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Kim Jong Un has a fleet of ghost ships sneaking around the high seas to beat sanctions

A mound of North Korean coal at Rajin harbor in North Korea’s Rason Special Economic Zone in 2017 (Ed Jones/AFP/Getty Images)

In April 2018, a ship carrying $3 million worth of coal slipped into Indonesian waters with its identification transmitter switched off and its flag hidden from view.

Acting on a tip, Indonesia’s navy detained the vessel, which identified itself as the “Wise Honest” from Sierra Leone. When inspectors went aboard, they found two dozen crew members and registration documents indicating a different country of origin — North Korea.

The interdiction, detailed in a March 5 report by U.N. sanctions monitors, is part of a worrying rise in coal exports from the hermit kingdom — exports that violate U.N. sanctions and help finance Pyongyang’s nuclear weapons program, the monitors said.

North Korean leader Kim Jong Un is likely to seek Moscow’s help in easing those sanctions Thursday as he holds his first summit with President Vladi­mir Putin in Russia’s Pacific port city of Vladivostok.

In the summer of 2017, the U.N. banned all North Korean coal exports, but Kim Jong Un's regime was able to trick its adversaries into accepting deliveries. (Video: Joby Warrick, Jason Aldag/The Washington Post)

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Pyongyang is growing bolder in its sanctions evasion in part because many countries — and their banks, insurers and commodities traders — have long failed to properly enforce the measures, North Korea experts said. And some sanctions specialists worry that mixed signals from the Trump administration may further undermine global enforcement.

“It’s anarchy,” Hugh Griffiths, the outgoing coordinator of the U.N. monitors, said in an interview. “These massive gaps in maritime and financial governance will provide Chairman Kim with an economic lifeline for months, if not years, to come.”

While Washington has traditionally led the global policing of U.N. and U.S. sanctions, President Trump’s recent overtures to Kim — and his order last month to withdraw new Treasury Department sanctions on North Korea — introduce “a tremendous sense of uncertainty in the global community,” said Elizabeth Rosenberg, a Treasury Department sanctions official from 2009 to 2013. “They don’t know whether sanctions will be there the next day.”

The White House and the Treasury Department declined to comment. Trump this month said he did not want to increase U.S. sanctions “because of my relationship with Kim Jong Un” and because he believed “something very significant is going to happen” in his denuclearization talks with Kim.

North Korea conducts its illicit trading with a fleet of ghost ships that paint false names on their hulls, steal identification numbers from other vessels and execute their trades via ship-to-ship transfers at sea, to avoid prying eyes at ports.

In the case of the Wise Honest, a globe-trotting North Korean salesman arranged the shipment by holding meetings at Pyongyang’s embassy in Jakarta, Indonesia — and then paid an Indonesian broker through bank transfers facilitated by JPMorgan Chase, according to bank documents and other evidence gathered by the monitors.

While the interception of the Wise Honest initially looked like a victory for enforcement, Indonesia recently defied U.N. monitors’ instructions to seize the coal, allowing it to be transferred to another vessel, which promptly set sail for Malaysia, Griffiths said. He called this a “clear violation” of sanctions and said he has asked Malaysia to investigate. Indonesian and Malaysian officials did not immediately respond to requests for comment.

Many countries agree that a nuclear North Korea represents a grave threat to global security. But enforcing the sanctions requires more time and money than many are willing to spend, Griffiths said.

Stopping Pyongyang’s illicit trade would involve keeping close watch on North Korea’s embassies and expelling diplomats who facilitate sanctions evasion, he said.

It would also require countries to boost regulation of insurers, banks and commodities traders to ensure they more thoroughly screen the shipments and transactions they support, the monitors said in the report.

Pyongyang’s trading partners include criminal networks that knowingly turn a blind eye to sanctions law, Griffiths said. “If they see North Korean coal is cheaper to buy because it’s illegal, there’s an increased profit margin,” he said. Other traders unwittingly bumble into the transactions because they are not scrutinizing their deals closely enough, Griffiths said. In addition to coal exports, illegal oil imports to North Korea are also soaring.

Most of the ships that trade with Pyongyang sail under a “flag of convenience,” meaning they are registered in countries such as Panama, Togo and Dominica that provide little oversight. But vessels and firms in more-developed countries have also come under suspicion.

In late March, the Treasury and State departments added two oil tankers from South Korea and Singapore to a watch list of vessels “believed to have engaged in” illegal trade with North Korea. And the U.N. monitors found that a South Korean company was the intended recipient of the Wise Honest coal.

Singaporean officials said that they were investigating the tanker from their country and that they take their obligations to enforce sanctions “very seriously.” South Korea said it will “conduct a thorough investigation” on possible sanctions violations.

