Russia Takes Over Kurds Oil Pipeline, Hillary?

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LONDON/MOSCOW (Reuters) – Russia’s biggest oil company, Rosneft (ROSN.MM), has agreed to take control of Iraqi Kurdistan’s main oil pipeline, boosting its investment in the autonomous region to $3.5 billion despite Baghdad’s military action sparked by a Kurdish vote for independence.

The move appears to be part of a strategy by President Vladimir Putin to boost Moscow’s Middle Eastern political and economic influence, which was weakened by the collapse of the Soviet Union.

Rosneft said it would own 60 percent of the pipeline, with current operator KAR Group retaining 40 percent. Sources familiar with the deal said Rosneft’s investment in the project was expected to total about $1.8 billion.

That comes on top of $1.2 billion that the Russian firm, which has struggled to raise Western loans due to U.S. sanctions, lent Kurdistan earlier this year to help fill holes in its budget. Rosneft also agreed to invest another $400 million in five exploration blocks. More here

You remember Rosneft right? That Russian oil conglomerate that donated big dollars to the Clinton Foundation during the Uranium One deal and even the NYT’s reported it.

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(Reuters) – A senior Iranian military commander repeatedly warned Kurdish leaders in northern Iraq to withdraw from the oil city of Kirkuk or face an onslaught by Iraqi forces and allied Iranian-backed fighters, Kurdish officials briefed on the meetings said.

Major-General Qassem Soleimani, commander of foreign operations for Iran’s elite Revolutionary Guards, traveled to Iraq’s Kurdistan region to meet Kurdish leaders at least three times this month before the Baghdad government’s lightning campaign to recapture territory across the north.

The presence of Soleimani on the frontlines highlights Tehran’s heavy sway over policy in Iraq, and comes as Shi’ite Iran seeks to win a proxy war in the Middle East with its regional rival and U.S. ally, Sunni Saudi Arabia.

Soleimani met leaders from the Patriotic Union of Kurdistan (PUK), one of the two main Kurdish political parties in northern Iraq, in the city of Sulaimania the day before Iraqi Prime Minister Haider al-Abadi ordered his forces to advance on Kirkuk, according to a PUK lawmaker briefed on the meeting.

His message was clear: withdraw or risk losing Tehran as a strategic ally.

“Abadi has all the regional powers and the West behind him and nothing will stop him from forcing you to return back to the mountains if he decides so,” the lawmaker quoted Soleimani as telling the PUK leadership.

The Iranian general evoked late Iraqi president Saddam Hussein’s massive attack on a Kurdish rebellion in 1991, when almost the entire Kurdish population fled northern Iraq to the mountains, the PUK lawmaker said.

“Soleimani’s visit … was to give a last-minute chance for the decision-makers not to commit a fatal mistake,” said the lawmaker, who like others interviewed in this story declined to be identified because of the sensitivity of the issue.

Commanders of the Iraqi Kurdish forces, known as the Peshmerga, have accused Iran of orchestrating the Shi’ite-led Iraqi central government’s push into areas under their control, a charge senior Iranian officials have denied.

But Iran has made no secret of its presence in Iraq.

“Tehran’s military help is not a secret anymore. You can find General Soleimani’s pictures in Iraq everywhere,” said an official close to Iranian President Hassan Rouhani.

“Now, beside political issues, Kirkuk’s oil is a very key element for Iran, which is an OPEC member. Control of those oil fields by Iran’s enemies would be disastrous for us. Why should we let them enter the oil market?.”

“THERE WILL BE CONFLICT”

Kirkuk fell to Iraqi government forces on Monday. Their offensive followed a referendum last month in which the semi-autonomous Kurdistan region voted to secede from Iraq against Baghdad’s wishes.

Kurds have sought an independent state for almost a century, after colonial powers divided up the Middle East after the fall of the Ottoman Empire and left Kurdish-populated territory split between Turkey, Iran, Iraq and Syria.

But Iraq’s two main Kurdish parties have been at odds over both the referendum and the approach to the crisis in Kirkuk, which the Kurds consider to be the heart of their homeland.

