What are the common tactics that North Korea and its accomplices take to evade sanctions vis a vis maritime route?

Lee Kok Leong, our special correspondent, interviews Kerry B Contini, Partner, Baker & McKenzie, on trade sanctions against North Korea and the need for a good compliance program and best practices to counter evasion.

Baker & McKenzie (BM): North Korea’s extensive efforts to evade sanctions are well-documented. The US Government has issued several advisories to help companies in the shipping industry identify possible sanctions evasion and mitigate related sanctions compliance risks. This includes the “Updated Guidance on Addressing North Korea’s Illicit Shipping Practices” published by the US Departments of State, Treasury, and the Coast Guard in May 2019, and the “Guidance to Address Illicit Shipping and Sanctions Evasion Practices” published by those same agencies in May 2020. I will provide a few examples of common tactics taken to evade sanctions.

Vessels that have been sanctioned or are engaged in sanctionable trade with North Korea have been known to paint over their names and IMO numbers in order to hide their identities. They have also been known to falsify their flags. Parties engaged in illicit trade have reportedly falsified documents, such as bills of lading, certificates of origin, invoices, and packing slips, to hide the fact that cargo was going from or to North Korea.

Another common tactic is to disable or manipulate automatic identification systems (AIS) in order to conceal a vessel’s movements or ports of call. Vessels with cargo originating from or destined to North Korea might engage in ship-to-ship transfers to avoid stopping at North Korean ports.