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As talks with North near, South Korea sees familiar hurdles ahead

FILE PHOTO: North Korean leader Kim Jong Un watches the launch of a Hwasong-12 missile in this undated photo released by North Korea's Korean Central News Agency (KCNA) on September 16, 2017. KCNA via REUTERS/File Photo

By Hyonhee Shin

SEOUL (Reuters) – With the specter of two past summits that failed to blunt North Korea’s nuclear ambitions, South Korean officials planning talks next month now face the thorny task of overcoming familiar sticking points with the threat of war looming over any failure.

A South Korean delegation returned home on Tuesday from a first-ever meeting with North Korean leader Kim Jong Un, to announce the agreement on a North-South summit next month, the first since 2007.

Seoul officials see the talks as the starting point of President Moon Jae-in’s initiative to denuclearize and build lasting peace on the peninsula, beginning with a freeze in the North’s nuclear program and ending in its complete abolishment.

“While pursuing a fundamental resolution of the standoff, we need to take some initial denuclearization steps, putting a halt to further testing and returning to dialogue,” a senior South Korean government official said on condition of anonymity.

“One could argue we would be deceived by the North as we have been for the last 20 years, but that’s the past – we have different people and different programs now,” the official said.

Moon said on Wednesday he had suggested to the North a rough roadmap progressing from a nuclear freeze to denuclearization, an opposition party chair told reporters after meeting with him.

But Moon said there won’t be “many agreements” to come out of the summit, according to a ruling party lawmaker who took part in the meeting.

Moon also called a 2005 deal of six-nation nuclear talks, under which Pyogyang agreed to give up its nuclear program in return for economic and energy aid and an end to its diplomatic isolation, a “failed model”, the first politician said.

FAMILIAR PATTERN

Former officials in Washington and Tokyo reacted with scepticism to the North’s offer of talks on denuclearization, seeing a familiar pattern of threats followed by talks that fail to win significant concessions.

Chief among the disagreements that have scuttled past efforts to defuse the standoff is North Korea’s requests for security guarantees in return for abandoning its nuclear weapons.

During talks with Moon’s envoys this week, the North expressed its willingness to denuclearize if military threats against it are eliminated, and the security of its regime is guaranteed, without presenting precise conditions.

“(North Korea) has never said what they mean by the guarantee of regime security,” one former senior South Korean official told Reuters.

“That means it’s up to them to decide whether the security is guaranteed or not, and that means they have full control.”

Pyongyang has protested South Korea-U.S. joint military drills as a rehearsal of war.

It has also called the roughly 28,000 American troops stationed in South Korea a potential invasion force that can only be countered by a robust nuclear deterrent.

The North’s official KCNA news agency said on Wednesday the United States is “getting frantic” with the deployment of U.S. troops on the Korean peninsula and their drills to get “familiar with its terrain and arms buildup there”.

Moon’s special advisor Moon Chung-in has raised the possibility for a possible pullout of U.S. forces, saying the president has the right to “let them out”.

Moon declined to comment on the summit, saying: “We will see.”

SECURITY GUARANTEE?

Any discussion of a U.S. troop withdrawal will be fraught, however, as both Seoul and Washington see them as a bulwark against North Korean provocations.

“For the North, a peace treaty and denuclearization means the removal of U.S. forces from not only the peninsula but also Japan and other bases in the Pacific theater,” said Kim Young-mok, a former South Korean diplomat who was involved in the making of a 1994 freeze-for-aid framework deal between Pyongyang and Washington.

“We responded by pledging non-aggression, but I guess it wasn’t enough.”

South Korean officials expect the issue to arise again, but are hoping Pyongyang won’t make impossible demands.

Another senior official acknowledged the difficulty in making progress in any peace talks without addressing the issue of eliminating the military threat to North Korea and guaranteeing the security of its regime.

“The North bring up disarmament talks and the withdrawal of U.S. forces”, the official said.

“If they do, things could get ugly quickly despite the summit, and the South Korea-U.S. alliance would face serious problems. But if the North were to move things forward, they would hopefully present something more realistic.”

Wi Sung-lac, a former South Korean nuclear negotiator, said there needs to be clearer mutual understanding of the definition of denuclearization to facilitate future talks.

“It’s unlikely to see any tangible outcome on the nuclear issue before the summit,” he said.

“The United States and North Korea could sit together at the negotiating table in the meantime, which would provide better optics for the summit but probably not in terms of substance.”

(Reporting by Hyonhee Shin; Additional reporting by Christine Kim; Editing by Josh Smith and Lincoln Feast)

Oil drops on surprise U.S. gasoline stocks build; crude stocks also up

FILE PHOTO: An oil pump is seen operating in the Permian Basin near Midland, Texas, U.S. on May 3, 2017. Picture taken May 3, 2017. REUTERS/Ernest Scheyder/File Photo

By Ayenat Mersie

NEW YORK (Reuters) – Oil prices fell more than 1 percent on Wednesday and gasoline futures tumbled, after the U.S. government said crude inventories rose more than expected while gasoline stocks posted a big build instead of the draw that was forecast.

U.S. crude inventories rose by 3 million barrels for the week ending Feb. 23, compared with analyst expectations for a build of 2.1 million barrels.

Gasoline inventories rose by 2.5 million barrels, compared to analyst expectations for a 190,000-barrel drawdown. Gasoline futures fell sharply, leading the rest of the energy complex lower.

“The report was bearish, primarily due to the fairly large crude oil and gasoline inventory builds,” said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.

