5 Takeaways From Investigating Covert Oil Deliveries to North Korea

North Korea continues to illicitly import oil, in violation of strict international sanctions. The New York Times Visual Investigations team and Times reporters across Asia spent six months tracking several of the tankers involved in some of these covert oil transfers, unraveling a murky corporate network that connects to a Singapore-headquartered major oil trader called the Winson Group.

The Times investigation, which includes findings from a new report by the research groups Royal United Services Institute (RUSI) and the Center for Advanced Defense Studies (C4ADS), centered on the largest foreign tanker shipping oil to North Korea. It is called the Diamond 8 and it was flagged by the United Nations for at least three illicit deliveries to North Korea between 2019 and 2020. Our investigation uncovered a fourth trip in May 2020. We also untangled an elaborate web of companies linking the Diamond 8 and its supplier ships to the Winson Group’s Taiwan operation, Winson Shipping.

The story of the Diamond 8 shows how one ship slipped through the cracks of a sweeping international sanctions program, and took advantage of both a lack of transparency in the shipping industry and a fractured international response.

A Single Oil Tanker’s Movements Reveal Lack of Sanctions Enforcement

After the Diamond 8 had been flagged by the U.N. in 2020 for delivering oil to North Korea, The Times used satellite imagery and ship-tracking data to show that the Diamond 8 made an additional trip to North Korea. During such oil deliveries, the Diamond 8 met up in international waters with other ships, which had already picked up oil. To this day, the Diamond 8 continues to operate in the region without interference from the authorities. It’s currently sitting idle in the territorial waters of China, a U.N. Security Council member.

Illicit Oil Deliveries Link to a Regional Oil Trader

Both the Diamond 8 and the two tankers that transferred oil to it — the Ever Grandeur and the Super Star — are connected to the Taiwan operation of the Winson Group. The company’s founder, Tony Tung, has been investigated on suspicion of smuggling in China and bribing officials in Taiwan, but his only conviction was later overturned.

The Winson Group conducts business across East Asia, including with major oil companies and state-owned enterprises. In a statement to The Times, the Winson Group’s executive director, Crystal Tung, said that the Winson Group “did not take any actions in violation of applicable sanctions against North Korea or any sanctioned countries.”

Just days after The Times asked questions about the Winson Group and Winson Shipping’s role in these oil deliveries, Winson Shipping changed its name to Zheng Yu Shipping. A Winson Shipping executive who spoke to a Times reporter during the investigation was also replaced as the company’s official representative, according to Taiwanese government documents.

Opaque Ownership Structures Are at the Heart of the Problem

It’s not always easy to ascertain who’s behind the tankers involved in these international oil deliveries. Shipping data often lists conflicting information. Many shipping companies also use private leasing agreements that are rarely captured on ship-tracking websites. Additionally, many companies that The Times investigated were registered in offshore, secrecy jurisdictions that mask ownership information.

On paper, the Diamond 8 is managed by an Indonesia-based company that is registered in the Seychelles — an offshore jurisdiction — and doesn’t have an actual office. Several other companies that managed the Diamond 8 also do not have a physical office at their registered address, making it difficult for the authorities to find out who is responsible for the ship.

The lack of transparency makes it hard for companies trying to avoid doing business with North Korea. It also makes it difficult to enforce U.N. sanctions.

Evolving Tactics Mask Sanctions Violations at Sea

To dodge sanctions or avoid detection, ships involved in getting goods to North Korea use increasingly advanced techniques, including turning off their required tracking signal. Recently, they have even started transmitting false ship names.

The Diamond 8 used its real name when it sailed toward North Korea. But, last fall it began transmitting as a ship called the Pasha4 from its homebase in China’s Fujian Province, researchers from RUSI discovered. At the time of this investigation, the real Pasha4, a different oil tanker, was in Turkey, as seen below.

Key Players Have Ties to a Village in China

The Winson Group’s founder, Tony Tung, and two other key individuals in this investigation have all been linked to a small coastal village called Xicen in the southeastern province of Fujian. These three have all been part of a Xicen community association. Fujianese diaspora communities have a large network of similar groups around the world. These networks often help them maintain close business and political ties with each other, and in some cases, with local authorities.

One of the largest smuggling operations in China’s history, known as the Xiamen Yuanhua smuggling syndicate, was based in Fujian and involved the movement of billions of dollars worth of oil, cars and cigarettes across China in the 1990s. Tony Tung was investigated for allegedly working with a key member of the Yuanhua syndicate to smuggle cigarettes into China, according to Chinese state media.

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