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The U.N. Security Council banned North Korean coal exports — the country’s largest source of external revenue — in August 2017, after Pyongyang carried out several missile launches. Soon after, the Security Council banned all ship-to-ship transfers with North Korean vessels and severely restricted North Korea’s petroleum imports, in part to deprive its military of fuel.

Griffiths and his team of seven is the main monitor of compliance, working out of what Griffiths calls an “undisclosed location” near U.N. headquarters in New York — undisclosed after cyberattacks against the monitors raised concerns about their safety.

The team scrutinizes photos and satellite imagery — some supplied by the United States, Japan, South Korea and Britain — and bombards Pyongyang’s trading partners with emails demanding that they explain their activity.

“We don’t have subpoena power,” said Griffiths, a Briton who has spent his career investigating international crime for U.N., European Union and U.S. bodies. And the group is woefully understaffed for the size of the task, he said, with the same number of monitors as a U.N. team scrutinizing Somalia sanctions, despite having five times as many measures to track.

Still, the Griffiths team does have some teeth: It can recommend that the Security Council impose sanctions on companies and ships that violate the rules, a punishment that can hamper their ability to trade.

Some of the explanations the monitors receive are far-fetched. After the Shang Yuan Bao oil tanker was photographed transferring cargo through hoses to a North Korean vessel in May 2018, Griffiths contacted a Taiwan-based management company linked to the ship. According to the report, the company replied that it had used the hoses to provide drinking water to the North Korean ship, “based on humanitarian aid.”

Given that the ship’s hoses are normally used for petroleum, the explanation was “not credible,” Griffiths said. “Anyone who has tried to drink petroleum-tainted water will tell you, you automatically retch,” he said.

In the case of the Wise Honest, a North Korean man named Jong Song Ho was central to the deal, the monitors said. In late 2017, he turned up for a meeting at North Korea’s embassy in Jakarta, where North Korean diplomats introduced him to an Indonesian commodity trader named Hamid Ali.

Jong presented a business card introducing himself as president of Jinmyong Trading Group and Jinmyong Joint Bank in Pyongyang — the latter of which the United States hit with sanctions in 2017.

In early 2018, Ali and Jong met again in Jakarta and discussed a “transshipment of coal,” Ali told the monitors, according to the report. Jong then arranged to send $760,000 to Ali, via a company called Huitong Minerals, the report said. JPMorgan Chase helped facilitate this payment by acting as the correspondent bank in transfers, according to bank-transfer records obtained by the monitors.

Part of that money was a commission payment for helping arrange sale of the Wise Honest coal, Griffiths said.

Ali did not respond to The Washington Post’s requests for comment. Jong and Huitong Minerals could not be reached for comment.

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On March 11, 2018, a U.N. member state captured a photo of the Wise Honest being loaded with coal at a port in Nampo, North Korea.

After Indonesia detained the ship in April 2018, officials there told the monitors that a South Korean company, Enermax Korea, was the “final destination/­recipient” of the coal, according to the report.

Enermax told the monitors it “simply received an offer of ­Indonesia-origin coal from someone who seemed to be a local broker in Indonesia.” Enermax did not respond to The Post’s requests for comment.

Some ships carry on trading even after the Security Council places sanctions on them. In March 2018, the United Nations placed sanctions on a vessel registered in Dominica called the Yuk Tung, along with the Singaporean company that managed it, after the vessel traded with a North Korean ship. That punishment banned the Yuk Tung from all ports worldwide and effectively prohibited other ships from trading with it.

To keep operating in the East China Sea, the Yuk Tung painted a new name and a stolen identification number on its stern and falsely transmitted the stolen number. Meanwhile, the rightful owner of that ID was anchored in the Gulf of Guinea, more than 7,000 miles away, according to the monitors.

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These tactics enabled the Yuk Tung to masquerade as the Maika and receive $5.7 million worth of petroleum in October from a Singaporean tanker controlled by one of the region’s biggest commodities traders, Hin Leong Trading, Griffiths said. A U.N. member state told Griffiths’s team it believed the petroleum was destined for North Korea.

The monitors said Hin Leong Trading, founded by Singaporean billionaire Lim Oon Kuin, cooperated with their investigation and appeared to be an “unwitting party” to an illicit transaction, but Griffiths said the company is not doing all it could to vet its trading partners.

“We shall continue to strive to improve our procedures and operations to ensure that sanctions are never breached,” a spokesman for Hin Leong said by email.

A British insurer and banks from the United States and Singapore were also involved in the deal, the monitors said, declining to name them.