U.S. West Texas Intermediate crude dropped 75 cents at $62.26 a barrel, a 1.2 percent decline, as of 10:55 a.m. EST (1555 GMT). Brent crude futures for the most active May contract were down 84 cents at $65.68 a barrel.

Gasoline futures lost 2.2 percent to $1.7636 a gallon. The rise in inventories came even as refineries boosted activity in the most recent week.

“In spite of refiners undergoing maintenance, they continue to process more crude compared to previous years adding to gasoline and diesel supply,” said Andrew Lipow, president at Lipow Oil Associates in Houston.

Soaring U.S. production kept a lid on oil prices this year, even though the Organization of the Petroleum Exporting Countries and Russia have reduced output.

A Reuters survey on Wednesday showed OPEC maintained its supply cuts in February, dropping output to 32.28 million bpd, lowest since April of last year.

“Climbing U.S. production continues to weigh on the market as traders fear that the OPEC output cuts will be nullified by the rising U.S. output,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

U.S. crude production has risen by a fifth since mid-2016 to more than 10 million barrels per day. Wednesday’s release showed weekly production rose again to 10.3 million bpd. More reliable monthly figures are due later in the day, and analysts expect that report to show another large upward revision.

Prices were pressured earlier after three of the world’s top consumers of crude – China, India and Japan – reported a slowdown in monthly factory activity.

The U.S. dollar hit a one-month high Wednesday, putting additional pressure on crude. A stronger dollar makes oil more expensive for holders of other currencies.

(Additional reporting by Scott DiSavino in NEW YORK, Amanda Cooper in LONDON, Aaron Sheldrick in TOKYO and Henning Gloystein in SINGAPORE; Editing by Dale Hudson and David Gregorio)

Trump says launching ‘largest-ever’ package of sanctions against North Korea

U.S. President Donald Trump takes questions from to reporters before departing the White House to speak at CPAC in Washington, U.S., February 23, 2018. REUTERS/Jim Bour

By Christine Kim and Steve Holland

SEOUL/WASHINGTON (Reuters) – U.S. President Donald Trump said on Friday the United States would launch the “largest-ever” package of sanctions against North Korea, intensifying pressure on the reclusive country to giving up its nuclear and missile programs.

“Today I am announcing that we are launching the largest-ever set of new sanctions on the North Korean regime,” Trump said in excerpts of a speech he was to deliver on Friday.

He said the Treasury Department soon will be taking action to further cut off sources of revenue and fuel that North Korea uses to fund its nuclear program and sustain its military.”

He said the effort will target more than 50 “vessels, shipping companies and trade businesses that are assisting North Korea in evading sanctions.

North Korea’s missile and nuclear program, which is seeking to develop a nuclear-tipped missile capable of reaching the U.S. mainland, is the Trump administration’s biggest national security challenge. Trump and North Korean leader Kim Jong Un have taunted each other through the media and Trump has threatened him with “fire and fury like the world has never seen.”

Tougher sanctions may jeopardize the latest detente between the two Koreas, illustrated by the North’s participation in the Winter Olympics in the South, amid preparations for talks about a possible summit between North Korean leader Kim Jong Un and South Korean President Moon Jae-in.

U.S. Vice President Mike Pence had hinted at such a sanctions package two weeks ago during a stop in Tokyo that preceded his visit to South Korea for the Pyeongchang Olympics.

North Korea last year conducted dozens of missile launches and its sixth and largest nuclear test in defiance of U.N. Security Council resolutions. It defends the weapons programs as essential to deter U.S. aggression.

It has been more than two months since North Korea’s last missile test.

Kim said he wants to boost the “warm climate of reconciliation and dialogue” with South Korea, which hosts 28,500 U.S. troops, after a high-level delegation, including his sister, returned from the Olympics.

In an extension of that rapprochement, the North agreed on Friday to hold working-level talks on Tuesday for the Pyeongchang Winter Paralympics on the North’s side of the border village of Panmunjom.

The new U.S. sanctions will be announced while Trump’s daughter, Ivanka, is visiting South Korea. She had dinner with Moon after a closed-door meeting with the president.

“We are very, very excited to attend the 2018 winter Olympic games to cheer for Team USA and to reaffirm our strong and enduring commitment with the people of the Republic of Korea,” Ivanka, a senior White House adviser who has a long been a close confidante of her father’s, said at Incheon airport.

Ivanka Trump’s visit to South Korea coincides with that of a sanctioned North Korean official, Kim Yong Chol, blamed for the deadly 2010 sinking of a South Korean navy ship that killed 46 sailors. His delegation will attend the closing ceremony and also meet Moon.

The South Korean president said South Korea cannot acknowledge North Korea as a nuclear state and talks with the North on denuclearization and improving inter-Korean relations must go hand in hand, Moon’s spokesman, Yoon Young-chan, said at a news conference.

He said close cooperation between the United States and South Korea is important for the talks.

“President Moon also said out of all countries, South Korea has the strongest will to say it cannot acknowledge North Korea as a nuclear state,” he said.

Moon made the comments to Ivanka.

The Blue House has said there are no official opportunities for U.S. and North Korean officials to meet.

“RIGHT PERSON”

Kim Yong Chol is the vice chairman of the North’s ruling Workers’ Party’s Central Committee and was previously chief of the Reconnaissance General Bureau, a top North Korean military intelligence agency that South Korea blamed for the sinking of its navy corvette, the Cheonan. North Korea has denied any involvement.

