific exchanges with foreign countries. North Korea continues to be one of the most closed nations, and acquiring information relating to scientists and their work is no exception.  Some technological fields, such as nuclear and military arms technology are considered to be relatively well advanced, but very little is understood regarding any current chemical and biological weapons programmes.

The study by King’s College London aimed to identify where possible scientists that have been recognised through awards and honours for their work in support of North Korea’s ideology and objectives. Specifically those that may be involved in or have conducted research work in support of the DPRK’s suspected chemical and/or biological weapons programmes. Analysis was also conducted in an attempt to identify persons that worked at entities and/or locations suspected of being involved in chemical and/or biological weapons programmes. The findings included;

  • The Order of Kim Il-sung is the highest order of North Korea, along with the Order of Kim Jong-il. Recipients can be individuals or organizations, who have contributed “outstanding services to the Republic of the Korean nation and communism”.
  • The People’s Scientist is an award by the People’s Prize Awarding Commission that works directly under the Cabinet of North Korea.
  • The names of some of the recipients are available but in many cases details of their role, profession and parent organisation are not reported.
  • The overwhelming trend is not to name scientists associated to nuclear or missile-related programmes who have received awards.
  • According to a study by ScienceCentral, analysis of publications from North Korea indexed in the Web of Science Core Collection found 318 articles from North Korea mostly in collaboration with other countries. The study also identified that most research results by North Korean researchers have been published in journals in North Korea.
  • Analysis of data acquired by KCL of over 29,000 papers published in North Korea identified a total of 33 of potential interest. 24 were identified against a list of key terms and a further 9 were identified as topics of potential interest.
  • In most cases there was no additional information about the authors of these papers, or their parent organisations.
  • Entity/location analysis of data extracted from open source websites has identified approximately 1200 people linked to entities or locations that are of possible concern. Of those identified, some are award recipients.
  • Due to its dual use applications chemical and biological research, development and production those involved are possibly more likely to have some public recognition.

North Korea: 2016 in review and the challenges of 2017

By Ian K. Bolton, Research Associate Interdictions and PSI (ian.bolton@kcl.ac.uk)

2016 was an exceptionally busy year for the world of counter-proliferation (CP); in January, Implementation Day of the Joint Comprehensive Plan of Action with Iran was reached. By November, the United Nations’ First Committee voted to begin negotiations in 2017 on a global legally binding instrument to prohibit nuclear weapons for all countries. However, it was North Korean events which were the most dramatic.

On 6 January 2016, North Korea conducted its fourth nuclear test, with a yield believed to be in the region of 10 kilotons[1]. The nuclear test was widely condemned; notably China seemed to be genuinely angered by the test[2]. Before the world had been able to respond through the United Nations, North Korea escalated matters. On 7 February, North Korea confirmed it had launched a long-range rocket from its Sohae site, claiming the rocket was carrying a satellite for its space program. However under Security Council resolutions, North Korea is prohibited from conducting any such activity which is contributing to their ballistic missile programme.

The International Community delivered its response to the January nuclear test on 2 March, passing a new UN Security Council Resolution – UNSCR 2270. This resolution created one of the most wide‑ranging sanctions regimes against North Korea in the UN’s history. The restrictions adopted under UNSCR 2270 are broad and include entire sectors, such as coal and iron ore. The exception to these restrictions were when they would impact on the livelihoods of North Korean nationals. UNSCR 2270 also introduced an obligation on UN Member States to inspect all cargoes originating in, or destined for, North Korea.

Before the ink of UNSCR 2270 was dry, North Korea was once again challenging the resolve of the International Community. On 15 April, they tested the Musudan Intermediate Range Ballistic Missile. Although the test was seen by the CP community as having failed, this was indicative of things to come. On 23 April, North Korea tested a Submarine Launched Ballistic Missile[3]. By the end of August there been 7 further ballistic missile tests, ranging in their success. One North Korean watcher described this pattern of testing as Mr. Kim having ‘missile lust’, and not giving up on efforts to develop them further[4].

The next significant provocation came on 9 September when the regime conducted their fifth and largest‑to‑date nuclear test[5]. The test sparked international condemnation and heightened tensions across the region, with the US conducting an overflight of South Korea by two US B-1B Strategic Bombers. Once again the International Community looked to take decisive action. On 30 November 2016, the UN Security Council passed a new resolution, UNSCR 2321, which built on UNSCR 2270.

