We conducted the following investigation parallel to an investigation conducted by the Royal United Services Institute (RUSI) on the Weihai World-Shipping Freight network. In its comprehensive report, released Sep. 20, 2019, RUSI shows how the network continues to operate vessels with clear links to the DPRK and its prohibited exports of coal in 2018 and 2019. RUSI used Sayari data to conduct their investigation.
United Kingdom-registered entities own cargo vessels with ties to companies sanctioned by the United States for shipping coal from the Democratic People’s Republic of Korea (DPRK), our investigation found. Satellite evidence suggests the vessels have visited a DPRK port known to be a major coal trading hub.
The apparent continuation of sanctions violations by the vessels demonstrates the importance of investigating the broader networks of companies, individuals, and vessels associated with illicit activities. Network analyses can reveal how DPRK coal exports can touch low-risk jurisdictions like the UK.
U.S. Sanctions Target DPRK Coal Trade
In February 2018, the U.S. Department of Justice sanctioned Chinese company Weihai World-Shipping Freight and Hong Kong company Huaxin Shipping Hongkong Ltd for managing vessels used to export coal from the DPRK—a direct violation of United Nations sanctions.
Commercial shipping vessels often have a ship manager—a company responsible for the day-to-day management of a vessel and its crew. It is usually different from a ship’s owner.
Weihai World-Shipping Freight is the ship manager of the Xin Guang Hai, according to ship registry records. The database lists the owner of the Xin Guang Hai as UK company Ascending Enterprise Ltd—a company with a care of address at Weihai World-Shipping Freight Agency Co Ltd.
Huaxin Shipping is the ship manager of the Asia Bridge 1. Ship registry records list the owner of the Asia Bridge 1 as Hong Kong company World Shipping Marine Ltd, this time with a care of address at Huaxin Shipping (Hongkong) Ltd.
There remain several entities in this network that escaped U.S. sanctions, however. The ship owners of the Xin Guang Hai and the Asia Bridge 1 were not sanctioned.
The sole shareholder of the two sanctioned companies—identified in public records as Tan Xiujun, a Chinese national—also was not sanctioned. In addition, two cargo ships managed by the sanctioned companies at the time they were designated, the Lucky Star and the Asia Bridge (different from the sanctioned Asia Bridge 1), were not sanctioned.
Both the Lucky Star and the Asia Bridge are owned by companies registered in the UK, according to ship registry records. These UK companies were not sanctioned.
What’s up with the Lucky Star
At the time Weihai World-Shipping Freight was sanctioned in February 2018, ship registry records listed it as the Lucky Star’s ship manager. Within two months of being sanctioned, the company cut ties with the Lucky Star. Since April 2018, the vessel’s ship manager is another Chinese company, Weihai Huijiang Trade Co Ltd.
However, Chinese corporate records indicate that Weihai World-Shipping Freight may not have fully severed ties with the Lucky Star. Weihai Huijiang Trade, the vessel’s new manager, is located at the same address as Weihai World-Shipping Freight. In addition, the sole shareholder of WeihaiWorld-Shipping Freight, Tan Xiujun, also serves as an officer of Weihai Huijiang Trade.
This is a relatively common practice for DPRK-linked networks. They respond to sanctions by making it appear they have ended relationships with other companies or assets, when in fact those relationships continue.
Lucky Star is no longer officially managed by a U.S.-sanctioned entity, but its activities are still in violation of UN sanctions. The UN Panel of Experts on DPRK sanctions published evidence earlier this year that the vessel was used to export coal from the DPRK in October 2018 (see Fig. 1). The export of coal from the DPRK is explicitly banned under UN Security Council Resolution 2371.
Further, ship registry data indicates that it has been owned by Always Smooth Limited—a company that is registered in the United Kingdom—since December 2017.
Fig. 1: Aerial image of the Lucky Star loading coal in a DPRK port on October 27, 2018, in violation of UN sanctions prohibiting the export of coal from the DPRK.
The Asia Bridge Visits the DPRK
Huaxin Shipping Hongkong was sanctioned in February 2018 along with Asia Bridge 1.
But ship registry data reveals that at the time it was sanctioned, Huaxin Shipping Hongkong was also the ship manager of another ship with a similar name, the Asia Bridge (IMO No. 9010022).
In April 2018, around the same time that Weihai Huijiang Trade took over management of the Lucky Star, it also began managing the Asia Bridge.
As recently as June 25, 2019, the vessel reported its location as the port of Nampo, a major DPRK shipping hub located to the southwest of Pyongyang. Nampo is just 25 miles down the Taedong River from Songnim, where the Lucky Star was photographed loading coal in October2018.
Like the Lucky Star, the Asia Bridge is also currently owned by a company in the United Kingdom—Good Siblings Ltd. Prior to August 2018, Good Siblings was owned by a Chinese national named Tan Xiuchen, who listed his or her address as Weihai, China, the same city Tan Xiujun is from.
UN Ban on DPRK Coal Trade
The export of coal from the DPRK was banned by UN Security Council Resolution 2371 on August 5, 2017. Resolution 2371 states that “the DPRK shall not supply, sell or transfer, directly or indirectly, from its territory or by its nationals or using its flag vessels or aircraft, coal … and that all States shall prohibit the procurement of such material from the DPRK by their nationals.” The UK’s representative to the UN Security Council voted for Resolution 2371, which was approved unanimously.
Given the UN’s strict prohibition on DPRK coal exports, the activities of the Lucky Star and the Asia Bridge merit further monitoring. Their past connections to sanctioned entities, as well as their ownership by UK companies, are noteworthy.
Public records are vitally important to identifying undetected companies and vessels that violate sanctions. Looking at the broader networks of sanctioned entities is essential to uncovering key actors in illicit activities.
The Lucky Star and the Asia Bridge are prime examples of this. While neither vessel has yet to face sanctions, there’s clear evidence that the Lucky Star and the Asia Bridge have violated UN prohibitions on exporting coal from the DPRK.
These findings show that despite sanctions on individuals, entities, and vessels, DPRK actors continue to engage in the trade of coal through the wider networks of unsanctioned shell companies and vessels. This raises significant concerns about the implementation of UN Security Council resolutions in low-risk jurisdictions such as the UK.
Photo credit: Shafquat Towheed