Seoul said it approved the pending visit by Kim Yong Chol in the pursuit of peace and asked for public understanding in the face of opposition protests.

“Under current difficult circumstances, we have decided to focus on whether peace on the Korean peninsula and improvement in inter-Korean relations can be derived from dialogue with (the visiting North Korean officials), not on their past or who they are,” said Unification Ministry spokesman Baik Tae-hyun in a media briefing.

Kim Yong Chol currently heads the United Front Department, the North’s office responsible for handling inter-Korean affairs.

South Korea’s decision on Thursday to allow in Kim Yong Chol, currently sanctioned by the United States and South Korea, sparked protest from family members of the dead sailors and opposition parties.

Many have been angered at the North’s participation at the Games, which they say has been a reward for bad behavior with no quid pro quo from Pyongyang.

(Reporting by Christine Kim in SEOUL and Steve Holland in WASHINGTON; Editing by Nick Macfie and Bill Trott)

Lesser-known North Korea cyber-spy group goes international: report

Binary code is seen on a screen against a North Korean flag in this illustration photo November 1, 2017. REUTERS/Thomas White/Illustration

By Eric Auchard

FRANKFURT (Reuters) – A North Korean cyber espionage group previously known only for targeting South Korea’s government and private sector deepened its sophistication and hit further afield including in Japan and the Middle East in 2017, security researchers said on Tuesday.

Cyber attacks linked by experts to North Korea have targeted aerospace, telecommunications and financial companies in recent years, disrupting networks and businesses around the world. North Korea rejects accusations it has been involved in hacking.

U.S. cyber security firm FireEye said the state-connected Reaper hacking organization, which it dubbed APT37, had previously operated in the shadows of Lazarus Group, a better-known North Korean spying and cybercrime group widely blamed for the 2014 Sony Pictures and 2017 global WannaCry attacks.

APT37 had spied on South Korean targets since at least 2012 but has been observed to have expanded its scope and sophistication to hit targets in Japan, Vietnam and the Middle East only in the last year, FireEye said in a report.

The reappraisal came after researchers found that the spy group showed itself capable of rapidly exploiting multiple “zero-day” bugs – previously unknown software glitches that leave security firms no time to defend against attacks, John Hultquist, FireEye’s director of intelligence analysis said.

“Our concern is that their (international) brief may be expanding, along with their sophistication,” Hultquist said.

“We believe this is a big thing”.

APT37 has focused on covert intelligence gathering for North Korea, rather than destructive attacks or financial cyber crime, as Lazarus Group and other similar hacking groups have been shown to engage in order to raise funds for the regime, it said.

The group appears to be connected to attack groups previously described as ScarCruft by security researchers at Kaspersky and Group123 by Cisco’s Talos unit, FireEye said.

“We assess with high confidence that this activity is carried out on behalf of the North Korean government given malware development artefacts and targeting that aligns with North Korean state interests,” the security report said.

From 2014 until 2017, APT37 concentrated mainly on South Korean government, military, defense industrial organizations and the media sector, as well as targeting North Korean defectors and human rights groups, the report said.

Since last year, its focus has expanded to include an organization in Japan associated with the United Nations missions on human rights and sanctions against the regime and the director of a Vietnamese trade and transport firm.

Its spy targets included a Middle Eastern financial company as well as an unnamed mobile network operator, which FireEye said had provided mobile phone service in North Korea until business dealings with the government fell apart.

FireEye declined to name the firm involved, but Egypt’s Orascom <OTMT.CA> provided 3G phone service in the country via a joint venture from 2002 to 2015, until the North Korean regime seized control of the venture, according to media reports.

Asked for comment, a spokeswoman for Orascom said she had no immediate knowledge of the matter and was looking into it.

(Reporting by Eric Auchard, and Nadine Awadalla in Cairo, Editing by William Maclean)

North Korea says no U.S. talks planned at Olympics, Pence vows continued pressure

Members of North Korean cheering squad arrive at a hotel in Inje, South Korea, February 7, 2018.

By Christine Kim and Hyonhee Shin

SEOUL, South Korea (Reuters) – North Korea has no intention of meeting U.S. officials during the Winter Olympics that start in South Korea on Friday, state media said, dampening hopes the Games will help resolve a tense standoff over the North’s nuclear weapons program.

However, the North’s high-ranking delegation, including the younger sister of its leader Kim Jong Un, will meet South Korean President Moon Jae-in and have lunch with him on Saturday.

Such a meeting would be the first such event between a South Korean head of state and a member of the Kim family since a 2007 summit meeting of Kim Jong Il and late South Korean president Roh Moo-hyun.

U.S. Vice President Mike Pence, who has described North Korea as the world’s most tyrannical regime, spoke with Moon on Thursday ahead of the opening ceremony in the mountain resort of Pyeongchang, just 80 km (50 miles) from the heavily armed border with the reclusive North.

Friday’s ceremony will be attended by North Korea’s delegation, including its nominal head of state, Kim Yong Nam.

Kim Yo Jong, the sister of the North’s leader, and her entourage, will travel by private jet to Seoul’s Incheon International Airport on Friday, North Korea told the South.

“We have never begged for dialogue with the U.S. nor in the future, too,” the North’s KCNA news agency said, citing Jo Yong Sam, a director-general in the North’s foreign ministry.

“Explicitly speaking, we have no intention to meet with the U.S. side during the stay in South Korea… Our delegation’s visit to South Korea is only to take part in the Olympics and hail its successful holding.”