The PUK, a close ally of Iran, accused its rival, the Kurdistan Democratic Party (KDP), of putting the Kurds at risk of military intervention and isolation by pushing hard for the vote, which won wide approval for independence.

Soleimani has been allied to the PUK for years, but the referendum has drawn him even closer to Kurdish politics and expanded Iran’s reach in Iraq beyond the Baghdad government.

The Iranian general is no stranger to conflicts in Iraq, which fought an eight-year war with Iran in the 1980s. He has often been seen in footage from the frontlines, and Iran has long helped Baghdad to carry out its military strategy through paramilitary Shi’ite militias which it funds and arms.

Before the referendum, Soleimani suggested to Kurdish leaders that holding a vote on secession — which Iran feared would encourage its own Kurdish population to agitate for greater autonomy — would be risky.

“The Iranians were very clear. They have been very clear that there will be conflict, that these territories will be lost,” said one prominent Iraqi Kurdish politician who met Soleimani ahead of the Sept. 25 referendum.

On Oct. 6, barely a week after the vote, Soleimani attended the funeral of PUK leader Jalal Talabani. Again, he wanted to make sure even his closest Kurdish allies understood the dangers of not withdrawing from Kirkuk, officials said.

A senior Iranian diplomat in Iraq and an official in Iran close to Supreme Leader Ayatollah Ali Khamenei’s office said Soleimani met with Kurdish leaders after Talibani’s funeral and urged them to withdraw from Kirkuk and in exchange Tehran would protect their interests.

Soleimani met with one of Talabani’s sons, Bafel, a few days after his father was buried, one of the PUK officials said.

“Soleimani said Abadi should be taken very seriously. You should understand this,” the official said.

An Iranian source in Iraq said Soleimani was in Kirkuk two nights before the Iraqi government offensive for “a couple of hours to give military guidance.” Iraqi intelligence sources said Tehran sent a clear signal to the PUK.

“We understand from our sources on the ground that neighboring Iran played a decisive role in making the PUK chose the right course with Baghdad,” one Iraqi intelligence official told Reuters.

KURDISH DIVISIONS

Tensions over the referendum and Kirkuk have deepened divisions between the two main political parties in northern Iraq. The KDP accused the PUK of betraying the Kurdish cause by capitulating to Iran and striking a deal to withdraw.

“The Talabani clan were behind the offensive on Kirkuk. They asked Qassem (Soleimani) for help and his troops were there on the ground,” said a source close to Massoud Barzani, president of the Kurdistan Regional Government and head of the KDP.

“It is becoming clear that Iran is directing the operations to destroy the KDP.”

The PUK strongly denies this. Talabani’s son Bafel accused the KDP of missing a zero-hour chance to avoid losing Kirkuk by failing to reach a deal over a military base which Iraqi government forces had demanded to take back.

“Unfortunately we reacted too slowly. And we find ourselves where we are today,” Bafel told Reuters.

Two other Kurdish political sources gave a similar account.

Iran and Soleimani offered early assistance to northern Iraq’s Kurds in the fight against Islamic State, a rallying point for the Kurdish community. But after the devastating loss of Kirkuk, Iraqi Kurds have been left disillusioned.

“They (both PUK and KDP leaders) just make decisions on their own and play with people’s lives. In the end, we pay the price,” said pensioner Abdullah Ahmed in Sulaimania.  “This is a disaster for everyone. Everyone was united against Daesh (Islamic State). Now they are back just looking out for themselves.”

 

Under 9/11 Edit Air Force Can Recall 1K Retired Pilots

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President Bush signed the Executive Order under the emergency powers act to recall retired officers. Other presidents have done the same. President Trump amended GW Bush’s executive order removing the caps of 25.

***

WASHINGTON (AP) — The Air Force says it doesn’t plan on using new flexibility under an executive order signed by President Donald Trump to address a pilot shortage by recalling retired pilots.

Ann Stefanek, the chief of Air Force media operations, said Sunday the added power provided by Trump is appreciated but the Air Force does not “currently intend to recall retired pilots.”

*** There still is a major issue with the number of flight ready aircraft and the shortage of Predator drones including drone controllers.

