Photo: /ritzau/AP/Wong Maye-E
It is not acceptable for subsidiaries in major international transport companies to claim that they did not know what they were transporting when the case involves illegal products from nations under a UN arms embargo such as North Korea, New York-based Enrico Carisch tells ShippingWatch.
Carisch has for years served as UN sanctions monitor and is now advising member states and companies on more effective sanctions implementation practices.
His comment relates to a Maersk-owned company’s transport of components for long-range missiles from North Korea.
Using the term machine parts is the oldest trick in the book of arms smugglers. Without further specifications these parts could be for anything – from a toaster to ballistic missiles”
Several reports from 2016 and 2017 compiled by a special Panel of Experts under the UN Security Council list a Chinese company (New Times International Transport Service, NTS) under the Maersk Group logistics company Damco as responsible for a shipment of missile components as part of an illegal arms deal between North Korea and Egypt back in 2013.
A total of 11 parcels were sent from Beijing to Cairo on board a plane, and the seller was the North Korean regime, while the buyer was the Egyptian military. The transaction was halted when authorities in an unnamed country got suspicious and seized the cargo en route.
Freight documents list the sender of 11 parcels with its address registered at the North Korean embassy in Chinese capital Beijing and identify the contents with “Machine spare parts/Relay” without further details added.
Company remained silent
“There are really two aspects of this case which are troubling. It appears that whatever due diligence was performed it was not effective, and two, the company has remained completely silent rather than taking proactive steps and being transparent about the circumstances of the case,” says Enrico Carisch:
“Using the term machine parts is the oldest trick in the book of arms smugglers. Without further specifications these parts could be for anything – from a toaster to ballistic missiles. Freight Forwarders and many international transporters do face very difficult due diligence challenges because they must trust their clients’ information about the content of the shipments. Understandably, not every package can be inspected – leaving always a residual risk that the Forwarder inadvertently assists with sanctions violations, or other criminal activities.”
He notes that companies as well as the international community need to find more effective compliance mechanisms to reduce these risks as much as possible.