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China restricts N. Korea exports: ministry
by Staff Writers
Beijing (AFP) April 5, 2016


'Panama Papers' reveal links with N. Korea front companies
Seoul (AFP) April 5, 2016 - A North Korean front company used to help fund the country's nuclear weapons programme was among the clients of the Panamanian law firm at the centre of a massive data leak, reports said Tuesday.

With a Pyongyang-based address, DCB Finance Ltd. was registered in the British Virgin Islands (BVI) in 2006, and leaked papers show that the Panama firm, Mossack Fonseca, legally incorporated the company, the Guardian newspaper and BBC reported.

The same year saw North Korea conduct its first nuclear test, triggering the first of numerous US Security Council resolutions imposing sanctions on Pyongyang.

DCB Finance Ltd was registered by North Korean official Kim Chol-Sam and Nigel Cowie, a British banker who had moved to North Korea in 1995 and went on to head its first foreign bank, Daedong Credit Bank -- of which DCB Finance was an offshoot.

Leaked papers suggest that, despite the Pyongyang address, Mossack Fonseca failed to notice DCB's link with North Korea until the BVI's Financial Investigation Agency sent it a letter in 2010 asking for details of the company.

It was only then that the law firm resigned as DCB's agent.

The following year Cowie, who says he was unaware of any unlawful transactions, sold the share he had brought in Daedong Credit Bank to a Chinese consortium.

Both the bank and DCB -- as well as official Kim Chol-Sam -- were targeted by US sanctions in June, 2013 on the grounds that they had, since 2006, provided financial services to two North Korean entities with a "central role" in developing the North's nuclear and ballistic missile programmes.

The US Treasury said DCB Finance had been used to "carry out international financial transactions as a means to avoid scrutiny by financial institutions avoiding business with North Korea."

A leaked e-mail from Mossack Fonseca's compliance department in August 2013 appeared to acknowledge a lack of due diligence on the part of the law firm.

"We have not yet addressed the reason we maintained a relationship with DCB Finance when we knew or ought to have known from incorporation in 2006, that the country, North Korea was on the black list," the e-mail said.

"We should have identified from the onset that this was a high risk company," it added.

China on Tuesday imposed restrictions on imports of North Korean coal and iron, Beijing's commerce ministry said, in line with United Nations sanctions on the country following its nuclear and missile tests.

The coal trade between the neighbours was worth $1 billion last year, Chinese Customs figures show, but the announcement allowed for trade to continue if the proceeds were for livelihood purposes.

The move also put in place bans on the import of gold, titanium and rare earth metals from the North, as well as some sales of aviation fuel to it, in line with the UN Security Council measures.

The council approved the measures in March, in the wake of a fourth atomic test by Pyongyang, and Beijing pledged strictly to implement them.

But the resolution's language -- concluded after seven weeks of hard negotiations between Washington and Beijing -- left significant loopholes for Pyongyang's key economic supporter to continue business as usual.

China is the North's main provider of trade and aid and the text allowed for commerce in certain goods, including coal and iron, to carry on as long as the proceeds did not support Pyongyang's nuclear ambitions.

The UN did not set criteria for making that determination, leaving each country to make its own decision.

The exceptions were mirrored in the text of the statement by China's commerce ministry, which also provided a letter for companies to sign "solemnly" pledging that their imports of the products were "not related to North Korea's nuclear programme or ballistic missile programme".

Aviation fuel sales could also be permitted for humanitarian and some civil aviation purposes.

Trade with China is crucial for the isolated and impoverished North, which has suffered regular food shortages and an outright famine in the mid-1990s.

In 2014 China accounted for more than 90 percent of North Korea's $7.61 billion in total trade, according to the latest available figures from South Korea's state-run Korea Trade-Investment Promotion Agency.

Washington has long held that changing North Korea's behaviour depends on China's willingness to use its economic leverage.

But Beijing has resisted targeting Pyongyang's fragile economy for fear of provoking the regime's collapse, potentially leading to a flood of cross-border refugees and ultimately the prospect of US troops stationed on its border in a reunified Korea.

That stance has become harder and harder to maintain, as Pyongyang has continued to defy both the international community and Beijing's efforts to restrain it.

In recent weeks North Korea has repeatedly fired projectiles into the East Sea.

The latest fit of pique followed a meeting last week between US President Barack Obama and his Chinese counterpart Xi Jinping, where they agreed to fully implement sanctions against Pyongyang.

The leader was in Washington for a two-day nuclear security summit being hosted by Obama, at which the American president also discussed North Korea's nuclear threat with Japan and South Korea.

N. Korea video shows rocket attack on South's president
Seoul (AFP) April 5, 2016 - An official North Korean website has released a new propaganda video portraying a multiple rocket attack on South Korea's presidential Blue House and other government buildings in Seoul.

It was uploaded Monday to the DPRK Today website, which had released another video 10 days before depicting a nuclear attack on Washington.

Tensions have been rising on the Korean peninsula ever since the North conducted its fourth nuclear test on January 6.

Over the past month, Pyongyang has issued repeated threats of strikes against Seoul and Washington, largely in response to annual South Korea-US war games that kicked off in early March.

The ongoing joint exercises have been larger than usual and included a special operation to "decapitate" the North Korean leadership in the event of a full-scale conflict.

Pyongyang took that as a direct threat to leader Kim Jong-Un, and the Korean People's Army (KPA) recently issued an "ultimatum" demanding South Korean President Park Geun-Hye apologise and punish those who formulated the strategy.

The new 88-second video -- entitled "If the ultimatum goes unanswered" -- showed rockets fired from mobile launchers in the North slamming into the Blue House and destroying the buildings in a ball of fire.

It ended with the warning: "Everything will turn into ashes".


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