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The Trump administration is giving the Air Force the option to return through voluntary programs as many as 1,000 retired pilots to active-duty service, the Pentagon announced.

Through an executive order signed Friday, the measure gives the service more leverage as it attempts to combat the growing pilot shortage in its ranks.

“The Air Force is grateful for additional authority as it works to address its pilot shortage,” Air Force spokeswoman Erika Yepsen said in a statement.

“We can’t provide specific details about how we will implement this new authority until we receive guidance from the secretary of defense [Jim Mattis],” Yepsen said.

“However, as the Air Force pursues a variety of initiatives to counter the shortage, it will take care to balance new accessions with voluntary programs for retired and senior pilots to ensure the service maintains a balance of experienced aviators throughout the coming years,” she said.

Officials stress that returning to active duty is strictly voluntary, and the service does not intend to implement a stop-loss measure.

“This is an amendment to an existing authority we already had,” an Air Force official told Military.com on background Friday.

“We have authorities for a whole bunch of things — doesn’t mean we use them,” the official said during a telephone call.

And the measure may not be as advantageous as it may seem.

“To recall pilots to active duty, we have a zero sum game … the training pipeline is finite,” the official said.

“A [pilot] training seat is a training seat. I don’t think this will do us some good unless you can bring people on for staff jobs [too],” the official said.

That’s because — even with the latest measure — the service doesn’t intend to put older pilots back in the cockpit.

“We can’t get 20-plus years out of an old guy the way you could with a new guy,” the official said.

Air Force Secretary Heather Wilson and Chief of Staff Gen. David Goldfein have said the service was 1,555 pilots short by fiscal 2016, including 1,211 total force fighter pilots.

As a result, the Air Force laid out plans earlier this month to welcome back retired pilots into active-duty staff positions.

The service, through the Voluntary Retired Return to Active Duty Program, or VRRAD, encourages pilots who had held a job in the 11X career field to apply before Dec. 31, 2018.

In an effort to address the increasing pilot shortage, Wilson in July signed off on the program, which aims to fill flight staff positions with those who have prior pilot experience and expertise, thus allowing active-duty pilots to focus on training and missions.

Pilots under the age of 60 who retired within the last five years in the rank of captain, major or lieutenant colonel can apply for VRRAD. The Air Force wants to fill 25 positions for an active-duty tour of one year.

Other initiatives the service is — and has repeatedly been — trying: bonuses.

The Air Force this summer announced it is increasing its flight incentive pay and aviation bonus programs — with bonuses of up to $455,000 over 13 years for some fighter pilots.

The bulk of initiatives come at a time when the Air Force is losing many pilots to the commercial aviation industry.

IAEA not Allowed to Inspect Iran Sites per Moscow

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But Obama and Kerry told us they could….is there more than one version of the JCOA?

As the Trump administration calls for stricter monitoring of the Iranian nuclear agreement, officials in Iran insist they are complying with its terms and will not allow international inspectors into military sites.

Iran, which agreed in 2015 to grant inspectors broad access to nuclear-related facilities in exchange for the removal of severe economic sanctions, accuses President Trump of trying to sabotage what he has called the United States’ “worst deal.”

Trump has argued that Iran is violating the agreement struck under President Obama, although he has offered no evidence to support his claim and his administration has twice certified to Congress that Iran is in compliance.

But Trump administration officials looking for a way to increase pressure on Iran have begun to zero in on military facilities that they say could be used for nuclear-related activities barred under the agreement.

The IAEA, in its most recent report in June, said Iran was meeting its obligations under the pact. Experts say inspectors rely on intelligence reports and other information to determine whether sites they have not visited are being used for potentially illicit purposes. More here.

*** What about those snapback sanctions Obama told us about? The NYT’s wrote that the snapback sanctions were easy. What is the response of those American lobby groups that Obama hired on behalf of the Iran deal.

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***

Map of Iran's nuclear sites photo and more on each location courtesy of BBC

Inspectors with the International Atomic Energy Agency, the United Nations organization tasked with monitoring Iran’s nuclear facilities, have not requested access to military sites since the agreement went into effect, according to experts monitoring the process.

