NKorean sanctions evasions reveal Hong Kong’s middleman role
HONG KONG — In the dead of night last month, two tanker ships pulled alongside each other in the East China Sea. One was a North Korean vessel, the other was the Belize-flagged Wan Heng 11.
Lights on both ships were blazing, arousing a Japanese spy plane’s suspicion they were carrying out a “ship-to-ship” transfer banned under United Nations sanctions imposed over North Korea’s nuclear weapons program.
Records for the Wan Heng and a number of other ships identified in recent U.N. and U.S. sanctions blacklists and Japanese surveillance reports reveal ties to Hong Kong through front companies based here. The findings underscore rising concern over the southern Chinese financial capital’s role as a nexus for North Korea’s underground business network, which has led the U.S. government to urge Hong Kong authorities to crack down.
The corporate registration agents that set up these front companies “present a key vulnerability in the implementation of financial sanctions,” said a report by the United Nations Panel of Experts on North Korean sanctions released on March 16. Researchers say North Korea relies on front companies acting as middlemen to mask its overseas trading links, many of which involve China.