Archive for the ‘North Korea Sanctions’ Category


Nov

19

What Happens in Panama Stays in Panama (including 200,000 bags of brown sugar)


Posted by at 7:08 pm on November 19, 2013
Category: Cuba SanctionsEconomic SanctionsNorth Korea SanctionsSanctionsU.N. Sanctions

By jonprc (Flickr: north korean ship) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3ANorth_korean_ship.jpg

We reported last July on Panama’s seizure of the North Korean vessel Chong Chon Gang sailing from Cuba to North Korea and carrying, among other things, disassembled Soviet-era MIG jets and missiles hidden in 200,000 bags of brown sugar. Cuba claimed it was sending these items to North Korea “for repair.” As was reported at the time, the North Korean crew tried to fend off Panamanian boarders with sticks while the vessel’s captain initially claimed to have a heart attack and subsequently attempted suicide.  The entire ordeal resulted in the rare Cuba-Panama-North Korea diplomatic tiff.  While we explained in July the UN sanctions against North Korea that were implicated, recent developments also provide telling aspects of U.S. sanctions policy against Cuba.

The United States has remained notably close-lipped and little has developed in almost four months since the seizure until this last week.  On Wednesday, the Panamanian foreign minister was in Washington and was thanked by Secretary Kerry for Panama’s “very important interdiction of a North Korean ship with illicit cargo.”  According to Panamanian media, the Panamanian foreign minister announced on Friday that Panama has granted visas to a North Korean delegation to come to Panama this week to claim the Chong Chon Gang and most of its crew.   The captain, two senior officers, the disassembled weaponry and the brown sugar will not be released.  Finally, Vice President Biden arrived yesterday in Panama to tour expansion sites of the Canal.

The upshot of the entire incident is that the United States got the best promotion of sanctions against Cuba it could have asked for.  Panama was the one who exposed Cuba engaging in concealed international arms trafficking with North Korea.  The United States, as a result, was not thrust into a position to defend an embargo unsupported by most of  its allies, but rather could let Cuba be scolded by another Latin American country.

The United States, of course, most likely played critical behind-the-scenes intelligence and direction related to the seizure, and the recent diplomatic visits between the two countries are reminders that Panama relies heavily on U.S. support and, therefore, would be willing to comply with the occasional Soviet-era arms seizure at the behest of the United States.  Perhaps not coincidentally, the North Korean crew have been detained at Fort Sherman, a former U.S. military base on the Atlantic side of the Canal.

While Iran takes current front page news on U.S. sanctions policy, the activities onboard the Chong Chon Gang is a singular example of why the United States is not inclined to ease sanctions meaningfully against Cuba soon and will use this episode as support that sanctions should remain as is.

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Copyright © 2013 Clif Burns. All Rights Reserved.
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Jul

30

That’s Why It’s Called Dirt


Posted by at 9:24 pm on July 30, 2013
Category: BISNorth Korea SanctionsOFAC

Kim Jong Un Official Photo Source: Korean Central News Agency [fair use]As the result of an FOIA request, the Office of Foreign Asset Controls (“OFAC”) released a pile of requests by U.S. citizens to import all kinds of things from North Korea, including beer, printer cartridges, children’s shoes, blue jeans (!!), columbite, and collectible postage stamps. You can’t help but being intrigued by the concept of importing blue jeans from Pyongyang, that international capital of haute couture best exemplified by the pudgy fashion plate who is the titular ruler of the country.

But more entertaining than picturing what exactly Nork jeans would look like is a singularly clueless article  on the license requests that ran on the aptly named website TechDirt, which apparently dispenses its “dirt” on the tech scene without actually knowing anything or doing any research. The author of the TechDirt post, one Mike Masnick, is all befuddled over requests by several law firms for permission to take steps to register trademarks in North Korea. Masnick sees these requests as just an example of law firms trying to gouge their clients for performing pointless services.

Case in point, he says, was the request by the lawyers by Intel to register its trademarks in North Korea

[W]hy does Intel care about protecting its trademarks in North Korea when it can’t sell its chips into North Korea in the first place?

Hello, Mike, does Google still work on your computer? Obviously not, or you would have easily found this. Exports to North Korea aren’t banned but merely require licenses from the Bureau of Industry and Security (“BIS”). In the case of consumer grade computer chips, license requests are considered on a case-by-case basis. Also, Intel products with less than 10 percent U.S.-origin content could be sold in North Korea without licenses under BIS’s de minimis rules. But, let’s suppose, for the sake of argument, that Intel couldn’t sell anything at all in North Korea, it still might want trademark protection there to prevent other people from outside the United States from selling products in North Korea under that name.

