Posted on Thursday, 03.13.14
Five ways to skirt an arms embargo
BY CATHERINE A. TRAYWICK
Let’s say you’re the supreme leader of a pariah state. You’re looking to
move a few hundred tons of Soviet-era arms across international
boundaries, but you’ve been slapped by a harsh arms embargo. You’d like
to quietly transport a weapons shipment across the globe, but you’d
really rather avoid detection. So what’s a Dear Leader to do?
Thanks to a new U.N. report, you don’t have to guess. This week, a panel
of eight experts concluded that, despite nearly a decade of U.N.
sanctions, North Korea’s illicit arms trade is thriving and remains a
major source of revenue for the heavily sanctioned country. Its secret
for success? A sophisticated system for evading sanctions that makes
clever use of foreign embassies, shell companies, flags of convenience,
secret cargo holds, and — of course — code words.
As the crew of the Chong Chon Gang learned in July 2013, when the North
Korean-flagged ship was caught transporting a large cache of Cuban
weapons, these tactics don’t always work. But even the best of criminals
won’t get away every time.
The U.N. report includes a detailed look at that ship’s seizure, which
the panel of experts say provides “an unrivaled insight” into the
“multiple and tiered circumvention techniques” used by North Korea. So
if you’re looking to tear a page out of the Hermit Kingdom’s playbook,
contravene international arms sanctions, and ship weapons around the
globe, here’s how it’s done.
1. Create a vast web of shell companies to own and operate your illicit
You’ll want some distance between yourself and the fleet carrying your
weapons— even if, as in the case of the Chong Chon Gang, the ships bear
your national flag. As the report explains, “the maritime industry is
characterized by complex ownership and operator arrangements.” This is
something you can use to your advantage.
A web of private shell companies that purportedly own or operate the
ships in question will, the report says, “deflect scrutiny with a veneer
of legitimate trading.” And, in the event that the ship’s illicit cargo
is discovered, this approach offers a few other advantages. First, you,
Dear Leader, can always argue that the company, being privately owned,
is solely responsible for violating the law. Second, if the company’s
assets are seized or frozen, its financial impact can be contained,
allowing the larger trade to continue more or less uninterrupted. Once
the seized ship is released, you can always rename, reflag, and declare
it the property of a brand new company.
2. Make good use of your foreign embassies
The U.N. report alleges that North Korea’s embassies in Singapore and
Cuba facilitated the country’s illicit trade deals — remember,
diplomatic protection is your friend. The embassy in Singapore shared
facilities with a company that acted as the shipping agent for the
company that owned the Chong Chon Gang. Meanwhile, the North Korean
embassy in Cuba is believed to have arranged the shipment.
3. Come up with some code words (but don’t write them down)
In the case of the Chong Chon Gang, the ship’s captain had “secret”
instructions for smuggling the arms, as well as special phrases he
should use when referring to the shipment. For example, the captain was
ordered to refer to “containers” as “mechanical parts” and told to watch
out for the message “Payment arranged for 26K,” which would indicate
that he should make a false declaration of his shipment in Panama.
Conversely, the message “Payment was not arranged for 26K” would
indicate that he need not declare the shipment at all. Unfortunately,
the captain kept the instructions on paper, making it all the easier for
the U.N. to get their hands on the evidence.
Lesson: Don’t write down your secret codes.
4. Conceal the illicit cargo by any means necessary
Following the example of the Chong Chon Gong, modify your ships so they
can accommodate 40-foot containers deep within their cargo holds. The
illicit freight should be placed at the bottom of the holds, covered
with some innocuous cargo (like thousands of bags of sugar), closed,
then covered with another layer of innocent cargo (like more sugar).
Containers should also have false walls and bottoms to add another level
of security. Create false stowage plans and customs declarations to fool
5. Conceal your position as you move through open waters
If you want to avoid unnecessary attention from less friendly nations,
turn off your ship’s automatic identification system and falsify your
shipping logs, so no one can track your location. But don’t take it too
far. As the Chong Chon Gang’s crew learned the hard way, these tactics
are also sure to generate suspicion. So if your ship does gain the
attention of the authorities, do not ignore calls from nearby ports!
Just show your falsified documents, and hope for the best.
Here’s the full U.N. report, with the complete rundown of North Korea’s
illicit trade strategies: http://bit.ly/1fqdHfQ
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