UNITED NATIONS (REUTERS) - A UN-blacklisted North Korean shipping company has renamed most of its vessels in a bid to disguise their origin and continue its illicit shipments in violation of United Nations sanctions, according to a UN experts report seen by Reuters on Wednesday.
The UN Security Council's Panel of Experts on North Korea, which monitors implementation of sanctions on Pyongyang, also said in the 76-page report that North Korea "continued to defy Security Council resolutions by persisting with its nuclear and ballistic missile programmes."
The council last July blacklisted shipping company Ocean Maritime Management Company (OMM) for arranging an illegal shipment on the Chong Chon Gang ship, which was seized in Panama and found to be carrying arms, including two MiG-21 jet fighters, hidden under thousands of tonnes of Cuban sugar.
"Following the designation of OMM ... (North) Korea acted in order to evade sanctions by changing the registration and ownership of vessels controlled by the company," the report said.
"Thus far, 13 of the 14 vessels controlled by OMM have been renamed, their ownership transferred to other single ship owner companies (with names derived from the ship's new names) and vessel management transferred to two main companies," it added.
The report said OMM worked with individuals and entities based in countries such as Brazil, China, Egypt, Greece, Japan, Malaysia, Peru, Russia, Singapore and Thailand.
The panel recommended that the council's sanctions committee blacklist 34 OMM entities (shell companies), including Chongchongang Shipping Co, Amnokgang Shipping and Biryugang Shipping. It also recommended sanctioning OMM vice-president Choe Chol Ho, Chongchongang Shipping president Kim Ryong Chol and three Chongchongang directors.
It said that North Korean diplomats, officials and trade representatives played key roles in illegal weapons and missile deals. They often were involved in illegal funds transfers.
The panel also said North Korean intelligence agents aided the movement of money believed to be linked to weapons transactions.
The report said agents of the Reconnaissance General Bureau (RGB), North Korea's main intelligence agency, had worked at international organisations and were using those positions to support activities aimed at skirting sanctions.
It cited as an example the French government's decision to freeze assets of Kim Yong Nam, an RGB officer working under cover as an employee at Unesco, the UN cultural and scientific organisation in Paris, and his son and daughter. His son Kim Su Gwang, also an RGB officer, was working at the UN World Food Programme.
The panel said Kim Young Nam's daughter, Kim Su Gyong of the Korean United Development Bank, "was engaged in financial activities under false pretences in order to conceal the involvement of her country."
The panel also opened its first inquiry into the use of drones. Between October 2013 and March 2014, South Korea found wreckage of three drones it determined were from North Korea and had been spying on military facilities.
The Security Council has banned the supply, sale or transfer of complete armed or surveillance drones with a range of at least 300 km. The panel said it was unclear if the recovered drones were acquired abroad or made in North Korea.
The experts found "no incidents where bans imposed by the (UN) resolutions directly resulted in shortages of foodstuffs or other humanitarian aid."
"National legislative or procedural steps taken by (UN) member states or private sector industry have been reported as prohibiting or delaying the passage of certain goods to (North Korea)," the report said.
"It is sometimes difficult to distinguish these measures from United Nations sanctions."
North Korea is under United Nations sanctions because of its nuclear tests and missile launches. In addition to arms, Pyongyang is banned from importing and exporting nuclear and missile technology and is not allowed to import luxury goods.
The experts' report also said the sanctions have not curbed food or humanitarian aid to the impoverished hermit state, but it recommended that the UN spell out which items for such use are exempted.
The UN Security Council says the sanctions are not intended to harm North Korean civilians, but there is no exemption mechanism. For that reason, the experts recommended that exemptions be proposed "provided that such items are confirmed to be solely for food, agricultural, medical or other humanitarian purposes."
North Korea has said the sanctions are illegal and aimed at toppling the country's reclusive government. A UN inquiry last year reported systematic torture, starvation and killings by the country's leaders that are comparable to Nazi-era atrocities.