Insurers underwriting North Korean cargo could be penalised

American defence think-tank recommends harsher sanctions against authoritarian Asian state

Insurers underwriting North Korean cargo could be penalised

Insurance News

By Gabriel Olano

A Washington-based think tank has released a report recommending tougher sanctions against North Korea, which includes penalising insurance companies that underwrite cargo to and from the isolated Asian country.

The Centre for a New American Security (CNAS), proposed the aggressive solutions in its policy paper, titled “A Blueprint for New Sanctions on North Korea”, which was produced by the organisation’s Energy, Economics and Security Program.

The report suggested eight different sanctions, including attacking the country’s secondary sources of income, ranging from textiles to oil. Among the sanctions were to blacklist foreign companies that engage in trade with North Korea, in a similar manner to the sanctions on Iran’s oil exports imposed by the 2012 US National Defence Authorization Act. This also includes marine insurers that underwrite vessels carrying cargo to and from North Korea.

Sanctions against foreign banks that trade with North Korean overseas front companies were also proposed. CNAS recommended that all payments to North Korean entities must be held in overseas escrow accounts, with funds to be released only for humanitarian purposes such as buying food or medicine.

The report was received positively by several experts, including Bruce Bechtol, a former US intelligence analyst and currently a member of the board of directors of the Council on US-Korea Security Studies and president of the International Council on Korean Studies.

“It is important to go after banks laundering North Korea’s dirty money, largely gained from military proliferation, but we cannot stop there,” Bechtol told Shephard Media.

“We must go after front companies, banks and individuals being used as intermediaries in places like Malaysia, Singapore and several countries in Africa,” he added.

Related stories:
North Korea to grow its insurance sector despite international sanctions
Saudi Arabia bars North Korea from its financial services
Inter-Korean industrial complex’s shutdown leads to $1.3bn loss

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