The United States had not requested talks with North Korea, but Pence left open the possibility of some contact although his message for denuclearisation remained unchanged.

In opening remarks during his meeting with Moon, Pence said the United States would never waver in its goal of getting North Korea to give up its nuclear and ballistic missile program through strong pressure, an aim shared with South Korea.

Pence has said Washington would soon unveil “the toughest and most aggressive round of economic sanctions on North Korea ever” while South Korea wants to use the Olympics to re-engage with the North.

In Beijing, Chinese Foreign Minister Wang Yi told reporters all sides, not just the two Koreas, needed to work hard and dialogue between the United States and North Korea should be expanded for this to happen, Wang said.

“You can’t have it that one person opens the door and another closes it,” he said.

North and South Korea are technically still at war because their 1950-53 conflict ended in a truce, not a peace treaty. The North defends its weapons programmes as necessary to counter U.S. aggression. The South hosts 28,500 U.S. troops, a legacy of the war.

MILITARY PARADE

North Korea marked the founding anniversary of its army with a large military parade in Pyongyang on Thursday broadcast by state media, having last month changed the date of the celebration to the eve of the Olympics.

Kim Jong Un, in a black hat and matching coat, saluted troops while his wife walked beside him, television images showed. One of Kim’s close aides, Choe Ryong Hae, and Kim Yong Nam were also in attendance.

The North’s state media also showed what appeared to be intercontinental ballistic missiles on launchers as thousands of North Koreans filled Kim Il Sung Square, named after Kim Jong Un’s grandfather, in Pyongyang.

“We have destroyed the enemy’s risk-taking provocations at every move,” Kim Jong Un said in a speech. He did not mention the United States, which North Korea considers its main enemy and regularly threatens to destroy in a sea of flames.

Analysts said the parade seemed smaller than those of previous years, but was still focused on the North’s goal of strengthening its nuclear missile capabilities.

Trump has ordered Pentagon and White House officials to begin planning a military parade in Washington similar to the Bastille Day parade he saw in Paris in July, the Washington Post said.

On Friday, before he attends the Olympic opening ceremony, Pence will visit a memorial for 46 South Korean sailors killed in the 2010 sinking of a warship that Seoul blamed on a North Korean torpedo attack.

SEATING COMPLICATIONS

The 28-year-old sister of the North Korean leader will be the first member of the Kim family to cross the border into the South. Kim Yo Jong is a propaganda official blacklisted last year by the U.S. Treasury Department over alleged human rights abuses and censorship.

“By sending key figures like his sister, Kim Jong Un is aiming to send a signal to the South that it is giving more weight to inter-Korean ties while driving a wedge between South Korea and the United States,” said Kim Sung-han, a former South Korean vice foreign minister.

Japanese Prime Minister Shinzo Abe will also attend the ceremony, adding to seating complications for the hosts.

South Korea has asked the United Nations for an exemption to allow a U.N.-sanctioned North Korean official, Choe Hwi, to attend the opening ceremony with Kim Yo Jong.

Pyongyang has yet to mention any change in plans to send him, Seoul said.

The U.N. Security Council, which has slapped sanctions on North Korea for its weapons programmes, imposed a travel ban and asset freeze on Choe last year when he was vice director of the Workers’ Party of Korea Propaganda and Agitation Department.

A group of 280 North Koreans arrived in South Korea on Wednesday, made up of a 229-member cheer squad, taekwondo performers, journalists and the sports minister.

(For graphic on North Korea’s Olympic delegations, click http://tmsnrt.rs/2E1Qa9Q)

(Reporting by Hyonhee Shin and Christine Kim in SEOUL; Additional reporting by Heekyong Yang and Josh Smith in SEOUL, Ossian Shine in PYEONGCHANG, Tim Kelly and Linda Sieg in TOKYO, David Brunnstrom and Matt Spetalnick in WASHINGTON, Michelle Nichols at the UNITED NATIONS and Ben Blanchard in BEIJING; Writing by Lincoln Feast; Editing by Paul Tait and Nick Macfie)

Warning level raised on another Japanese volcano a week after fatal eruption

Photo taken from a Kyodo News helicopter on January 23, 2018,

OKYO (Reuters) – Japan raised the warning level on another volcano on Tuesday, exactly a week after an dramatic eruption at another peak killed one man, injured nearly a dozen others and stranded scores of skiers – including foreign tourists – for several hours.

Japan’s Meteorological Agency lifted the warning on Zao, a cluster of volcanoes in northern Japan whose highest point is 1,841 meters (6,040 ft), to 2 from 1, meaning that people should avoid going near the crater.

“There is a possibility of a small-scale eruption,” the agency said in a statement, noting that a number of small earth movements were detected on Tuesday, along with a slight bulging of the ground in one area.

It also warned of the possibility that volcanic rocks could be thrown as far as 1.2 km in any eruption.

The announcement came a week after a member of Japan’s military was struck and killed when rocks from the sudden eruption of the Kusatsu-Shirane volcano rained down on skiers at a mountain resort in central Japan.

Video footage taken by skiers on the mountain, including some from Taiwan, showed black ash boiling up into the sky as stones plummeted down, some punching holes in the metal roof of a ski gondola. Eleven people were injured and around 100 skiers took refuge in a mountain hut for several hours until rescued.