As a bit of background, the real reason for the requests by law firms to help register trademarks in North Korea stems from a curious inconsistency in OFAC’s sanctions regulations. In most if not all of the other sanctions regimes, including those for Cuba and Iran, there are specific provisions permitting registration and protection of trademarks in the sanctioned countries. For reasons that are not clear, the North Korea regulations do not include this exception, hence the request. Whether OFAC granted these requests or not is not revealed by the FOIA documents but I’m fairly certain that the requests would have been granted.

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Copyright © 2013 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jul

17

Nork Arms Seized in Panama Canal


Posted by at 9:49 pm on July 17, 2013
Category: Arms ExportNorth Korea SanctionsU.N. Sanctions

Kim Jong Un Official Photo Source: Korean Central News Agency [fair use]You have no doubt read about an inspection of a North Korean vessel by Panama in the Panama Canal that revealed that the ship was transporting missile parts and systems. Apparently among the items seized by Panama were a SNR-75 “Fan Song” fire control radar for the SA-2 family of surface-to-air missiles. These were built by the Soviets in the mid-1950s and are used to guide missiles to their targets. The Cubans assert that they own these items and are sending them to North Korea for repair.

Given that the items were hidden under bags of sugar and that they ship’s captain tried to commit suicide in the course of the Panamanian search, the question as to whether this shipment violates U.N. sanctions seems to be mostly academic. Security Council Resolution 1718, in sections 8(a) and (b), prohibits the “transfer to” the DPRK, or export from the DPRK, the listed arms and materiel. Of course, if these items are indeed going to the Norks for repair and return, this may not be a transfer of the items to the DPRK and they will not yet have been exported by the DPRK. However, section 8(c) prohibits the transfer of services to or from the DPRK related to the use of the listed arms and materiel, which seems to be the provision most arguably implicated by the shipment at issue.

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Mar

29

Apple’s Newest Fanboi?


Posted by at 2:39 pm on March 29, 2013
Category: BISNorth Korea Sanctions

Photo By Korean Central News Agency (derivative work; fair use)

Well, well, well.   It seems that North Korea’s well-fed Dear Leader is planning his attack on the United States mainland using a 21.5 inch aluminum unibody iMac.  Or perhaps he just uses it to play Call of Duty Mac Edition in between snacks and drawing pictures.  It’s hard to tell.

But, you may ask, what’s he doing with an iMac?  Don’t we have laws against that? Yes, we do. Currently, exports to North Korea of all items other than food and medicine classified as EAR99 require a license from the Bureau of Industry and Security (“BIS”). An iMac is classified as ECCN 5A992. Under EAR § 742.19(b)(vii), licenses to export 5A992 items to North Korea are subject to a general policy of denial, so I think we can reasonably assume that no license was issued by BIS to export the iMac to our Dear Leader.

So where did he get it? Um, where do you think? China, probably..

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Mar

7

No Bling For Norks


Posted by at 8:45 pm on March 7, 2013
Category: North Korea Sanctions

Kim Jong Un Official Photo - Fair UseOn the heels of North Korea’s nuclear test, the U.N. agreed today to a new round of sanctions on the rogue state. Those sanctions, however, are mostly incremental and far from comprehensive.

The financial sanctions block the assets of a handful of individuals and entities. They also prohibit North Korean banks from opening new branches in member countries. North Korean banks are forbidden from joint ventures with, or ownership interests in, banks in member states but only if the member state believes that these ventures or interests could contribute to North Korea’s nuclear or missile programs. An absolute prohibition is imposed on bulk cash transfers to North Korea.

New inspection measures are also imposed. Member states are directed to detain and inspect cargo to and from North Korea if there is reason to believe that the cargo contains items prohibited under these new sanctions or previous sanctions. Among the prohibited items added by the new sanctions are perfluorinated lubricants, certain valves useful in uranium enrichment, and control and measurement equipment for wind tunnels.

The new sanctions also include prohibitions of export to North Korea of sodium perchlorate. That chemical is not particularly useful as a propellant because of its tendency to absorb moisture. As such, it is not specifically listed on the Missile Technology Control Regime. However, it is apparently useful as a precusor to ammonium perchlorate, which is more interesting as a propellant and which is listed on the MTCR.

Of course, no sanctions on North Korea would be complete without tossing in prohibitions on a few more luxury goods. The new sanctions clarify that prohibited luxury items include precious and semi-precious stones (such as diamonds, sapphires and rubies), jewelry with pearls, yachts and racing cars.

My guess is that Kim Jong Un decided to threaten the U.S. with a preemptive nuclear attack when he heard that the new sanctions would include pearl necklaces.

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Copyright © 2013 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)