As reported previously, Pyongyang papers has been hard at work investigating and exposing oil smuggling and sanctions evading activities through ship to ship transfers to DPRK vessels. It would appear that there are no end of companies that are willing to disregard sanctions and smuggle commodities and goods for the North Korean regime. The threat of a damaged reputation and financial ruin if they are caught seems to do little to deter some companies from working with North Korea.
This new Pyongyang Papers investigation centers around methods used by ‘flagged’ vessels registered in third country.
Panama
Panama is positioned on one of the worlds most important trade routes which connects the Pacific and the Atlantic oceans. The Panama Canal has offered a short cut for shipping wanting to avoid the hazardous cape horn for over 100 years.
Panama has by far the largest flagged shipping fleet in the world. So why would such a small nation with a population of less than 4.5 million inhabitants have the biggest fleet in the world? One answer is because its easy to obtain registration. Panama operates an open registry. This is a not a new concept. Ships have used false flags as a tactic to evade enemy warships with examples from as early as the Roman era through to the Middle Ages. The term known as a ‘flag of convenience’ has been used since the 1950’s. However, the modern day practice of ships being registered in third party countries began in the 1920’s.
Why Panama?
What are the advantages of registering under the Panama flag? Well there are a number of advantages. Panama offers the advantage of a quick and easy registration and slack maritime regulations. Ships flying the Panama flag often belong to foreign owners that wish to avoid stricter maritime regulations imposed by their own country. Another advantage is the ability to employ cheap foreign labor with the added bonus of foreign owners paying no income tax.
To Pyongyang Papers this practice does not appear very ethical as it enables illicit trade, sanctions evasion and criminal gain worth millions of dollars every year. Although legal, Pyongyang Papers wonders if this practice should be allowed to continue or should international laws be changed so that flagged vessels should be registered in home countries and therefore governed by the home countries maritime regulations?
Pyongyang Papers has been investigating one such Panama flagged vessel named SUNWARD. The SUNWARD sails under IMO 8920115 and is an oil tanker built in 1990. The tanker has had a number of name changes in the past including GREAT FISH and SUNNY FALCON. Pyongyang Papers has information that the listed owner for the tanker as of 2019 was ‘Sunward Marine S.A.’ based in Kaohsuing, Taiwan with the commercial operator named as ‘Wills International Co. Ltd’ listed at the same address. This would point to the tanker being operated out of Taiwan.
Information from our sources has confirmed that the tanker SUNWARD has been used to evade UN sanctions. The vessel has been acting as feeder ship enabling the import of sanctioned oil to North Korea. Feeder ships are normally large tankers that load the oil from port and travel to a location where where ship to ship transfers will take place to often smaller vessels. During March and April this year the SUNWARD has been in action loading fuel at Taichung port in Taiwan, and transferring it to at least four DPRK tankers with a total of nearly 9,500 metric tonnes and worth millions of dollars.
The following four DPRK flagged vessels were spotted receiving fuel from the SUNWARD:
SIN PHYONG 2 (IMO 8817007)
AN SAN 1 (IMO 7303803)
UN HUNG (IMO 9045962)
SAM JONG 2 (IMO 7408873)
The SAM JONG 2 was listed in the latest UN Panel of Experts Report as receiving a ship to ship transfer from another Panama flagged vessel the RI XIN. The UN report also highlights a number of other Panama flagged vessels that have been supplying UN sanctioned oil to North Korea via ship to ship transfers, including:
HANG YU 11 (IMO 8694194)
INFINITE LUCK (IMO 9063811)
RI XIN (IMO 9121302)
CHAN FONG (IMO 7350260)
KOYA aka HATCH (IMO 9396878)
RI HONG (IMO 9162318)
NEW KONK (IMO 9036387)
MOUSON 328 (IMO 9021198)
Pyongyang Papers believe that its time to add another tanker …. SUNWARD to this list and to urge the Panama authorities to look at the flag of convenience loop hole and police this practice. Without this loophole being closed the DPRK will continue to receive sanctioned goods that will ultimately fuel their quest for revenue to be used to support the regimes prohibited nuclear and ballistic missiles programs. If you have any information on North Korea sanctions evasion please get in touch.