Zao, like Kusatsu-Shirane, is a popular resort area famed for its “snow monsters,” created by water vapor freezing on trees in winter. Its slopes are packed with skiers in winter and hikers in other seasons.

Japan has 110 active volcanoes and monitors 47 of them around the clock. In September 2014, 63 people were killed on Mount Ontake, the worst volcanic disaster in Japan for nearly 90 years.

(Reporting by Elaine Lies; Editing by Michael Perry)

Exclusive: Despite sanctions, North Korea exported coal to South and Japan via Russia

A cargo ship is loaded with coal during the opening ceremony of a new dock at the North Korean port of Rajin July 18, 2014.

By Guy Faulconbridge, Jonathan Saul and Polina Nikolskaya

PARIS/LONDON/MOSCOW (Reuters) – North Korea shipped coal to Russia last year which was then delivered to South Korea and Japan in a likely violation of U.N. sanctions, three Western European intelligence sources said.

The U.N. Security Council banned North Korean exports of coal last Aug. 5 under sanctions intended to cut off an important source of the foreign currency Pyongyang needs to fund its nuclear weapon and long-range missile programs.

But the secretive Communist state has at least three times since then shipped coal to the Russian ports of Nakhodka and Kholmsk, where it was unloaded at docks and reloaded onto ships that took it to South Korea or Japan, the sources said.

A Western shipping source said separately that some of the cargoes reached Japan and South Korea in October last year. A U.S. security source also confirmed the coal trade via Russia and said it was continuing.

“Russia’s port of Nakhodka is becoming a transhipping hub for North Korean coal,” said one of the European security sources, who requested anonymity because of the sensitivity of international diplomacy around North Korea.

Asked to respond to the report, Kremlin spokesman Dmitry Peskov said on Friday that Russia abided by international law.

“Russia is a responsible member of the international community,” he told reporters on a conference call.

Interfax news agency quoted an unidentified official at Russia’s embassy to North Korea on Friday as saying Russia did not buy coal from North Korea and was “not a transit point for coal deliveries to third countries.”

Russia’s mission to the United Nations told the Security Council sanctions committee on Nov. 3 that Moscow was complying with the sanctions.

Two lawyers who specialize in sanctions law told Reuters it appeared the transactions violated U.N. sanctions.

Reuters could not independently verify whether the coal unloaded at the Russian docks was the same coal that was then shipped to South Korea and Japan. Reuters also was unable to ascertain whether the owners of the vessels that sailed from Russia to South Korea and Japan knew the origin of the coal.

The U.S. Treasury on Wednesday put the owner of one of the ships, the UAL Ji Bong 6, under sanctions for delivering North Korean coal to Kholmsk on Sept. 5.

It was unclear which companies profited from the coal shipments.

RUSSIA URGED “DO MORE” ON SANCTIONS

North Korean coal exports were initially capped under a 2016 Security Council resolution that required countries to report monthly imports of coal from North Korea to the council’s sanctions committee within 30 days of the end of each month.

Diplomats, speaking on condition of anonymity, said Russia had not reported any imports of North Korea coal to the committee last year.

The sanctions committee told U.N. member states in November that a violation occurs when “activities or transactions proscribed by Security Council resolutions are undertaken or attempts are made to engage in proscribed transactions, whether or not the transaction has been completed.”

Asked about the shipments identified by Reuters, Matthew Oresman, a partner with law firm Pillsbury Winthrop Shaw Pittman who advises companies on sanctions, said: “Based on these facts, there appears to be a violation of the U.N. Security Council resolution by the parties involved.”

“Also those involved in arranging, financing, and carrying out the shipments could likely face U.S. sanctions,” he said.

Asked about the shipments, a U.S. State Department spokesman said: “It’s clear that Russia needs to do more. All U.N. member states, including Russia, are required to implement sanctions resolutions in good faith and we expect them all to do so.”

The White House did not immediately respond to a request for comment.

The independent panel of experts that reports to the Security Council on violations of sanctions was not immediately available for comment.

North Korea has refused to give up the development of nuclear missiles capable of hitting the United States. It has said the sanctions infringe its sovereignty and accused the United States of wanting to isolate and stifle North Korea.

An independent panel of experts reported to the Security Council on Sept. 5 that North Korea had been “deliberately using indirect channels to export prohibited commodities, evading sanctions.”

Reuters reported last month that Russian tankers had supplied fuel to North Korea at sea and U.S. President Donald Trump told Reuters in an interview on Jan. 17 that Russia was helping Pyongyang get supplies in violation of the sanctions.

The U.S. Treasury on Wednesday imposed sanctions on nine entities, 16 people and six North Korean ships it accused of helping the weapons programs.

TWO ROUTES

Two separate routes for the coal were identified by the Western security sources.

The first used vessels from North Korea via Nakhodka, about 85 km (53 miles) east of the Russian city of Vladivostok.

One vessel that used this route was the Palau-flagged Jian Fu which Russian port control documents show delivered 17,415 tonnes of coal after sailing from Nampo in North Korea on Aug. 3 and docking at berth no. 4 run by LLC Port Livadiya in Nakhodka. It left the port on Aug. 18.

The vessel had turned off its tracking transmitter from July 24 to Aug. 2, when it was in open seas, according to publicly available ship tracking data. Under maritime conventions, this is acceptable practice at the discretion of the ship’s captain, but means the vessel could not be tracked publicly.

Another ship arrived at the same berth — No. 4 — on Aug. 16, loaded 20,500 tonnes of coal and headed to the South Korean port of Ulsan in Aug. 24, according to Russian port control documents.

