North Korea, with China barely batting an eye, had an almost endless list of tricks up its sleeve to disguise its trade in weapons and luxury items and throw investigators off track.
That is the gist of reports by a panel of experts looking into how North Korea has been able to sidestep economic sanctions imposed by the U.N. Security Council.
The panel was set up under the Sanctions Committee of the U.N. Security Council to ensure that punitive measures against North Korea were being followed.
It is made up of representatives from the five permanent members of the Security Council, along with Japan and South Korea.
One location that draws a lot of attention in the reports is the port city of Dalian in northeast China.
Many North Korean companies that have opened offices in Dalian are listed as the official recipient of various transactions that pass through Dalian, according to sources in the know about such matters.
Lax oversight makes the port a prime location for laundering the contents of cargoes as well as disguising the final destination.
Other regional ports in Southeast Asia where customs inspections are not as strict are also frequently used in the illicit trade with North Korea.
A Chinese trading company based in Dalian is said to have served as an intermediary for the purchase of two yachts bound for North Korea that were seized by the Italian government in July 2009. The company is rumored to have close ties to a section of the Workers' Party of Korea which handles the personal assets of Kim Jong Un, the North Korean leader.
Despite the suspicions about Dalian, Beijing has so far refused to allow the U.N. panel members to investigate the port or the trading company.
The reports also reveal the many tricks used by North Korea to get around sanctions.
One classic case from the autumn of 2009 was interrupted when South Africa confiscated tank parts bound from North Korea to the Republic of Congo via Dalian.
The tank parts were hidden under rice bags. Shipping parts rather than finished products makes for easier concealment.
The use of rice bags smacked of ingenuity.
Not only did the rice bags serve as cushions for the tank parts, but the grain would have helped feed North Koreans in the Congo who were sent there to assemble the parts.
To get around U.N. sanctions, North Korea has set up various paper companies. When a company is targeted for sanctions, Pyongyang simply creates a new paper company.
North Korea has been able to get away with violating sanctions because China, its longtime backer, has not been vigilant about ensuring the measures are being followed to the letter.
China, for one thing, has refused to allow the release of the experts panel reports for 2011 and 2012.
However, that stubbornness appears to be changing, partly because China itself has come under fire for its uncooperative stance.
Japan, the United States and South Korea gently let China know about information linking Beijing with the export of large military transport vehicles to North Korea last August.
A Japanese government source said, "China likely realized things would only get worse unless it did something."
The Chinese representative on the experts panel has consistently raised questions about suspicions related to violations of the Security Council resolution. In particular, any mention of possible Chinese involvement invariably leads to sharp retorts from the Chinese representative, sources said.
For example, in a report compiled in May 2011, the initial wording had North Korea and Iran exchanging ballistic missile-related technology through China. The Chinese representative vigorously objected and the wording was changed to "a neighboring third nation."
At the same time, China never did anything that might have cleared up suspicions of its involvement in the illicit trade with North Korea.
One Japanese government source said about China's attitude, "If the actual situation was cleared up, it would mean a major loss of face for China."
There is also the possibility that China could be severely embarrassed if a thorough investigation highlighted deficiencies in its system.
For example, it could emerge that bribes are paid to customs officials to ensure lax oversight at Chinese ports, or that the Chinese government is shown to have less than total control over industrial sectors managed by the Chinese military.
This could explain how North Korea was able to move in and out of Chinese ports at will to pursue illegal transactions.
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