The Russian Deputy Foreign Minister refers to Section T – while ignoring that, as the Former Deputy Director General of the IAEA, Olli Heinonen notes, the IAEA has the authority under UN Security Council resolution 2231 to request access to sites and equipment associated with Section T.

This resolution “requests the Director General of the IAEA
to undertake the necessary verification and monitoring of Iran’s
nuclear-related commitments for the full duration of those commitments under
the JCPOA.” In addition, the resolution states: “The International Atomic
Energy Agency will be requested to monitor and verify the voluntary
nuclear-related measures as detailed in this JCPOA.”
An excerpt from his article follows the TASS item.]

Fuss around IAEA inspections of Iranian military facilities contrived –
Russian diplomat
If the other participants are eager to discuss the issue, Moscow “will be
ready to discuss it” presenting its stance, Sergei Ryabkov said
Russian Politics & Diplomacy
October 22, 0:10 UTC+3
http://tass.com/politics/971962

 

MOSCOW, October 22. /TASS/. Certain countries substitute notions in talks on
expanding inspections of the International Atomic Energy Agency (IAEA) at
the Iranian military facilities creating contrived fuss around the issue.
However, Russia says that the IAEA is not authorized to carry out such
inspections, Russian Deputy Foreign Minister Sergei Ryabkov told TASS on
Saturday.

“I would like to say absolutely clear and directly that acquiring some false
topicality the theme of the IAEA work on Section T (about Iran’s military
facilities – TASS) of the Joint Comprehensive Plan of Action (JCPOA) over
the Iran nuclear program has no topicality for us although it is a talking
point now,” he said.

In particular, Moscow says that the IAEA “has not been authorized to carry
out such inspections and cannot be tasked because Section T highlights the
issues out of the agency’s competence,” Ryabkov said.

“Nevertheless, we can hear another thing. As in the issue of the Iran
missile program, some of our counterparts prefer to call black white and
vice versa,” the high-ranking diplomat said. “We cannot get them to
understand this evident logic and obvious truth.”

“Since they are insisting, we say if you cannot do without discussions on
the theme, it should be raised at the Joint Commission when the next session
is convened,” Ryabkov said.

If the other participants are eager to discuss the issue, Moscow “will be
ready to discuss it” presenting its stance, he said.

JPCOA and US

On July 14, 2015, Iran and six international mediators (the United Kingdom,
Germany, China, Russia, the United States, and France) reached a deal on
Iran’s nuclear program. On January 16, 2016, the parties to the deal
announced beginning of its implementation. Under the deal, Iran undertakes
to curb its nuclear activities and place them under total control of the
International Atomic Energy Agency (IAEA) in exchange of abandonment of the
sanctions imposed previously by the United Nations Security Council, the
European Union and the United States over its nuclear program.

Last week, US President Donald Trump announced Washington’s new strategy
against Teheran. Thus, it says that the United States will seek to offset
Iran’s destabilizing influence and will call on the international community
to get consolidated for exerting pressure on Iran’s Islamic Revolutionary
Guard (IRGC, Iran’s most powerful security and military organization). Apart
from that, the US blacklisted the IRGC as an organization supporting
terrorism. Donald Trump refused to confirm Iran observed the agreement on
the nuclear program and promised changes to the document.
========================
Verifying Section T of the Iran Nuclear Deal: Iranian Military Site Access
Essential to JCPOA Section T Verification
by David Albright and Olli Heinonen
August 31, 2017
http://isis-online.org/isis-reports/detail/verifying-section-t-of-the-iran-nuclear-deal
…
The IAEA has the authority under UN Security Council resolution 2231 to
request access to sites and equipment associated with Section T. This
resolution “requests the Director General of the IAEA to undertake the
necessary verification and monitoring of Iran’s nuclear-related commitments
for the full duration of those commitments under the JCPOA.” In addition,
the resolution states: “The International Atomic Energy Agency will be
requested to monitor and verify the voluntary nuclear-related measures as
detailed in this JCPOA.”
…
Recommendations

 

The United States should assemble, if it has not already done so, its own
lists of equipment and locations relevant to Section T. It should also
prepare lists suitable for sharing with the IAEA or Joint Commission.
Similarly, U.S. allies should share relevant information with the IAEA. If
it has not done so, the IAEA should create a baseline of Section T
activities and equipment.

