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North Korea’s nuclear weapons development programme and its testing of related delivery systems have long evoked international concern. As international pressure grows to contain the rising threat from Pyongyang, greater attention is also being paid to the enforcement of UN sanctions against the regime.

The recent assassination of Kim Jong-nam and the resultant publicity concerning North Korea’s activities in Malaysia have now put Malaysia’s own compliance under the spotlight.

Increasingly tough sanctions

Since 2006, the UN Security Council [UNSC] has passed four sanctions resolutions against North Korea.

These resolutions imposed on UN member countries a series of obligations to monitor and restrict all North Korean activities relating to its nuclear weapons, ballistic missile, and weapons of mass destruction programmes.

This includes inspecting, and where appropriate, interdicting prohibited cargo transiting through their territory, barring the supply or sale of prohibited items to North Korea and monitoring the operations of North Korean companies to ensure strict compliance with UN sanctions.

It also obliged member states to prevent North Korea from accessing banking and financial services and prohibit bulk cash transfers.

Member states were particularly asked to monitor North Korean diplomatic missions since it is no secret that North Korean embassies are income-generating units at the very heart of a global enterprise geared to earning hard-currency for the regime and procuring parts and equipment for its weapons development programme. North Korean embassies routinely engage in smuggling, money laundering and the resale of duty-free items, operate restaurants and provide contract North Korean workers to generate the hard currency that the regime so desperately needs.

Supportive but less than diligent 

Malaysia has always been supportive of UN sanctions against North Korea despite having better than normal relations with Pyongyang. In fact, as a non-permanent member of the UNSC at the time, Malaysia voted in favour of the 2016 sanctions resolution.

Malaysia also enacted a number of laws such as the Strategic Trade Act (2010) to prevent the export, trans-shipment and brokering of strategic items. In addition, the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (2001) empowers the Home Ministry to give effect to resolutions adopted by the UNSC.

However, as it now turns out, Malaysia appears to have been less than diligent in ensuring appropriate compliance with UN sanctions. Although Malaysia has angrily denied it, its record of enforcing sanctions against North Korea has been spotty at best.

While it took steps to terminate air services with Pyongyang in 2014 in accordance with UN sanctions, and interdicted a shipment of weapons in 2011, generally lax oversight has enabled North Korea to construct a sophisticated network of activities in Malaysia that has undoubtedly helped it circumvent UN sanctions.

Several North Korean companies including GLOCOM, KOMID (Korea Mining Development Trading Corporation), OMM (Ocean Maritime Management), Green Pine, Korea Chonbok Trading Corporation, International Golden Services, International Global Systems and MKP (Malaysia Korea Partners) Group were able to set up operations in Malaysia or take advantage of Malaysia’s openness to carry out its activities here.

Companies like International Golden Services, International Global Systems and OMM were on the UN watch list and countries were asked to freeze their assets and expel their officers.

The MKP Group, another North Korean company now in the spotlight, set up shop here as far back as 1998, registering at least eight other shell companies under the MKP name over the ensuing years. A number of these companies shared the same address as well as the same directors (including a local business luminary with the title of Tan Sri).

Even though a simple search of the Companies Commission database would have exposed the North Korean connection, they were able to operate freely until now.

North Korea was also reportedly able to route some of its prohibited shipments including missile and tank parts, gyroscopes and magnetometers via Port Klang.

In addition, North Korea was reported to have used Malaysian banks to access the international banking system in violation of UN sanctions. In 2014, North Korean agents were also caught trying to transport USD 450,000 in cash at KLIA. Instead of seizing the cash and expelling the agents as required, the money was returned to the North Koreans.

The employment of over 300 North Korean mine workers on a government-to-government basis should also never have been allowed. Quite apart from the fact that they are nothing more than slave labour working under dangerous conditions, the foreign exchange earned by them goes directly to supporting the regime and its military programmes. It violates the spirit if not the letter of UN sanctions.

So great was the concern that Malaysia was not doing enough to enforce UN sanctions that US Sanctions Coordinator Philip Goldberg and US Undersecretary for Treasury David Cohento travelled to Malaysia in 2009 and 2013 respectively to discuss US concerns and encourage Malaysia to do more.

Greater vigilance needed

Clearly, as the UN sanctions panel noted, implementation of UN sanctions by member states remain “insufficient and highly inconsistent.”

In Malaysia’s case, our less than diligent enforcement is simply a failure to give the matter the kind of serious attention that it deserves, to match actions with the lofty foreign policy statements we so often make about how seriously we take our international obligations.

The creation of an effective sanctions office to coordinate compliance across the different agencies involved – the Strategic Trade Secretariat of the Ministry of International Trade and Industry, the Atomic Energy Licencing Board, the Pharmaceutical Services Division of the Ministry of Health, the Companies Commission, the Securities Commission, Ministry of Transport, Port Authority, Airport Authority, Treasury, Bank Negara, Home Affairs, Police, Customs and Wisma Putra – is also long overdue.

Whatever it is, it is now incumbent on the government to take urgent measures to close the loopholes that have allowed North Korea to operate here with such ease. It is the least we can do to help rein in the rogue regime in Pyongyang.

[Dennis Ignatius | Kuala Lumpur | 27th March 2017]