Adopted unanimously by the UN Security Council, resolution UNSCR 2321 tightened even further the sanctions and controls on North Korea[6]. The new resolution looked to address some of the issues which had come to light in the aftermath of UNSCR 2270, such as easy work-arounds on sectoral sanctions. New restrictions were put in place on mineral sectors, including copper, nickel, silver and zinc. The amount of coal North Korea could export was also restricted to defined amounts. It introduced restrictions on North Korean workers based overseas, as well as the provision of statues from North Korea. Additionally the UNSCR raised concerns about the activities of North Korean diplomatic missions and holdings and how these could be misused. All in all UNSCR 2270 and UNSCR 2321 together have created one of the most extensive UN sanctions regimes ever to be passed.

Challenges in 2017

It is clear that international condemnation, pressure and sanctions have not deterred North Korea from carrying out further provocations. Proof of this can be seen in the ballistic missile test that took place yesterday, 12 February 2017. The successful testing of the Pukguksong-2 missile will be an early test of the International Community’s resolve and ability to respond. Indeed satellite imagery and evidence[7] suggests North Korea has restarted its nuclear reactor at Yongbyon, the reactor used to produce plutonium for North Korea’s nuclear weapons programme[8]. This action would seem to indicate North Korea is preparing to conduct further nuclear tests.

The Trump administration has been sabre rattling in the region, both during the recent visit by Defence Secretary Mattis[9], in President Trump’s tweets[10], and during the visit of the Japanese Prime Minister. The critical question is what will the International Community, and the Trump administration, do in response to further provocations? It is hard to see what further scope there is for tightening sanctions on North Korea, and were such tightening to be suggested there would be concern regarding the humanitarian impact, a key concern for many countries, including Russia and China. Trump has already pointed the finger at China for failing to control North Korea[11], but traditionally China has resisted pressure to tighten its sanctions implementation. Given the antagonistic relationship between Trump and China so far, the US may undertake some form of unilateral military action against North Korea, though highly unlikely. Apart from further sanctions and possible military action, the best hope for a change in direction is the potential restarting of 6-party talks; the US administration has said they are willing to talk to North Korea. In practice it is difficult to see what this could accomplish, but the same was said by many before the start of Iran talks.

Another key challenge in 2017 will be the full implementation of both UNSCRs 2270 and 2321. UNSCR 2321 followed so quickly on the heels of UNSCR 2270 that many countries have not yet fully implemented UNSCR 2270, and as such have not submitted implementation reports to the UN as set out in the resolution[12]. Individual national legislation will need to be adopted by many in order to enforce the sanctions. This legislation will need to give countries powers to seize vessels and cargoes as prescribed by the UNSCRs. Countries will need legislation and capacity to allow all cargoes going to, or originating in, North Korea to be inspected. Furthermore, countries will need to ensure they can inspect cargo travelling via land and rail transportation, as well as sea and air, an often overlooked area. For many countries, especially in South East Asia given the high traffic of North Korean activity, there may be a need to dramatically increase customs enforcement capacity. Countries will need to be able to enforce the sectoral controls introduced by the UNSCRs, this will include an ability to analyse and identify what materials/ores they may be dealing with and if they are sanctioned.

Even more complicated will be how restrictions on coal, which essentially provides export limits, will actually be enforced, especially by China, North Korea’s biggest coal customer. North Korea watchers are already pointing out the potential frailties of this[13]. Domestic ship, registries, agents, insurers and companies will need to be looked at to ensure they are not misused by North Koreans. Countries will also need to examine their ship registries to de-list North Korean owned, operated or controlled vessels. Countries will need to take action to prevent public and private financial support to North Korea by persons or entities within their jurisdiction, unless by prior approval of the UN North Korean Sanctions Committee. And all of this is just a snapshot of the many new obligations and capacities countries will have to undertake.

Given this huge implementation challenge, the international community, and in particular countries like the US and UK, along with institutions, such as the European Union and United Nations, must have a focus on providing critical assistance to other countries, especially those with limited enforcement capacity. It is this that really will be the biggest challenge of 2017. Without this, having extensive and wide ranging sanctions on North Korea is worthless.

