North Korea Exports $100 Million of Arms Each Year in Breach of Sanctions

North Korea exports $100 million in weapons and missiles each year in violation of United Nations sanctions, according to a UN expert panel’s report that said Iran and Syria may be among countries that received missiles.

The 75-page report, released today, also cited evidence compiled by the International Atomic Energy Agency, governments and news reports that North Korea is involved in “nuclear and ballistic missile related activities in certain other countries including Iran, Syria and Myanmar.”

The report was prepared by a panel charged by the UN Security Council with monitoring the enforcement of sanctions intended to block North Korea’s development of nuclear weapons and ballistic missiles. The sanctions prohibit North Korea from exporting or importing weapons and nuclear or missile technology.

The panel concluded that although there are gaps in enforcement, UN sanctions are “having the intended impact” and have “significantly constrained” North Korea’s arms sales.

The panel “reviewed government issued reports” indicating that North Korea had assisted in the design and construction of Syria’s Dair Alzour nuclear reactor, which was destroyed by an Israeli air attack in 2007.

The report said the panel is investigating “suspicious” activity in Myanmar by the sanctioned North Korean company Namchongang Trading Corp., including possible sale of a magnetometer, which can be used in a nuclear centrifuge or missile guidance system.

The panel of experts includes representatives of the U.S., the U.K., China, France, Japan, Russia and South Korea. China had resisted release of the report since May.

Methods of Concealment

North Korea uses a variety of methods and devices to conceal its activities, the report said.

It cited “false description and mislabeling of the content of the containers, falsification of the manifest covering the shipment, alteration and falsification of the information concerning the original consignor and ultimate consignee and use of multiple layers or intermediaries, shell companies and financial institutions.”

The report described a “broad range of techniques to mask its financial transactions, including the use of overseas entities, shell companies, informal transfer mechanisms, cash couriers and barter arrangements”

Numbers Understated

The Security Council’s imposition of a travel ban and asset freezes on eight entities and five individuals “seriously understate the number of known entities and individuals engaged in proscribed activities and are inadequate to the task of effective inhibiting” banned trade, the report said.

As an example, the panel reported that Green Pine Associated replaced the sanctioned Korea Mining Development Trading Corp. and was “now responsible for about half” of North Korea’s arms exports.

Representative Ileana Ros-Lehtinen of Florida, who is in line to be chairwoman of the Foreign Affairs Committee after Republicans take control of the U.S. House in January, said in a statement that the report should be a “wake-up call” for the U.S. and its allies.

“It is clear that North Korea has continued to escalate its aggressive actions,” she said.

“Instead of continuing its failed strategy of seeking to engage the regime in endless negotiation,” she said, President Barack Obama’s administration “must ratchet up pressure” on North Korea by seeking support for new UN sanctions from leaders at a Group of 20 summit starting tomorrow in Seoul.

To contact the reporter on this story: Bill Varner at the United Nations at wvarner@bloomberg.net

To contact the editor responsible for this story: Mark Silva in Washington at msilva34@bloomberg.net

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