Reuters was unable to reach the operator of the Jian Fu, which was listed in shipping directories as the China-based Sunrise Ship Management. The Nakhodka-based transport agent of the Jian Fu did not respond to written and telephone requests for comment. LLC Port Livadiya did not respond to a written request for comment.

The second route took coal via Kholmsk on the Russian Pacific island of Sakhalin, north of Japan.

At least two North Korean vessels unloaded coal at a dock in Kholmsk port in August and September after arriving from the ports of Wonsan and Taean in North Korea, Russian port control data and ship tracking data showed.

The Rung Ra 2 docked in Kholmsk three times between Aug 1 and Sept. 12, unloading a total of 15,542 tonnes of coal, while the Ul Ji Bong 6 unloaded a total of 10,068 tonnes of coal on two separate port calls — on Aug. 3 and between Sept. 1 and Sept. 8, according to the official Russian Information System for State Port Control.

The coal did not pass Russian customs because of the UN sanctions taking effect, but was then loaded at the same dock onto Chinese-operated vessels. Those vessels stated their destination in Russian port control documents as North Korea, according to a source in Sakhalin port administration who spoke on condition of anonymity.

Reuters has seen the port control documents which state the destination of the coal as North Korea. But the vessels that loaded the North Korean coal sailed instead for the ports of Pohang and Incheon in South Korea, ship tracking data showed.

In Beijing on Friday, foreign ministry spokeswoman Hua Chunying told reporters she did not know anything about the situation but China was clear in its hope that the UN resolutions are followed fully.

China will not allow any Chinese company or individual to do anything that goes against the resolutions and if there is cast-iron proof this is happening, China will handle it seriously and in accordance with the law, she added.

The U.S. Treasury on Wednesday included the owner of the Ul Ji Bong 6 under sanctions for delivering North Korean coal to Kholmsk after the sanctions took effect.

It was unclear which companies profited from the coal shipments.

Asked about the shipments, a South Korean foreign ministry official said: “Our government is monitoring any sanctions-evading activities by North Korea. We’re working closely with the international community for the implementation of the sanctions.”

The official declined to say whether the ministry was aware of the shipments reported by Reuters.

The Japanese foreign ministry did not immediately respond to a request for comment.

The European security sources said the route via Russia had developed as China, North Korea’s neighbor and lone major ally, cracked down on exports from the secretive Communist state.

“The Chinese have cracked down on coal exports from North Korea so the smuggling route has developed and Russia is the transit point for coal,” one of the European security sources said.

(Writing by Guy Faulconbridge and Jonathan Saul; Additional reporting by Michele Nichols in New York, Oksana Kobzeva and Gleb Stolyarov in Moscow, Hyonhee Shin in Seoul, William James in London, Muyu Xu, Ben Blanchard and Josephine Mason in Beijing, Aaron Sheldrick and Linda Sieg in Tokyo, and Mark Hosenball and Matt Spetalnick in Washington; Editing by Timothy Heritage, Clarence Fernandez and Sonya Hepinstall)

Japanese capital holds first North Korean missile attack drill

Participants run during an anti-missile evacuation drill at the Tokyo Dome City amusement park in Tokyo, Japan January 22, 2018.

TOKYO (Reuters) – Tokyo held its first missile evacuation drill on Monday with volunteers taking cover in subway stations and other underground spaces that would double as shelters for the Japanese capital in the event of a North Korean missile strike.

The choreographed evacuations at a fair ground and park ringing the Tokyo Dome baseball stadium involved around 300 volunteers.

Small groups of protesters scuffled with police as they demonstrated against what they criticized as a war game that fanned public fear.

While hope grows that North Korea’s participation in next month’s Winter Olympics in South Korea may help defuse tension in the region, Japan is escalating efforts to prepare its citizens for a possible war.

Tokyo believes the threat posed by Pyongyang’s ballistic missile and nuclear weapons development is deepening.

“A missile from North Korea would arrive in less than 10 minutes and the first alert would come about three minutes after launch, which gives us only around five minutes to find shelter,” Hiroyuku Suenaga, a Japanese government official, told volunteers after the Tokyo exercise.

Small Japanese towns and villages have conducted similar drills as North Korea has pushed ahead with its missile and nuclear weapons programs.

North Korea conducted its most recent and biggest nuclear bomb test in September and has tested dozens of ballistic missiles. The latest missile test in November reached an altitude of about 4,475 km (2,780 miles) and flew 950 km (590 miles), passing over Japan before splashing into waters in Japan’s exclusive economic zone.

Pyongyang says its weapons programs are a necessary defense against a possible U.S. invasion.

Amid public concern over the possibility of more missile launches, Japanese public broadcaster NHK issued a false launch alarm urging people to take shelter six days ago. That came days after a similar false alert caused panic across Hawaii.

“I am not that worried about North Korea, if something happened that would be frightening,” said Hidenobu Kondo, one of the volunteer evacuees. However, the 50-year-old company employee said the drill would not be of much use in the event of real attack.

“If I was at work it might be easy to evacuate, but If I was outside somewhere it would be more difficult,” Kondo said.

Japan’s defenses against a ballistic missile strike include Aegis destroyers in the Sea of Japan armed with interceptor missiles designed to destroy warheads in space. PAC-3 Patriot missile batteries represent a last line of defense against warheads that can plunge to their targets at several kilometers per second.

Japan has also decided to buy two land-based Aegis batteries and cruise missiles that could strike North Korean missile sites.