[1] http://www.bgr.bund.de/DE/Gemeinsames/Oeffentlichkeitsarbeit/Pressemitteilungen/BGR/bgr-160909_nordkorea_BGR_kernwaffentest.html?nn=1542132

[2] http://www.telegraph.co.uk/news/worldnews/asia/northkorea/12084087/North-Korea-hydrogen-bomb-Kim-Jong-un-earthquake-live.html

[3] http://edition.cnn.com/2016/04/23/asia/north-korea-launches-missile-from-submarine/

[4] Thomas Karako, director of the Missile Defense Project at the Center for Strategic and International Studies, told Business Insider: http://uk.businessinsider.com/timeline-of-north-korea-tests-2016-10?r=US&IR=T/#february-7-the-rogue-regime-fires-a-long-range-rocket-2.

[5] https://www.nytimes.com/2016/09/10/world/asia/north-korea-nuclear-weapons-tests.html?_r=0

[6] https://www.un.org/press/en/2016/sc12603.doc.htm

[7] https://www.theguardian.com/world/2017/jan/28/north-korea-has-restarted-reactor-to-make-plutonium-fresh-images-suggest

[8] http://38north.org/2017/01/yongbyon012717/

[9] http://www.bbc.co.uk/news/world-asia-38824008

[10] https://twitter.com/realdonaldtrump/status/816057920223846400?lang=en

[11] https://twitter.com/realDonaldTrump/status/816068355555815424

[12] Currently just over 60 countries have completed implementation reports of UNSCR2270 as evidence on the UN website: https://www.un.org/sc/suborg/en/sanctions/1718/implementation-reports.

[13] http://38north.org/2016/12/aberger121616/

Study of WMD Proliferation Financing Typologies: Interim Report

A Report by Dr Jonathan Brewer

finance

Illustration credit: Jason Robinson—originally published in the ACAMS Today magazine, a publication of the Association of Certified Anti-Money Laundering Specialists (ACAMS).

Combating the proliferation of weapons of mass destruction is a key priority for the international community. One of the tools for doing this is disruption of the networks used to finance proliferation. However, detecting financing of proliferation (FoP) is difficult and requires a better understanding of the typologies.

The most comprehensive study of FoP to date was published by the Financial Action Task Force (FATF) in 2008. Since then, largely due to sanctions on Iran and DPRK, more information on FoP has become available. The King’s College Study of Typologies of Financing of Proliferation is collecting and analyzing information held by governments and the banking and financial sector in order to publish reports on current FoP typologies. Additional indicators identified by this report could possibly be visible to banks and financial institutions that may be unknowingly involved in processing related transactions.

This Interim Report comprises analyses of 18 case studies, based on information supplied to the Study to date, contained in reports of UN Panels on Iran and DPRK, and in documents relating to a small selection of US Department of Justice actions.

The King’s College London Study will continue to collect and analyse data on FoP from governments and the private sector, and will publish a final report in July 2017.

The study is accessible below:

Study of Typologies of Financing of Proliferation Interim Report 5 Feb 2017

New Alpha Report: Examining intangible technology controls

itt(Source: ICFITT)

by Ian Stewart, with contributions from Dominic Williams and Nick Gillard

Project Alpha is today releasing a report on Intangible Technology Controls (ITT), examining the utility of ITT in managing the spread of proliferation-relevant technologies. Continue reading New Alpha Report: Examining intangible technology controls

New Alpha case study: examining allegations that Pakistan supplied nuclear-related goods to the DPRK

A series of allegations made in June has re-awakened the issue of Pakistani nuclear cooperation with North Korea. These allegations, published by an Indian news agency, state that Pakistani authorities have continued to supply nuclear-related material to North Korea, in violation of sanctions.

Project Alpha sought to substantiate or otherwise the allegations utilising open source information. The purpose of this case study is to set out what steps were taken and what information was validated such that follow-on study might be undertaken, should further information become available that could allow a conclusion to be drawn about the validity of the allegations.

The report can be downloaded from the link below:

20160803_-_dprk_pak_allegation_case_study_-_project_alpha

Ship tracking and sanctions compliance in light of UNSCR 2270

The adoption of UNSC Resolution 2270 on 2 March 2016 imposing additional sanctions on the Democratic People’s Republic of Korea (DPRK) in response to its fourth nuclear test and illicit use of ballistic missile technology earlier this year has seen the introduction of unprecedented inspection and financial provisions into the sanctions, thus considerably broadening the scope of the West’s existing restrictive measures against Pyongyang. Continue reading Ship tracking and sanctions compliance in light of UNSCR 2270