North Korean officials based overseas continue to break UN sanctions by brokering and facilitating deals, earning commision, so they can funnel money back to the regime and fund its nuclear weapons programme. UN Resolution 2270 states that all memeber states are to prohibit DPRK diplomats, government representatives (or DPRK nationals working in that capacity) from participating in joint ventures and any other business arrangements.

However, brokering deals is not a new money making scheme for the North Koreans- Pyongyang Papers have previously reported on illict deals facilitated by North Korean officials which you can read here. This time we are investigating a deal involving the brokering of oil between Russia and China.


DPRK acting as the middleman between two countries

Our sources have informed us that DPRK representatives based in Russia, are acting as middlemen to broker a deal for PRC-based company Yao He San Cai Petrifaction Limited for the purchase of Russian diesel fuel from Russian-based LLC RN-Komsomolsky Oil Refinery (RN-KNPZ). The deal is agreed for an initial time of 12 months with extensions. RN-KNPZ is located in Komsomolsk-On-Amur, Khabarovsk territory, which is near to the China-Russia border. Specializing in motor fuel and aviation kerosene, the plant was put into operation in 1942 under the integrated structure of Rosneft Oil Company and its crude distillation refinery capacity equals 46.9 million barrels per year.

LLC RN-Komsomolsk Refinery is the largest producer of oil and gas in the Samara region of Russia and the second largest Rosneft production unit after Yuganskneftegaz.


The North Koreans aren’t the only ones suffering the consequences of sanctions, LLC RN-Komsomolsky Oil Refinery has also been sanctioned by the Office of Foreign Assets Control amidst the Russian invasion on Ukraine.

Oil Imports


Chinese imports of Russian oil hit their highest level in May since the Ukraine invasion started in 2022. This could be down to the sanctions put on Russia and their import of oil is forcing them to sell for cheaper, or the fact that Xi Jinping and Vladimir Putin pledged to boost trade to $200 billion in 2023 when they hailed their no limits partnership. As previously reported by Pyongyang Papers, we all know that China doesn’t shy away from sanction breaking activities. The PRC based company, also known as Yaohe Sancai Petrochemical (Shandong) Co. Ltd, has the address of Room 202, office building No. 819, Tuanjie Road, Qingdao area, China (Shandong) and appears to own a gas station on Yucai Road, Linyi City. With no obvious presence online, this company has a capital of $586 million and its president, Chen Dan, is linked to 7 other companies! We wonder if any of these other companies are breaking sanctions too?


Why use these middle men?

North Korean intermediaries, or middle men, have played a key role in the facilitation of oil deals between Russia and China to provide a bridge between the finances. DPRK representatives are busier than ever and with Russian oil being cheaper, it helps to compensate using them – so a win for all of those involved. Although the North Korean intermediaries would probably be losing all their income to the Regime back in their homeland funding the WMD programme! Using these middle men also means that these deals can go under the radar as there wouldn’t be any direct communication between them. Making it easier to get away with!
If you know any more about this deal or the companies involved, please do get in contact with Pyongyang Papers. We are always very appreciative of any information our followers can provide us.

It is well documented that the DPRK regime and its associates across the world use ever changing methods to evade sanctions imposed on the hermit state in pursuit of its nuclear and ballistic weapons program. Although not a new practice, Pyongyang Papers has been looking at the use of shell companies to disguise business links with the DPRK.

Shell companies

A shell corporation is a corporation without active business operations or significant assets and although they are legal in principle, they can often be used illegitimately and for criminal intent. Setting up a Shell company is relatively easy as it does not often require identification or paperwork- perfect when dealing with the DPRK! Shell companies are also comparatively cheap to create, so can be used as a simple and efficient way to hide the ‘parent’ company and therefore save a business reputation and scrutiny from the authorities.

Shell companies are widely used to disguise DPRK associated business with the purpose of raising funds for the prohibited nuclear and ballistic missile programs.

Cheng Chiun Shipping Agency

Pyongyang Papers has been investigating one such company- Cheng Chiun Shipping Agency (CCSA). This company has created a number of shell companies in an attempt to obfuscate their impending oil purchases and shipments to the DPRK. These shell companies, called: Jaguar Trading Corp., Everway Global Ltd., and Galaxy Trading Corp have themselves joined forces to create a Hong Kong registered company- Hong Yao International Trade Co., Ltd. This further muddies the already murky waters of shell companies with added additional complications to our investigation.

So, what is Hong Yao International Trade Co., Ltd up to? Pyongyang Papers has been informed that the company has teamed up with Wintak Petrochemical Group Ltd., and Hang Yao International Trade Co., Ltd are working together to supply between 8,000 and 24,000 metric tons of oil per month, to the DPRK, which contravenes United Nations Security Council Resolution ( UNSCR) 2397.

UNSCR 2397 limits the DPRK’s imports of refined petroleum to 500,000 barrels for a 12-month period effective from 1 January 2018, all of which need to be logged and reported. A recent report by RUSI, indicates that Nampo- the country’s main port- between May and November have likely breached the annual petroleum import-cap, despite the borders being closed for extended periods due to the COVID-19 pandemic.

