next Image 1 of 2 prev Image 2 of 2 The United States has made a highly unusual seizure of a huge North Korean cargo ship involved in banned coal transports. But it's nothing new for North Korea, which has long gone to extraordinary lengths to bypass crippling U.N. sanctions and earn the impoverished nation much-needed hard currency. The seizure, which was announced Thursday, comes at a delicate moment in U.S.-North Korean ties, with North Korea resuming weapons tests that seem meant to force the United States to ease sanctions. Whether it worsens those ties could depend on if, as some experts believe, the North continues finding ways to evade the international sanctions on its exports. Here's an examination of the seizure of the Wise Honest, the North's second largest cargo ship, and how it fits into North Korea's alleged illicit pursuit of hard currency: ___ THE INONESIAN CONNECTION Before the United States seized it, the 581-foot (177-meter) ship was first detained by Indonesia in April 2018 while transporting a large amount of coal. North Korea is banned from exporting coal under U.N. sanctions toughened in 2017 to punish increasingly powerful weapons tests that year. Experts believe coal and other mineral exports help finance the North's weapons industry. Indonesia reported last September that the Wise Honest was registered under the jurisdictions of both North Korea and Sierra Leone, according to a March report by the United Nations Security Council. It said the ship sailed into Indonesian territorial waters with its Automatic Identification System turned off and "no report was made to the destined port authority for proper ship clearance." Justice Department lawyers on Thursday laid out the case for confiscating the ship in a complaint filed in New York. They said payments for maintenance and operation of the vessel were channeled through unwitting U.S. financial institutions in violation of American law. The U.N. report, citing Indonesian authorities, said the captain of the North Korean ship was subject to prosecution. But South Korean media reported Friday that all 25 North Korean crew members had apparently returned home. ___ GETTING SMATER AT EVADING SANCTIONS The Wise Honest is one of dozens of vessels North Korea has apparently used to deliberately evade international sanctions on coal exports and oil imports. The U.N. report said North Korea's illicit trade activities include rapidly growing ship-to-ship transfers of petroleum products and coal, and that those activities are meant to render U.N. sanctions ineffective. The report said North Korean vessels use advanced evasion techniques like identity theft, unlawful name-changing and sending false signals through a ship's AIS tracking device, which communicates the ship's location to other vessels, satellites and coastal base stations. The Wise Honest, which was transporting 25,500 tons of coal worth $2.99 million at the time of its impoundment in Indonesia, tried to avoid detection by illegally registering under the jurisdictions of two countries. The report said the ship was also sailing without hoisting a nationality flag. Indonesia named a South Korean company, Enermax, as the intended recipient of the Wise Honest's coal, which was to be moved ship-to-ship in the port city of Balikpapan on Borneo island. Enermax told South Korean investigators that there was no import of coal and that it had received an offer of Indonesia-origin coal from "someone who seemed to be a local broker in Indonesia." ___ WHAT COMES NEXT The U.S. seizure will anger North Korea, which sees a lack of U.S. rewards to match partial disarmament steps the North took last year. North Korea on Thursday fired two short-range missiles into the sea in the second such weapons launch in less than a week, according to Seoul and Washington. U.S. authorities might have taken action and seized the Wise Honest because they worried that Indonesia, which has maintained friendly ties with North Korea, was possibly going to return the ship to the North, said analyst Go Myong-Hyun of the Seoul-based Asan Institute for Policy Studies. In response, North Korea may strongly criticize the United States and conduct more weapons tests. But North Korea won't likely retaliate by seizing a U.S. ship because it wants to quickly get back the Wise Honest. "North Korea doesn't have many big ships it can use for exports. If this size of ship is seized and that seizure isn't lifted quickly, it would greatly damage North Korea," said analyst Cho Bong-hyun of Seoul's IBK Economic Research Institute. Similar seizures of North Korean cargo ships will likely happen again as North Korea will keep trying to find ways to evade sanctions that are badly hurting the country's already troubled economy, experts say. U.N. sanctions on the North have intensified since 2016, because the North conducted a series of high-profile nuclear and missile tests meant to build a nuclear missile capable of striking the U.S. mainland. Newer sanctions imposed a full ban on key exports like coal, textiles and seafood; significantly curtailed oil imports; and required all U.N. member states to repatriate all North Korean laborers based in their countries by this December. The United States may return the ship to North Korea if relations improve. "The U.S. action could be more like a warning aimed at preventing North Korea from violating sanctions again rather than not sending it back for good," Cho said.