Unauthorized inter-Korean coal trade confirmed

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Unauthorized inter-Korean coal trade confirmed

Korea Customs Service Deputy Commissioner Roh Suk-hwan presents the findings of an investigation regarding illegal entry of North Korean coal and pig iron into South Korean ports at a media briefing held at the government complex in Daejeon, Friday. / Yonhap

By Yoon Ja-young

South Korea received 6.6 billion won ($5.86 million) worth of North Korean coal and pig iron, of which the country of origin was fabricated, the nation's customs agency said, Friday.

Cheong Wa Dae said there is no conflict between South Korea and the U.S. regarding the issue as the two countries are coordinating closely with mutual trust.

According to the Korea Customs Service (KCS), three South Korean importers brought in 35,038 tons of North Korean coal and pig iron from April through October last year.

They turned out to have used a Russian port as a transit hub, fabricating the materials as Russian coal. They brokered exports of North Korean goods to other countries via Russia, and got North Korean coal as a commission.

In one of the seven cases, the importer reported that it was importing semi-coke, which doesn't require submission of the country of origin. It used a paper company established in Hong Kong, and the bank wasn't aware of irregularities in the transaction, according to the KCS.

The KCS has been investigating nine instances of suspected North Korean coal imports since last October, following allegations several foreign cargo ships have already brought in North Korean resources to South Korean ports.

It confirmed seven illegal shipments, and determined to send three individuals and their importing companies to the prosecution.

The KCS' confirmation is expected to stir controversy as the shipments of North Korean resources potentially violate international sanctions against North Korea.

Following the United Nations Security Council (UNSC) sanctions made last August, North Korea is banned from exporting coal, iron and other mineral resources which member states should not purchase. The importers were tempted to illegally bring in North Korean coal as the price fell due to the sanctions.

Member countries are also required to seize and search vessels suspected to be involved in prohibited activities with North Korea.

There is concern the confirmation may negatively affect South Korea's alliance with the United States as well as its relations with North Korea.

"Though the United States has been moving to improve ties with North Korea, engaging in talks, it has been continuing pressure," said Yang Moo-jin, professor at the University of North Korean Studies.

Washington has been firm that sanctions should be maintained until North Korea takes concrete steps for denuclearization.

"As it turned out that South Korea, which is a U.S. ally, violated the sanctions, there will be negative effects," he said.

"However, the South Korean government voluntarily started an investigation, and there also was coordination with the United States. The incidence is a negative, but it won't have a huge impact."

The North Korean coal, however, has been at the center of political turmoil.

"The government is trying to scale it down into a problem of individual importers," said Kim Sung-tae, floor leader of the main opposition Liberty Korea Party (LKP).

"It is a serious problem that can have a huge impact on national interests as well as cooperation with the United States." The LKP is demanding a National Assembly investigation.

The governing Democratic Party of Korea (DPK), meanwhile, said the government's investigation should clear up all groundless suspicions and political attacks.

The impact on inter-Korean relations will also be limited, according to Yang.

"North Korea has been demanding South Korea to move pre-emptively to ease sanctions, but it will understand the South doesn't have much room to move."

Seoul is denying concerns that there may be a secondary boycott on South Korea.

"As the U.S. State Department has mentioned many times, Korea and the U.S. are coordinating with mutual trust. There is no conflict between the two countries," a ranking official for Cheong Wa Dae told reporters.

Yang agreed that secondary sanctions aren't likely. "The businesses and individuals involved in the illegal trading will be penalized under Korean law," he said. "That will be all."


Korea Customs Service Deputy Commissioner Roh Suk-hwan presents the findings of an investigation regarding illegal entry of North Korean coal and pig iron into South Korean ports at a media briefing held at the government complex in Daejeon, Friday. / Yonhap

By Yoon Ja-young

South Korea received 6.6 billion won ($5.86 million) worth of North Korean coal and pig iron, of which the country of origin was fabricated, the nation's customs agency said, Friday.

Cheong Wa Dae said there is no conflict between South Korea and the U.S. regarding the issue as the two countries are coordinating closely with mutual trust.

According to the Korea Customs Service (KCS), three South Korean importers brought in 35,038 tons of North Korean coal and pig iron from April through October last year.

They turned out to have used a Russian port as a transit hub, fabricating the materials as Russian coal. They brokered exports of North Korean goods to other countries via Russia, and got North Korean coal as a commission.

In one of the seven cases, the importer reported that it was importing semi-coke, which doesn't require submission of the country of origin. It used a paper company established in Hong Kong, and the bank wasn't aware of irregularities in the transaction, according to the KCS.

The KCS has been investigating nine instances of suspected North Korean coal imports since last October, following allegations several foreign cargo ships have already brought in North Korean resources to South Korean ports.

It confirmed seven illegal shipments, and determined to send three individuals and their importing companies to the prosecution.

The KCS' confirmation is expected to stir controversy as the shipments of North Korean resources potentially violate international sanctions against North Korea.

Following the United Nations Security Council (UNSC) sanctions made last August, North Korea is banned from exporting coal, iron and other mineral resources which member states should not purchase. The importers were tempted to illegally bring in North Korean coal as the price fell due to the sanctions.

Member countries are also required to seize and search vessels suspected to be involved in prohibited activities with North Korea.

There is concern the confirmation may negatively affect South Korea's alliance with the United States as well as its relations with North Korea.

"Though the United States has been moving to improve ties with North Korea, engaging in talks, it has been continuing pressure," said Yang Moo-jin, professor at the University of North Korean Studies.

Washington has been firm that sanctions should be maintained until North Korea takes concrete steps for denuclearization.

"As it turned out that South Korea, which is a U.S. ally, violated the sanctions, there will be negative effects," he said.

"However, the South Korean government voluntarily started an investigation, and there also was coordination with the United States. The incidence is a negative, but it won't have a huge impact."

The North Korean coal, however, has been at the center of political turmoil.

"The government is trying to scale it down into a problem of individual importers," said Kim Sung-tae, floor leader of the main opposition Liberty Korea Party (LKP).

"It is a serious problem that can have a huge impact on national interests as well as cooperation with the United States." The LKP is demanding a National Assembly investigation.

The governing Democratic Party of Korea (DPK), meanwhile, said the government's investigation should clear up all groundless suspicions and political attacks.

The impact on inter-Korean relations will also be limited, according to Yang.

"North Korea has been demanding South Korea to move pre-emptively to ease sanctions, but it will understand the South doesn't have much room to move."

Seoul is denying concerns that there may be a secondary boycott on South Korea.

"As the U.S. State Department has mentioned many times, Korea and the U.S. are coordinating with mutual trust. There is no conflict between the two countries," a ranking official for Cheong Wa Dae told reporters.

Yang agreed that secondary sanctions aren't likely. "The businesses and individuals involved in the illegal trading will be penalized under Korean law," he said. "That will be all."


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