4 indicted for buying North coal

Four South Koreans were indicted for smuggling North Korean coal into the country last year in violation of international sanctions, prosecutors said on Monday.

At a press briefing at the Daegu District Public Prosecutors’ Office, a spokesman for the agency’s financial crimes division announced that a 44 year-old ringleader of the operation, whose name remains undisclosed, was charged and detained for overstepping the legal boundaries of inter-Korean exchange and cooperation as outlined in domestic regulations.

A 45-year-old accomplice who provided vessels to ship the coal and two other figures who forged documents for the transactions were both indicted without arrest for assisting the chief suspect. Five separate companies allegedly brought in eight shipments of 38,118 tons of coal and 2,010 tons of iron from North Korea into the South, worth around 6.8 billion won ($6 million), the prosecution said.

To avoid detection, the resources were first shipped from North Korea to various Russian ports like Vladivostok, where they were declared to be of Russian origin and transferred to ships registered in a variety of countries in South America and Africa. The illegal imports entered the South through five different ports from April to October 2017.

The shipments directly violate international sanctions imposed on Aug. 5, 2017, when the United Nations Security Council unanimously adopted Resolution 2371 banning North Korean coal exports, along with exports of iron, lead and seafood in response to Pyongyang’s nuclear and ballistic missile provocations.

This is the first time suspects have been prosecuted in South Korea for violating the sanctions, though the legal grounds for the indictments are based on South Korea’s own so-called May 24 sanctions, which went into effect in 2010 after the North torpedoed a South Korean naval vessel, killing 46 sailors.

The most brazen violation took place in October 2017, when 4,156 tons of North Korean briquettes, compressed masses of coal, were imported into the South disguised as Russian semi-coke - a highly valuable form of coal. The suspects, the prosecution said, apparently were trying to take advantage of a legal loophole with regards to semi-coke in South Korea, which does not require documentation specifying its place of origin.

“It is not clear how much money was made from the transaction, since coal prices tend to fluctuate,” said a spokesman for the prosecution. “But it does look like the suspects tried to profit from North Korean coal, which has lost much value in the international market due to the UN sanctions.” The spokesman added that North Korean coal costs half as much as Russian coal.

While the suspects initially tried to bring in the coal via China, Beijing’s heightened compliance with international efforts to rein in the North eventually forced them to move operations to ports in the Russian Far East like Kholmsk, located on Sakhalin Island. A Chinese trader is believed to have assisted them.

The shipments never went through customs in Russia, and were shipped to South Korea after documentation about their origins had been falsified.

BY BAEK KYUNG-SEO, SHIM KYU-SEOK [shim.kyuseok@joongang.co.kr]