<doc-sep>The North Korean bulk cargo carrier formally seized by the United States this week could become an auction item or a training boat for Navy SEALS. The Wise Honest, North Korea’s second-largest cargo vessel, is on its way to American Samoa after federal prosecutors said Thursday that the ship was seized because it carried banned exports of North Korean coal. “Today’s civil action is the first-ever seizure of a North Korean cargo vessel for violating international sanctions,” U.S. attorney Geoffrey S. Berman said in a statement from the Justice Department. “Our Office uncovered North Korea’s scheme to export tons of high-grade coal to foreign buyers by concealing the origin of their ship, the Wise Honest," the statement continued. "This scheme not only allowed North Korea to evade sanctions, but the Wise Honest was also used to import heavy machinery to North Korea, helping expand North Korea’s capabilities and continuing the cycle of sanctions evasion. With this seizure, we have significantly disrupted that cycle. We are willing and able to deploy the full array of law enforcement tools to detect, deter, and prosecute North Korea’s deceptive attempts to evade sanctions.” The seizure begs the question: what does the US do with the 17,000 ton ship? As evidence of a criminal scheme to evade international sanctions, the ship is now an asset subject to forfeiture proceedings, federal prosecutors said. “Following the approval of the forfeiture by Court, the Attorney General may direct the disposal of the property by sale or any other commercially feasible means,” said Nicholas Biase, spokesman for the U.S. Attorney’s office for the Southern District of New York. Assets seized by the feds are often put up for sale at auction. If that’s what happens in this case, then the Wise Honest could be purchased and put back into service as a commercial ship. “Frankly, members of the American public could have an opportunity to buy it,” said Sharon Levin, a former federal prosecutor now in private practice at WilmerHale in New York. “Someone could buy it and turn it into a party boat or cruise ship and the money could ultimately go toward victims of terrorism.” Levin, the former chief of the Money Laundering and Asset Forfeiture Unit of the Southern District of New York, referred back to the sale of another large asset that had been used to help compensate terror victims: a skyscraper in New York City at 650 Fifth Avenue. The building had allegedly been owned by Iran and was seized in the largest terror-related civil forfeiture in U.S. history. A court-approved plan to sell the building calls for the proceeds to go to victims of Iranian state-sponsored terrorism. If there is no sale, the vessel could also be sunk or used by the Navy or another branch of the service for training, according to a source familiar with the case who was not authorized to speak publicly about it.<doc-sep>The Wise Honest was slowly towed to the port of Pago Pago during a cloudy Saturday morning and docked at the main docking section of the port that afternoon. A view from the top of a two story building in Fagatogo village overlooking the Port of Pago Pago, as the North Korean cargo ship, Wise Honest, docks at the main docking section of Pago Pago Harbor, Saturday, May 11, 2019, in Pago Pago, American Samoa. The North Korean cargo ship was seized by the U.S. because of suspicion it was used to violate international sanctions. It arrived Saturday at the capital of this American territory. (AP Photo/Fili Sagapolutele) The North Korean cargo ship, Wise Honest, middle, was towed into the Pago Pago Harbor on Saturday, May 11, 2019, in Pago Pago, American Samoa. On the right are vessels docked along the harbor. The Wise Honest was seized by the U.S. because of suspicion it was used to violate international sanctions. It arrived Saturday at the capital of this American territory. (AP Photo/Fili Sagapolutele) Honolulu based US Coast Guard public affairs officer, Amanda Wyrick poses for a photo at the shoreline village of Utulei, following an interview with The Associated Press. In the background, in the ocean, is the North Korean cargo ship, Wise Honest, towed into Pago Pago Harbor, in American Samoa, on Saturday, May 11, 2019. The North Korean cargo ship was seized by the U.S. because of suspicion it was used to violate international sanctions. (AP Photo/Fili Sagapolutele) The North Korean cargo ship, Wise Honest, middle, was towed into the Port of Pago Pago in the late morning on Saturday, May 11, 2019, in Pago Pago, American Samoa. The Wise Honest ship was seized by the U.S. because of suspicion it was used to violate international sanctions. It arrived Saturday at the capital of this American territory. (AP Photo/Fili Sagapolutele) PAGO PAGO, American Samoa — A North Korean cargo ship seized by the U.S. because of suspicion it was used to violate international sanctions arrived at the capital of this American territory, where it will undergo inspections. The Wise Honest was slowly towed to the port of Pago Pago during a cloudy Saturday morning and docked at the main docking section of the port that afternoon. The trip from Indonesia took about three weeks and American Samoa, in the South Pacific, was chosen because of “its central strategic location,” U.S. Coast Guard public affairs officer Amanda Wyrick said. “We also have a good strong relationship and partnership with the American Samoan government,” Wyrick said. “With that being said, we also already have the resources that are able to ensure the security of the vessel but most importantly the Port of Pago Pago.” Indonesian authorities detained the ship in April 2018. Justice Department officials announced Thursday the U.S. had seized the ship. Asked as to how long the ship will be in the territory, Wyrick said the U.S. Department of Justice is “leading the investigation so they will be conducting that. Upon the conclusion of the investigation, the ship will be moved.” But she said the next destination is unknown. “I do know that Justice Department is going to do the investigation as fast as they can,” Wyrick added. She said she didn’t have the exact number of U.S. Coast Guard personnel or people from