(Reporting by Tim Kelly; Editing by Paul Tait)

Nations to consider more North Korea sanctions, U.S. warns on military option

South Korean Minister of Foreign Affairs Kang Kyung-wha, U.S. Secretary of State Rex Tillerson, Canada’s Minister of Foreign Affairs Chrystia Freeland and Japan's Minister of Foreign Affairs Taro Kono are seen during the Foreign Ministers’ Meeting on Security and Stability on the Korean Peninsula in Vancouver, British Columbia, Canada January 16, 2018.

By David Brunnstrom and David Ljunggren

VANCOUVER (Reuters) – Twenty nations agreed on Tuesday to consider tougher sanctions to press North Korea to give up its nuclear weapons and U.S. Secretary of State Rex Tillerson warned Pyongyang it could trigger a military response if it did not choose negotiations.

A U.S.-hosted meeting of countries that backed South Korea during the 1950-53 Korea War also vowed to support renewed dialogue between the two Koreas “in hopes that it leads to sustained easing of tensions” and agreed that a diplomatic solution to the crisis was both essential and possible.

North Korean leader Kim Jong Un has refused to give up development of nuclear missiles capable of hitting the United States in spite of increasingly severe U.N. sanctions, raising fears of a new war on the Korean peninsula.

The United States and Canada co-hosted the day-long meeting in Vancouver to discuss ways to increase pressure on Kim.

U.S. officials have reported a debate within the Trump administration over whether to give more active consideration to military options, such as a pre-emptive strike on a North Korean nuclear or missile site.

Tillerson brushed off a question about such a “bloody nose” strike, telling a closing news conference: “I’m a not going to comment on issues that have yet to be decided among the National Security Council or the president.”

However, he said the threat posed by North Korea was growing.

“We all need to be very sober and clear-eyed about the current situation … We have to recognize that the threat is growing and if North Korea does not chose the pathway of engagement, discussion, negotiation, then they themselves will trigger an option,” Tillerson said.

“Our approach is, in terms of having North Korea chose the correct step, is to present them with what is the best option – talks are the best option; that when they look at the military situation, that’s not a good outcome for them.”

“It is time to talk, but they have to take the step to say they want to talk.”

The Vancouver meeting pledged to ensure that U.N. sanctions already in place were fully implemented and the participants said in a joint statement they agreed “to consider and take steps to impose unilateral sanctions and further diplomatic actions that go beyond those required by U.N. Security Council resolutions.” They gave no details.

Tillerson said all countries needed to work together to improve interdiction of ships attempting to skirt sanctions and said there must be “new consequences” for North Korea “whenever new aggression occurs.”

He said the meeting had agreed that China and Russia, which did not attend the Vancouver talks and sharply criticized them, must fully implement U.N. sanctions.

Speaking in Beijing, Chinese Foreign Ministry spokesman Lu Kang said Canada and the United States were demonstrating a “Cold War mentality” that would divide the international community and damage chances of an appropriate settlement on the peninsula.

“Only through dialogue, equally addressing the reasonable concerns of all parties, can a way to an effective and peaceful resolution be found,” Lu added.

U.S. officials say discussion of a military strike option has lost some momentum since North and South Korea held formal talks for the first time in two years this month and Pyongyang said it would send athletes to the Winter Olympics that South Korea will host next month.

‘NOT TIME FOR REWARD’

Japanese Foreign Minister Taro Kono said in Vancouver that the world should not be naive about North Korea’s “charm offensive” in engaging in talks with the South.

“It is not the time to ease pressure, or to reward North Korea,” he said. “The fact that North Korea is engaging in dialogue could be interpreted as proof that the sanctions are working.”

South Korean Foreign Minister Kang Kyung-wha said she hoped the dialogue would continue well beyond the Olympics, but stressed that existing sanctions must be applied more rigorously.

Tillerson said North Korea must not be allowed “to drive a wedge” through allied resolve or solidarity and reiterated Washington’s rejection of a Chinese-Russian proposal for the United States and South Korea to freeze military exercises in return for a freeze in North Korea’s weapons programs.

A senior State Department official said U.S. Defense Secretary Jim Mattis briefed the Vancouver participants over dinner on Monday and stressed the U.S. preference for a diplomatic solution, while keeping a military option on the table.

“It was a chance to raise people’s confidence that we have thought through this, that we definitely prefer a diplomatic solution,” the official said.

Russia and China have been accused of not fully implementing the U.N. sanctions, something they deny.

Chinese Foreign Minister Wang Yi, speaking on Tuesday in the West African state of Sao Tome, said everyone should cherish the present easing of tension on the Korean peninsula.

But history shows that each time tensions ease, there could be interference or backsliding, Wang added.

“Now is the time to test each side’s sincerity,” he said. “The international community must keep its eyes wide open, and see who is really the promoter of a peaceful resolution to the peninsula nuclear issue and who will become the saboteur who causes a return to tensions.”

A U.S. official said Susan Thornton, the State Department’s senior diplomat for East Asia, would travel to Beijing from Vancouver to brief China on the outcome. He said he expected Tillerson to provide readouts to his Russian and Chinese counterparts.