The United States and its allies should press the IAEA to develop and
establish an effective, credible verification regime under Section T that
includes requests to access military sites. The United States and the EU3
should also raise Section T and the likely need for approvals of such
equipment and activities by Iran at the next Joint Commission meeting.
Toward that goal, Iran should declare to the IAEA its sites and equipment
subject to Section T verification and approvals.
========
Olli Heinonen is Former Deputy Director General of the IAEA and head of its
Department of Safeguards. He is a Senior Advisor on Science and
Nonproliferation at the Foundation for Defense of Democracies.

N Korea Months Away from Ability to Strike U.S with Nukes

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Japan is taking defensive measures:

The Yomiuri ShimbunThe government is considering equipping planned ground-based Aegis Ashore systems with the capacity to intercept cruise missiles, in addition to the ability to defend against ballistic missiles.

With Chinese bombers making repeated flights in areas around Japan, the government believes it should also prepare for attacks by cruise missiles, multiple government sources said.

The government intends to introduce two Aegis Ashore systems in Japan by around fiscal 2023 as part of the effort to boost the nation’s missile defenses.

These would be equipped with SM-3 Block IIA missiles, a new interceptor being jointly developed by Japan and the United States with the capacity to intercept ballistic missiles at altitudes exceeding 1,000 kilometers.

The government is also considering equipping the systems with SM-6 anti-air missiles, which are multifunction interceptors that also can take down cruise missiles.

United Nations (AP) — North Korea’s deputy U.N. ambassador said Tuesday the country plans to launch many more satellites and accused the United States of trying to block its efforts to help peacefully develop outer space.

Kim In Ryong told a U.N. General Assembly committee meeting on “International Cooperation in the Peaceful Uses of Outer Space” that the country’s five-year plan for 2016-2020 includes development of “practical satellites that can contribute to the economic development and improvement of the people’s living.”

As a party to several space treaties, North Korea’s space development activities are “all ground on legal basis in all aspects,” Kim said.

But he said the United States is “going frantic to illegalize our development of outer space,” claiming the effort violates U.N. sanctions.

“The U.S. is the country that launched the largest number of satellites and yet it claims that our launch of satellites is a threat to international peace and security,” Kim said. “This is a preposterous allegation and extreme double standards.”

The United Nations, the U.S. and other countries view the North’s space launch development project as a cover for tests of missile technology, as ballistic missiles and rockets in satellite launches share similar bodies, engines and other technology. North Korea is also openly working on developing nuclear-armed missiles capable of striking the U.S. mainland.

US: North Korea Months Away From Being Able to Hit US with Nuclear Missile

WASHINGTON — 

North Korea is likely just months away from being capable of striking the United States with a nuclear missile, according to two top U.S. officials.

CIA Director Mike Pompeo told a forum in Washington on Thursday he is “deeply worried” about the advancing threat from North Korea and the possibility it could spark a nuclear arms race across East Asia.

“We ought to behave as if we are on the cusp of them achieving that objective,” Pompeo said when asked about Pyongyang’s pursuit of missile technology that could launch a warhead to targets in the U.S.

“They are so far along in that it’s now a matter of thinking about how do you stop the final step?” he added.

McMaster: We’re running out of time

U.S. National Security Adviser, Gen. H.R. McMaster said later on Thursday that Washington was racing to resolve the situation, short of using military force.

“We’re not out of time but we’re running out of time,” McMaster said, speaking at the same event. “Accept and deter is unacceptable.”

The comments by Pompeo and McMaster come as tensions between the U.S. and North Korea have been steadily rising following Pyongyang’s latest nuclear test last month, it’s sixth overall, and repeated tests of what intelligence officials have assessed to be both intermediate and long range ballistic missiles.

But despite warning that North Korea is just months away from being able to target the U.S., the CIA’s Pompeo cautioned there are still questions about just how “robust” the North Korea nuclear threat has become, and whether Pyongyang will be able to deliver multiple nuclear warheads to nuclear targets.