Companies & Ships

Hong Yao recent dealings include working with an individual named Hsiao Tsung-han, Tsung-han is the ship controller of Palau-flagged “Sky Venus” (IMO: 9168257). This tanker has sailed under multiple different names previously and is being used by Hong Yao International Trade Co., Ltd to transport the cargo oil from Taichung Oil Depot, Taiwan. The storage at the port is administered by Wintak. The “Sky Venus” heads north from the port to rendezvous with, and transfer her shipment via ship to ship transfer to the Cook Island-flagged tanker “Hai Jun” (IMO:9054896) that previously sailed under the name MITOYO MARU.

Through our investigation, we understand that CCSA have recently passed ownership of Sky Venus (IMO:9168257) between two of its shell companies, Ocean Energy International Corp. have sold the vessel to a company Wills International Co., Ltd. You may remember that Wills International Co., Ltd. previously appeared in our article about the Panama flagged vessel “SUNWARD“. Was this used to hide the connection between the companies and vessels? Pyongyang Papers wonders if there are may be more going on here?

The “New Konk” (IMO:9036387)

To obfuscate illicit activity further “Hai Jun” transferred the oil to a tanker named “New Konk” (IMO:9036387). The New Konk is not a NK registered vessel but has been identified by the UN PoE as a ship to ship transfer vessel with the PoE recommending the ship to be banned from any UN designation port. She was de-registered from the Sierra Leone flag registry in October 2019 so therefore now ‘flag-less’.

After receiving the cargo, New Konk met with and transferred her shipment to North Korean flagged “Yu Son” and “Kum Jin Gang 3”. These vessels would travel the final leg of the journey back to the DPRK. Much like the use of shell companies, deceptive shipping practices involving swapping vessel identities is just another method used by the DPRK and its accomplices to try and mask their sanction breaking activities. The UN PoE report details how the New Konk has also been involved in these activities, sailing under a different name and transmitted a fraudulent maritime mobile service identity number at some time in 2020.

The bank of Kim Jong Un

This investigation started with Pyongyang Papers looking into the setting-up of a Shell companies and the reasons behind their creation but quickly led to an investigation involving a number of individuals and entities supplying the DPRK and ultimately contributing to the funding of the nuclear and ballistic weapons program.

Pyongyang Papers have reported on six shell companies associated with this company or any other DPRK entity that are acting as a facilitator for the bank of Kim Jong Un, or indeed any other sanctioned activity, please get in touch.

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

Entrance to the Panama Canal
Entrance to the Panama Canal

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.

Taichung Port, Taiwan
Taichung Port, Taiwan

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.

Nampo Port

After our previous article, Pyongyang Papers has been investigating more information regarding Tsoi Ming Chi and his lucrative trading business with the DPRK! After the success supplying refined petroleum to North Korea, Tsoi was so keen to continue trading he used his own tanker the Bonvoy 3 to break international sanctions!

The Bonvoy 3

The Bonvoy 3 (IMO 8978784) is listed in the most recent Final UN Panel of Experts report as not having a known flag and illicitly delivered refined petroleum to Nampo, North Korea on at least 2 occasions between August and September 2019. Pyongyang Papers has been informed that the IMO number listed on the UN Panel of Experts Report is incorrect and Tsoi’s Bonvoy 3 tanker actually sails under IMO 8714085. According to vessel tracking resources this tanker is sailing under the flag of Fiji.

Still Active?

The Bonvoy 3 also features in the UN Panel of Experts midterm report where it is listed with other foreign flagged vessels to have continued deliveries of refined petroleum between January and May 2020. The report states that the Bonvoy 3 and the other vessels are liable to seizure when they enter ports or territorial water of other states.

The report details evasion methods used by vessels and their owners supplying the DPRK. They include AIS manipulation and flagging. AIS manipulation can include displaying suspicious behavior such as transmitting falsified or inconsistent identifiers or reporting false destinations. This can also involve the ship being falsely flagged, using a flag after removal from the country’s registry or using a flag without authorization. These are just some of the ways the DPRK are managing to evade the sanctions limit on imports!

More information about the Diamond 8 has also been uncovered during our investigation. A source close to the Sierra Leone Maritime authority has informed us that this tanker has been de-flagged, had its registry cancelled and fines were issued to Tan Jeok Nam who is the listed owner. The Diamond 8 was seen delivering to Nampo on several occasions until 24 March this year.

Diamond 8 participating in illicit activity – Panel of Experts report

The recent Midterm report details substantial breaches of petroleum sanctions that are only contested by China and Russia on technicalities. It is clear that businessmen like Tsoi are able to exploit the current sanctions enforcement practices for profit whilst supplying a regime that is adept at illegal activity.

If you have any information about North Korean sanctions evasion then please get in touch with Pyongyang Papers.