(Reporting by David Ljunggren and David Brunnstrom; Additional reporting by Nicole Mordant in Vancouver, Michelle Nichols at the United Nations, Philip Wen in Beijing and Matt Spetalnick in Washington; Editing by James Dalgleish and Lisa Shumaker)

South Korea’s Moon says Trump deserves ‘big’ credit for North Korea talks

South Korean President Moon Jae-in delivers a speech during his New Year news conference at the Presidential Blue House in Seoul, South Korea, January 10,

By Christine Kim and Soyoung Kim

SEOUL (Reuters) – South Korean President Moon Jae-in credited U.S. President Donald Trump on Wednesday for helping to spark the first inter-Korean talks in more than two years, and warned that Pyongyang would face stronger sanctions if provocations continued.

The talks were held on Tuesday on the South Korean side of the demilitarized zone, which has divided the two Koreas since 1953, after a prolonged period of tension on the Korean peninsula over the North’s missile and nuclear programs.

North Korea ramped up its missile launches last year and also conducted its sixth and most powerful nuclear test, resulting in some of the strongest international sanctions yet.

The latest sanctions sought to drastically cut the North’s access to refined petroleum imports and earnings from workers abroad. Pyongyang called the steps an “act of war”.

Seoul and Pyongyang agreed at Tuesday’s talks, the first since December 2015, to resolve all problems between them through dialogue and also to revive military consultations so that accidental conflict could be averted.

“I think President Trump deserves big credit for bringing about the inter-Korean talks, I want to show my gratitude,” Moon told reporters at his New Year’s news conference. “It could be a resulting work of the U.S.-led sanctions and pressure.”

Trump and North Korean leader Kim Jong Un exchanged threats and insults over the past year, raising fears of a new war on the peninsula. South Korea and the United States are technically still at war with the North after the 1950-53 Korean conflict ended with a truce, not a peace treaty.

‘BASIC STANCE’

Washington had raised concerns that the overtures by North Korea could drive a wedge between it and Seoul, but Moon said his government did not differ with the United States over how to respond to the threats posed by Pyongyang.

“This initial round of talks is for the improvement of relations between North and South Korea. Our task going forward is to draw North Korea to talks aimed at the denuclearization of the North,” Moon said. “(It’s) our basic stance that will never be given up.”

Moon said he was open to meeting North Korea’s leader at any time to improve bilateral ties, and if the conditions were right and “certain achievements are guaranteed”.

“The purpose of it shouldn’t be talks for the sake of talks,” he said.

However, Pyongyang said it would not discuss its nuclear weapons with Seoul because they were only aimed at the United States, not its “brethren” in South Korea, nor Russia or China, showing that a diplomatic breakthrough remained far off.

North Korea’s Rodong Sinmun newspaper said all problems would be resolved through efforts by the Korean people alone.

“If the North and South abandon external forces and cooperate together, we will be able to fully solve all problems to match our people’s needs and our joint prosperity,” it said.

Washington still welcomed Tuesday’s talks as a first step toward solving the North Korean nuclear crisis. The U.S. State Department said it would be interested in joining future talks, with the aim of denuclearizing the North.

The United States, which still has 28,500 troops stationed in South Korea, initially responded coolly to the idea of inter-Korean meetings. Trump later called them “a good thing” and said he would be willing to speak to Kim.

Lee Woo-young, a professor at the University of North Korean Studies in Seoul, said it was wise of Moon to praise Trump, his sanctions and pressure campaign.

“By doing that, he can help the U.S. build logic for moving toward negotiations and turning around the state of affairs in the future, so when they were ready to talk to the North, they can say the North came out of isolation because the sanctions were effective.”

The United States and Canada are set to host a conference of about 20 foreign ministers on Jan. 16 in Vancouver to discuss North Korea, without the participation of China, Pyongyang’s sole major ally and biggest trade partner.

China would not attend the meeting and is resolutely opposed to it, said foreign ministry spokesman Lu Kang.

“It will only create divisions within the international community and harm joint efforts to appropriately resolve the Korean peninsula nuclear issue,” he told a regular briefing on Wednesday.

LARGE OLYMPICS DELEGATION

Pyongyang also said it would send a large delegation to next month’s Winter Olympics in South Korea.

Washington agreed with Seoul last week to postpone until after the Olympics joint military exercises that Pyongyang denounces as rehearsals for invasion. But it also said the apparent North-South thaw had not altered the U.S. intelligence assessment of the North’s weapons programs.

The United States has also warned that all options, including military, are on the table in dealing with the North.

“We cannot say talks are the sole answer,” Moon said. “If North Korea engages in provocations again or does not show sincerity in resolving this issue, the international community will continue applying strong pressure and sanctions.”

Seoul said on Tuesday it was prepared to offer financial assistance and lift some unilateral sanctions temporarily so North Koreans could attend the Olympics. North Korea said its delegation would include athletes and officials, among others.

However, Moon said on Wednesday South Korea had no plans for now to ease unilateral sanctions against North Korea, or revive economic exchanges that could run foul of United Nations sanctions.

Moon also said his government would continue working toward recovering the honor and dignity of former “comfort women”, a euphemism for those forced to work in Japan’s wartime brothels.

But historical issues should be separated from bilateral efforts with Japan to safeguard peace on the Korean peninsula, he added.

“It’s very important we keep a good relationship with Japan,” Moon said.

On Tuesday, South Korea said it would not seek to renegotiate a 2015 deal with Japan despite determining that the pact was insufficient to resolve the divisive issue, and urged Japan for more action to help the women.

 

(Additional reporting by Josh Smith and Hyonhee Shin in SEOUL and Michael Martina in BEIJING, Writing by Soyoung Kim, Editing by Paul Tait)