P&I Club

Update Volume 2020/17 Update: Democratic People's Republic of Korea - enforcement of sanctions

Published on 14 may 2020

Further to the United Nations' recently published Sanctions Report 2019/2020, we inform members as follows regarding the sanctions applicable to North Korea.

The report concludes that North Korea is not taking the required steps to end its nuclear program. The strict sanctions therefore remain in force. In addition, it is noted that maritime transport is one of the main ways for the regime to import raw materials. The advice to shipping companies is to take into account stricter supervision and enforcement and, if possible, to carefully monitor transport from or to North Korea for any sanction violations. The report mentions the fact that ship-to-ship freight transfers (STS) are commonly used to deploy automatic identification systems (AIS) and cargo to smaller vessels from North Korea. Member States are called upon to map the destination for relevant loads. Another trend identified by the UN was the exploitation of the scrap ship market, where larger bulk scrap ships were used for cargo transportation.

In light of the most recent UN report, the Club advises all members to ensure the highest level of due diligence to mitigate the risk of DPRK related activities. The penalties could lead to designation, asset freezing and listing in de OFAC, UN Sanctions List and/or European Consolidated Sanctions list. Any trade with North Korea will be monitored by regulatory agencies, including ship movements, using AIS and long range identification, satellite imagery and other means. Ships suspected of violating DPRK sanctions may be listed and / or searched and held in ports by the national authorities while investigations are conducted.

Consequences for insurance coverage

In addition to the fact that sanctions violations and the consequences thereof are excluded from cover, violations can also lead to a complete loss of cover. Even if a transaction is not sanctioned, it is likely to be impossible for the NNPC to assist a member in North Korea. We recommend avoiding transportation to and from North Korea altogether and taking all necessary precautions and carrying out checks on cargo which may be in any way linked thereto.

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