other federal agencies who have traveled to American Samoa for the investigation. “We have a marine and safety security team here from Honolulu,” Wyrick said. “We’re conducting random patrols, also conducting inspection of the vessel and the Port of Pago Pago, keep an eye on things such as security breaches or vandalization of the ship itself.” Officials are also making sure the port is protected, she said. “We especially in the Coast Guard, we understand the importance of the port. It’s a lifeline in getting goods to the islands,” Wyrick said. “So we want to make sure that we’re doing everything we can, to make sure that there’s absolutely no disruption to the flow of commerce coming in and out.” The U.S. government dispatched an inspection team to the ship before it docked in Pago Pago, she said. Wyrick noted there was an inspection conducted before leaving Indonesia and, because the ship has been at sea for three weeks, “it’s subject to the elements.” “The inspection of the ship before entering the harbor is to make sure the structure integrity of the boat is still intact. In that way, once we get the thumb’s up, and the green light, and the inspectors deem it safe, then it will enter the port,” Wyrick said. U.S. officials made the announcement of the ship’s seizure hours after North Korea fired two suspected short-range missiles toward the sea, the second weapons launch in five days and a possible signal that stalled talks over its nuclear weapons program are in trouble.<doc-sep>
The U.S. has seized a North Korean freighter that was caught shipping coal in violation of U.N. sanctions, the Justice Department revealed Thursday. The 17,000-ton cargo ship, called the Wise Honest, was stopped in Indonesia last year after it was found to be carrying coal. The ship's captain was charged with violating Indonesian law, and last July, the U.S. filed an action to seize the ship, according to court papers. Federal prosecutors said the seizure marks the first time the U.S. has taken possession of a North Korean ship for violating international sanctions. "This sanctions-busting ship is now out of service," said John Demers, assistant attorney general for the Justice Department's National Security Division. The Wise Honest, North Korea's second-largest ship for carrying bulk cargo, was on its way to American Samoa, U.S. officials said. On Thursday, the Justice Department asked a federal judge to give the U.S. ownership of the vessel through a civil forfeiture action — the same thing prosecutors do when they seek to take ownership of planes or boats used by drug smugglers. The Justice Department says the U.S. is entitled to take this action because payments to maintain and equip the vessel were made through American banks. "Our office uncovered North Korea's scheme to export tons of high-grade coal to foreign buyers by concealing the origin of their ship, the Wise Honest," said Geoffrey Berman, U.S. Attorney for the Southern District of New York. "This scheme not only allowed North Korea to evade sanctions, but the Wise Honest was also used to import heavy machinery to North Korea, helping expand North Korea’s capabilities and continuing the cycle of sanctions evasion." The North Korean ship, "Wise Honest." Department of Justice The announcement of the seizure came just hours after North Korea launched suspected short-range missiles — the second such weapons test in a week. But Berman said the effort to take control of the Wise Honest had been in the works for some time and was not spurred by North Korea's overnight actions. The Justice Department said the Korea Songi Shipping Company used the Wise Honest from at least November 2016 through April 2018 — and broke American law by paying U.S. dollars to "unwitting" banks for several improvements, equipment purchases and service expenditures for the vessel. The March 2018 cargo shipment yielded payments totaling more than $750,000, the Justice Department said. Berman declined comment when asked if the heavy machinery shipped back to North Korea was used in the country's weapons program. The seizure follows a report in March by a U.N. panel of experts that found North Korea is successfully evading United Nations sanctions through elaborate smuggling and deceptive tactics, allowing the regime to import oil and ship coal to China and other countries. The sanctions are designed to deprive Pyongyang of cash for its nuclear weapons and ballistic missile programs and force the regime to abandon its arsenal. The Trump administration has led international efforts to tighten sanctions against North Korea, vowing to impose “maximum pressure” to persuade North Korea agree to relinquish its weapons in return for an end to sanctions. "These violations render the latest United Nations sanctions ineffective by flouting the caps on the import of petroleum products and coal oil" by North Korea imposed by the U.N. Security Council in 2017, according to the U.N. report. "These transfers have increased in scope, scale and sophistication," it said. Download the NBC News app for breaking news and politics Despite U.S. warnings to keep up the economic pressure on North Korea, the regime has not suffered a spike in fuel prices in recent months, a sign that analysts say shows the country is able to secure enough fuel to keep its economy afloat. North Korea has adapted to sanctions over the years and now employs increasingly sophisticated methods, the U.N. panel found in its March report. Pyongyang used to alter sections of shipping documents but now creates entirely fake registration and other papers that enable it to smuggle illicit cargo through ports around the world. The regime also steals the identities of other ships and spoofs the location of vessels on the global electronic tracking system for ships, according to the U.N. panel.