U.S. says N. Korea coal paid for weapons

The United Nations Security Council voted Saturday for the third time in two years to block countries from buying North Korean coal, the country's primary export, in a move intended to choke off funding from Kim Jong Un's weapons programs.

The new ban plugs a loophole that allowed North Korea to sell coal to China under the guise of "humanitarian" trade, even though much of North Korea's coal trade has been devoted to weapons development, not humanitarian purposes, according to recent U.S. court filings.

The humanitarian loophole was large enough that after the first such U.N. ban in March 2016, Chinese companies actually imported more North Korean coal.

Documents from a recently unsealed U.S. court filing, combined with another federal case, suggest that much of the money China has paid to North Korea for coal over the years went toward the country's weapons and military efforts.

The coal trade cited in the court documents, which has accounted for as much as a third of North Korean exports, helps explain how North Korea continued to develop its weapons programs despite being impoverished and under trade sanctions. The connections to the military also undermine Chinese claims that their imports were benefiting North Korean civilians.

"We considered that to be a very narrow [humanitarian] exception, but it soon became clear that not all others shared our view," a State Department spokesman said before the vote.

In the most recent court filing, unsealed last month, U.S. government attorneys were granted a seizure warrant against the largest Chinese importer of North Korean coal and four related front companies after presenting evidence that the Chinese company's transactions with North Korea were "ultimately benefiting sanctioned North Korean end users, including North Korea military and North Korea weapons programs."

The documents cite a defector, deemed "reliable," who said that the vast majority of the revenue from the country's coal exports go toward the military, nuclear missiles and weapons programs.

Those disclosures followed a court case filed in September in which federal attorneys cited a spreadsheet showing a major Chinese coal importer making purchases from various North Korean government agencies.

The Chinese importer was also purchasing from a North Korean company controlled by a secretive government branch believed to be conducting illicit activities and slush funds for political leaders.

"What these cases expose is that calling [China's] coal business with North Korea 'humanitarian' is a cynical lie," said Joshua Stanton, who runs the site One Free Korea and advises House and Senate staff on North Korea sanctions law. "There is no such thing as truly private industry in North Korea."

Asked last week about the coal imports, a spokesman for the Chinese embassy said in a statement that "China has been comprehensively and accurately implementing the U.N. Security Council resolutions."

Exactly how to rein in North Korea's attempts to build a nuclear missile capable of hitting the United States has been a matter of debate for years, but recent missile launches by the reclusive country, including one last month, have intensified the discussion.

After that missile launch, President Donald Trump tweeted that he is "very disappointed in China. Our foolish past leaders have allowed them to make hundreds of billions of dollars a year in trade, yet they do NOTHING for us with North Korea, just talk."

What's undisputed is the importance of coal exports to the North Korean economy. From 2010 to 2015, coal shipments accounted for about a third of North Korea's total export revenue, according to figures cited by the Congressional Research Service. The coal exports, which generated more than $1 billion in annual revenue, were mainly purchased by Chinese companies.

While China says its recent coal purchases comply with U.N. rules and benefit North Korean civilians, U.S. officials have reported that at least some of the coal trade is directly profiting the North Korean military.

The Treasury Department last year, for example, said that a "significant share" of the money for North Korea's nuclear and ballistic missile program was coming from mining operations that often use "workers in slave-like conditions." Those natural resources, including coal, were sold abroad.

The more recent court filings by U.S. officials assert conclusive evidence of the connections between the North Korean exports and the military, citing business records, and give a better sense of the extent of the magnitude of the trade's contribution to the military.

"Kim Jong Un puts over 95 percent of North Korea's foreign currency earnings generated from coal exports toward the advancement of ... North Korea's military and North Korea's nuclear missiles and weapons programs," according to the defector, who is quoted in an affidavit filed by assistant U.S. attorneys for the District of Columbia.

A Section on 08/07/2017

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