“There’s always a risk. Intelligence is imperfect,” Pompeo said, adding there is evidence Pyongyang may be getting help from Iran, citing “deep conventional weapons ties as between the two countries.”

He also warned that each North Korean test makes an arms race ever more likely.

“You watch as North Korea grows ever closer to having its capability perfected, you can imagine others in the region also thinking that they well may need that capability,” he said.

 

 

Putin suggests force won’t work against North Korea

On Thursday, Russian President Vladimir Putin warned against the use of force to eliminate the North Korean nuclear threat, suggesting it would not work.

“Talks about a preventative, disarming strike — and we hear both hints and open threats — this is very dangerous,” Putin said during a speaking engagement in Sochi.

“Who knows what and where is hidden in North Korea? And whether all of it can be destroyed with one strike, I doubt it,” he said. “I’m almost sure it is impossible.”

North Korean officials have also repeatedly warned the U.S. against any provocations.

Pyongyang’s deputy envoy to the United Nations, Kim In Ryong, warned Monday that war could break out at any moment.

Other North Korean officials have accused the U.S. of making preparations for war, citing the presence of the USS Ronald Reagan, a nuclear-powered aircraft carrier, conducting exercises to the east of the Korean Peninsula.

 

Anyone From the U.S. Mentioning this to China’s President Xi?

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Remarkable site and well on top of this issue, for the summary go here.

Primer:

Out of a list of 57 companies accused by U.N. investigators of aiding North Korea, 43 of them haven’t been sanctioned by Treasury.

One of them is Glocom, a firm also known as Pan Systems Pyongyang Branch, a North Korean company based in Malaysia that investigators say uses a series of front companies and agents to procure components and sell communications systems in violation of U.N. sanctions. Pan Systems and another associated firm, Wonbang Trading Co., are operated by North Korea’s intelligence service, the Reconnaissance General Bureau, the U.N. says. Wonbang has also been one of the largest shippers of North Korea coal and Glocom has been investigated for arms shipments. Glocom, which maintains a website, didn’t respond to repeated requests for comment on the allegations.

Another network cited by the U.N. is a transport firm named Vast Win Trading, whose ship, the Jie Shun, was seized in Egypt last year with 30,000 rocket-propelled grenades. The owner of that ship, Chinese national Sun Sidong, has business ties to a network owned by Chinese national Chi Yupeng through a shared email address in China’s business registry, according to the nonprofit group, C4ADS, that monitors global threats. U.S. Attorneys and Treasury have already targeted the Chi Yupeng network with sanctions and seized funds. Mr. Sun’s network of companies has remained so far untouched. In August, Mr. Sun sold his $1.3 million home in Great Neck, N.Y., for cash, according to his real-estate agent. Mr. Sun couldn’t be reached through his U.S.- and U.K.-based companies or through an individual identified as his lawyer in New York property records.

One of his companies, Dandong Dongyuan Industrial Co. Ltd., is the largest exporter of what’s called “dual use” equipment that can include navigation systems and guidance devices that can be used for ballistic missiles, according to C4ADS. Mr. Sun is also the CEO of Dongyuan Enterprise, a Flushing, N.Y., firm.

U.N. investigators named several banks in North Korea that were established, managed or owned by Chinese firms. First Eastern Bank in Rason, North Korea, owned by Unaforte Hong Kong, was set up to provide loans to Chinese individuals and companies, for example. More here.

DoJ: On Aug. 3, 2016, a U.S. Magistrate Judge Joseph A. Dickson of the District of New Jersey signed a criminal complaint charging Ma Xiaohong (Ma) and her company, Dandong Hongxiang Industrial Development Co. Ltd. (DHID), and three of DHID’s top executives, general manager Zhou Jianshu (Zhou), deputy general manager Hong Jinhua (Hong) and financial manager Luo Chuanxu (Luo), with conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and to defraud the United States; violating IEEPA; and conspiracy to launder monetary instruments.

Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) also imposed sanctions on DHID, Ma, Zhou, Hong and Luo for their ties to the government of North Korea’s weapons of mass destruction proliferation efforts.

