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A joint advisory document has been released by three US
government departments regarding North Korea's ballistic missile
procurement activity. This advisory, published on September 1st,
2020, has been released by the following US Department of State;
Office of Foreign Asset Control (OFAC), Bureau of Industry &
Security (BIS) and the Bureau of International Security and
Nonproliferation.
The advisory notice highlights the techniques, actors, networks
and components used by North Korea to advance and expand its
missile program. The document notes that industries within trade
and supply chain finance are the front-line in managing the risks
associated with the provision, financing or production of goods and
components that can be used for missile technology. As part of this
front-line, financial institutions and freight forwarders need to
show vigilance when shipping or transferring products and
components that could potentially aid the DPRK's missile technology
program.
In addition to the general outline of the advisory and the need
for a sanctions compliance program that meets the challenges of
identifying actors, entities and goods as part of a risk based
approach, the document also highlights a variety of involved
parties to the DPRK missile program, the tactics employed by these
entities and the types of products and goods procured.
North Korean companies such as KOMID, MID and Korea Tangun have
utilised a number of methods with which to procure items that the
DPRK cannot produce domestically. Much of this procurement is
activated through Russia and China but also other countries in
Asia. An example highlighted by the US Department of State, relates
to commercial goods such as multi-axle heavy vehicles, filament
winders and solid propellants as the most widely procured for
import to the DPRK.
An appendix to the advisory document outlines in further detail
a number of items, components and equipment which is often imported
for use in North Korean missile development;
Fibrous material such as carbon, kevlar and aramid fibres
Truck chassis including transmissions for vehicles with more
than four axles
Specialty steels and aluminiums
Bearings with particular tolerances
Isostatic equipment
Precursor chemicals
Electronic relays and convertor chips
Guidance devices such as gyroscopes
Many of the above items are complex to identify from goods
descriptions on trade documents but the key message from the
advisory is to be vigilant and mindful of possible red flags.
Employing best practice to ensure that unexpected or out of the
ordinary patterns in relation to companies, customer locations and
goods are investigated thoroughly is a key element of the advisory.
Those practitioners across the trade and supply chain industries
that do not have a living and working sanctions compliance program
in place and an understanding of 'catch-all' export controls run
the risk of enforcement authority and monetary fines.
The US Department of State advisory document can be found here.
Posted 03 September 2020 by Byron McKinney, Product Management Director, Maritime, Trade & Supply Chain, S&P Global Market Intelligence
