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South Korean authorities likely to seize vessels suspected of ship-to-ship transfers to North Korea

3 Jan 18

According to the South Korean Yonhap News Agency on 31 December 2017, South Korean authorities seized around 21 December 2017 the Panama-flagged KOTI tanker suspected of transferring oil to North Korea in violation of UN sanctions. Similarly, on 29 December 2017, South Korean authorities announced that they had seized the Hong Kong-flagged Lighthouse Winmore in November 2017 for transferring 600 tonnes of refined petroleum to North Korean vessel Sam Jong 2 in October 2017. These seizures follow accusations by US President Donald Trump and European officials that China and Russia had transferred oil to North Korea in October and November 2017; China and Russia's foreign ministries have denied these sanctions violations. The seizures were based on two United Nations Security Council (UNSC) resolutions following North Korea's sixth nuclear test and launch of the Hwasong-15 intercontinental ballistic missile (see North Korea: 6 September 2017: North Korea's sixth nuclear test and likely upcoming missile launch highlight increasing risk of escalation towards conflict). The UNSC Resolution 2375 adopted in September 2017 primarily set a cap on sales of refined petroleum and crude oil exports and requested that all member states inspect vessels sailing from or to North Korean ports or engaging in ship-to-ship transfers with North Korean vessels. The UNSC Resolution 2397 adopted in December 2017 further restricted sales of refined petroleum and authorised members states to seize and impound any vessel suspected of illicitly supplying North Korea with oil.

Significance: South Korean authorities in particular will probably step up their seizure and inspection of vessels, focusing on those either with Chinese or Russian flags, or with predominantly Chinese crews such as the KOTI. Specifically, authorities will probably target vessels suspected of ship-to-ship transfers, which are relatively difficult to eradicate because of the large number of North Korean "fishing" vessels around the Korean Peninsula, and because of the ambiguity caused by foreign-flagged vessels turning off their transponders to stop transmitting location data. As the United States and its northeast Asian allies seek to improve sanctions enforcement and put pressure on North Korea to negotiate over its nuclear and missiles programmes, these enhanced security practices will probably disrupt maritime cargo around the Korean Peninsula. Beyond the six-month outlook, further sanctions focusing on the interdiction of cargo vessels are probable.

Risks: Marine cargo and transport

Sectors or assets affected: Vessels, particularly in South Korean territorial waters

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