In addition, the department filed a civil forfeiture action for all funds contained in 25 Chinese bank accounts that allegedly belong to DHID and its front companies. The department has also requested tha the federal court in the District of New Jersey issue a restraining order for all of the funds named in the civil forfeiture action, based upon the allegation that the funds represent property involved in money laundering, which makes them forfeitable to the United States. There are no allegations of wrongdoing by the U.S. correspondent banks or foreign banks that maintain these accounts.

“The charges and forfeiture action announced today allege that defendants in China established and used shell companies around the world, surreptitiously moved money through the United States and violated the sanctions imposed on North Korea in response to, among other things, its nuclear weapons program,” said Assistant Attorney General Caldwell. “The actions reflect our efforts to protect the integrity of the U.S. banking system and hold accountable those who seek to evade U.S. sanctions laws.”

***

For context:

Hong Kong (CNN)Easey Commercial Building is an unassuming mid-rise office tower on Hennessy Road, an artery that runs through Hong Kong’s busy Wan Chai district. The structure sits among scenery that’s classic Hong Kong: bright lights, tall buildings, people rushing about.

But camouflaged in the normalcy is a business that seemingly exists in name only.
Take the elevator to the Easey building’s 21st floor, and in room 2103 is the registered office of Unaforte Limited Hong Kong. It’s a company accused by the United Nations of violating sanctions on the Democratic People’s Republic of Korea (North Korea’s official name) for helping the country make money internationally, funding everything from its nuclear weapons program to the lavish lifestyles of North Korean Supreme Leader Kim Jong Un and Pyongyang’s most important players.
At least, Unaforte is supposed to be there. That is the address listed on its publicly available corporate filings provided to the Hong Kong government. When CNN visited the office, it found neither Unaforte nor its listed company secretary, Prolive Consultants Limited.
Instead, room 2103 was home to a seemingly unrelated company: Cheerful Best Company Services. Only one man was there when CNN stopped by, and he said a representative for Prolive Consultants only comes by every so often to pick up mail. He had not heard of Unaforte.
The United Nations Panel of Experts on North Korea — the body charged with monitoring sanctions enforcement on the hermit nation — said in two recent reports that Unaforte opened and owned a bank in the North Korean city of Rason. That is likely a violation of the latest UN Security Council resolution banning joint international ventures with North Korea, according to Christopher Wall, a lawyer who specializes in international trade law and a partner at Pillsbury Winthrop Shaw Pittman in Washington, DC.
North Korea is believed to use these types of practices to cover up much of its trade, from selling coal and fuel to exporting weapons.
“The (North Korean) regime accesses the international financial system through front companies and other deceptive financial practices in order to buy goods and services abroad,” Sigal Mandelker, the undersecretary for terrorism and financial intelligence at the US Department of the Treasury, said in Senate testimony on September 28.
Hong Kong is one of two business jurisdictions (along with the British Virgin Islands) where the UN Panel of Experts on North Korea has seen the largest share of North Korean-controlled front companies operating, said Hugh Griffiths, the panel’s coordinator.
When Unaforte’s company particulars show up in Hong Kong’s publicly available corporate records, the name of just one individual appears. He holds a passport from the small Caribbean island of Dominica. A passport number is there, but not a phone number.
Those details shed light on Hong Kong’s incorporation requirements. To start a company in Hong Kong, one needs at least one director (has to be an actual person) and a company secretary (which can either be a person or another company, but must be based in Hong Kong), according to the Companies Registry website.
Companies that are sanctioned in most cases cannot easily conduct transactions in the dollar, as US banks have to back those deals and would filter and flag sanctioned entities, Anthony Ruggiero, an expert in the use of targeted financial measures at the Foundation for the Defense of Democracies, told CNN.
The DHID charges revealed that to get around US prying eyes, North Korea uses a complex ledger and credit scheme to hide North Korea’s involvement in dollar transactions, Ruggiero explained to Congress in September.
Thirteen of DHID’s front companies were located in Hong Kong. Eleven shared the same registered address in Wan Chai, less than a kilometer away from the Easey Commercial Building, the indictment said. Read more here from CNN.