Following on from our previous article, Pyongyang Papers has been informed and investigating more sanctions breaking activity involving crude and refined oil being sold to the DPRK illicitly. Since 2017 oil imports to North Korea have been sanctioned to 500,000 barrels a year by the UN because of the DPRK’s continued pursuit of ballistic missiles and nuclear weapons. A recent report indicated that the DPRK has easily breached the 500,000 barrel limit.

Alex

Pyongyang Papers has learned that in March this year an individual called Tsoi Ming Chi illegally procured refined petroleum for the DPRK. Tsoi, also known as Alex to his friends, is a Chinese businessman who used to work as the director of Sure Metro Limited (順國際有限公司) registered in Hong Kong.

Avoiding detection

Importing sanctioned items to North Korea does not appear to be a problem for Tsoi. Our investigation has revealed that Tsoi worked with a company called Winson Oil to purchase oil to be sent to the DPRK. The oil was transported using the Sierra Leone flagged tanker called the Diamond 8 (IMO 913612). The ship is listed as an oil/chemical tanker and was most recently recorded in the East China Sea according to tracking data online.

The Diamond 8 tanker

The most recent UN Panel of Experts report states the Diamond 8 delivered refined petroleum at Nampo, North Korea shortly after registering under a new owner and the Sierra Leone flag. The report also states that an unspecified company in Indonesia is listed as the ships manager and operator. The Panel of Experts report recommends the Diamond 8 is designated for violating sanctions. Clearly this ship and its owners not been playing by the rules!

The Diamond 8 received the oil through a ship-to-ship transfer from a tanker named Super Star (IMO 9085388). Super Star has had many names previously including Ocean Princess and has sailed under many different flags including Belize and Liberia. Changing ship names and flags is a common tactic used when conducting illicit activity and trying to avoid detection. Pyongyang Papers has also learned that the Diamond 8 did not take its cargo straight to the DPRK, some of the oil was loaded from the Diamond 8 to another Sierra Leone flagged oil products tanker An Ping, which also headed off to the DPRK separately.

Winson oil is a major energy trading company that offers trading and supply chain services in Asia. The official address is listed as being in Singapore and the company website states they have partnerships in Singapore, Indonesia, the Philippines, South Korea, China and Timor-Leste! The company website also mentions its stable relationships with major Asian refineries. This may help explain how they are able to aide sanction evaders so easily!

Transfers at Sea

Ship-to-ship transfers are a common technique used by entities to evade sanctions to supply as well as help the DPRK regime export commodities including coal. It has been reported that at least 2.8 million tonnes of coal were passed to Chinese barges via ship-to-ship transfers between January and August 2019. And with businessmen like Tsoi and large companies like Winson oil happy to help in search of profit, the DPRK is continuing to find ways to avoid sanctions at sea.

Please contact Pyongyang Papers if you have any information sanctions evasion or illicit DPRK activity.

Oil is an essential commodity to any country including North Korea. Crude and refined oils is heavily used in all aspects of industry including agriculture and energy production. North Korea has access to very little of its own oil reserves currently so it relies on imports of oil to be refined at places like the Ponghwa Chemical Factory. Since 2017 oil imports to North Korea have been sanctioned to 500,000 barrels a year by the UN because of the DPRK’s continued pursuit of ballistic missiles and nuclear weapons.

Considering previous form of sanction evasion by North Korea, unsurprisingly, earlier this year reports surfaced suggesting that the North Korean regime had breached its cap on oil imports. In July 2020, a letter to the UN Security Council suggested that North Korea imported more than 1.6 million barrels of oil in the first 5 months of 2020 alone!

Good news

In October 2017 a Russian oil company NNK-Primornefteprodukt was placed under US sanctions for its oil business dealings with North Korea. The company, a subsidiary of the Independent Petroleum Company (IPC) had reportedly shipped over $1 million worth of petroleum products to North Korea at the time. The company and its subsidiaries were removed from the sanctions list in March 2020 because the company had guaranteed it was no longer working with North Korea.

The NNK-Primornefteprodukt facility in Vladivostok, Russia

Return to form

Unfortunately the lure of money has proved too much for NNK-Primornefteprodukt. A source close to the company, who declined to be named, has informed Pyongyang Papers that NNK-Primornefteprodukt have, as recent as June this year, started shipping oil back to the DPRK. Our investigation suggests NNK-Primornefteprodukt were the company shipping the oil and were using the Cameroon-flagged tanker “Gold Star”. The cargo was loaded from the NNK facility in Vladivostok, Russia and a few days later rendezvoused with a sanctioned DPRK tanker “Yu Son” and performed a ship to ship transfer.

The Yu Son tanker

The signs are worrying. The latest UN Panel of Experts report states “the DPRK increased procurement , including through a notable increase in these larger foreign flagged tankers directly delivering to the country on multiple occasions”. If companies like NNK-Primornefteprodukt are willing to deal with the DPRK so soon after being removed from the sanctions list, Pyongyang Papers wonders is there any way to stop companies dealing with North Korea and the DPRK breaching sanctions on oil imports? If you have any information on evading the DPRK sanctions, please contact us.