Published: 23 December 2020 Authors: Stefan Talmon and Anna Dickmann-Peña
On 14 October 2006, the UN Security Council imposed sanctions on the Democratic People’s Republic of Korea (DPRK) in response to the country’s development and testing of nuclear weapons and ballistic missiles in flagrant disregard of relevant Security Council resolutions. In order to oversee the implementation of the sanctions, the Council, in resolution 1718 (2006), established a Committee consisting of all Council members (DPRK Sanctions Committee or 1718 Committee). According to the Guidelines for the work of the Committee, all decisions are made by consensus. The Chair of the Committee is encouraged to consult with Committee members before submitting an issue for decision. If consensus cannot be reached, the Chair may undertake such further consultations as may facilitate agreement. If despite best efforts no consensus can be reached, the Chair may bring the issue to the attention of the Council. In 2019-2020, the Committee was chaired by the Permanent Representative of Germany to the UN, Ambassador Christoph Heusgen.
In June 2009, the Security Council tightened the sanctions and established a Panel of Experts to assist the Committee in carrying out its mandate. Over the years, the Security Council further expanded the sanctions regime against the DPRK in response to the country’s ongoing nuclear- and ballistic missile-related activities. On 11 September 2017, the Security Council decided that all Member States shall prohibit the direct or indirect provision to the DPRK of all refined petroleum products, including diesel and kerosine, subject to certain exceptions. On 22 December 2017, the Security Council adopted resolution 2397 (2017), further restricting the exceptions. From 1 January 2018, exports in the aggregate amount of only up to 500,000 barrels during a period of twelve months, and for any twelve-month period thereafter, were allowed. The exception was subject to the condition that the Member States notified the 1718 Committee every thirty days of the amount of refined petroleum products supplied to the DPRK. The Committee Secretariat was to notify all Member States when certain percentages of the aggregate yearly amounts of refined petroleum products had been reached. Upon notification that 95 per cent of the aggregate yearly amounts had been reached, Member States were immediately to cease selling, supplying, or transferring any further refined petroleum products to the DPRK for the remainder of the year. Information on the total amount of refined petroleum products sold, supplied, or transferred to the DPRK by month and by source country was to be made publicly available on the Committee’s website. According to the Committee’s website, the Russian Federation and China were the only countries which notified the Committee of the export of refined petroleum products to North Korea.
Both the Russian Federation and China duly notified the Committee every thirty days of their exports of refined petroleum products to the DPRK. However, the two countries reported the amount of the deliveries not in barrels, but in metric tons. While resolution 2397 (2017), in paragraph 4, specified a ton-to-barrel ratio for crude oil, it did not provide a conversion rate for refined petroleum products. As there was no agreement on a conversion rate, the 1718 Committee was unable to determine what percentile of the cap volume of 500,000 barrels had been reached and, more importantly, whether the 95 per cent of the aggregate yearly amount which triggered the immediate export stop had been reached. In the absence of a notification by the Committee Secretariat, export of refined petroleum products to the DPRK was fully in line with the requirements of the DPRK sanctions regime. This led the Panel of Experts to recommend, in their report of 1 February 2019, that the 1718 Committee “agree upon a single conversion rate between tons and barrels for all refined petroleum products”. The Panel of Experts reiterated this recommendation in its report to the Security Council in February 2020. In this report, the Panel of Experts also set out the problem as follows:
“In paragraph 5 of resolution 2397 (2017), the Security Council does not specify what ratio should be used for the conversion rate for tons and barrels. Using the ton-to-barrel ratio indicated in paragraph 4 of the resolution in respect of crude oil (i.e. 7.61904762 barrels per ton), the Panel calculates that the total of the accumulated amounts submitted to the Committee by China and the Russian Federation [53,625.568 tons] would equal 408,575.756 barrels. Depending on the actual specific gravity of these refined petroleum products, which has not been recorded, the exact number of barrels might be higher or lower than that figure. Using this conversion rate gives a lower figure than when applying an industry standard ‘product basket’ conversion factor of 8.0 barrels per ton […]. Approximate conversion factors for specific refined petroleum products range from 6.4 barrels per ton for residual fuel oil to 8.4 barrels per ton for gasoline. A couple of experts did not agree with the basis for the above conversion rates and calculations.”
On 24 July 2020, 43 UN Member States sent a report to the 1718 Committee detailing some 56 illicit shipments of refined petroleum products into the DPRK during the first five months of 2020. For 20 of those shipments, satellite imagery was provided as evidence. The States estimated that these illicit shipments together with the deliveries reported to the Committee by China and the Russian Federation amounted to between 600,000 and 1.6 million barrels. As the aggregate amount of refined petroleum products sold, supplied, or transferred to the DPRK had thus breached the annual cap of 500,000 barrels, the 43 States requested that the Committee notify UN Member States that all deliveries of refined petroleum products to the DPRK must immediately be halted. In addition, they requested the Chair of the Committee to issue a Committee press release to inform the general public of the information. On 27 July 2020, the Russian Federation and China each wrote to the 1718 Committee calling into question the objectivity, accuracy, and reliability of the report of the 43 States and noting that there was not enough imagery evidence for the shipments to reach a conclusion that the annual cap had been exceeded. Both countries also pointed out that they provided the information on refined petroleum products exported to the DPRK in tons and that the Committee had “yet to reach an agreement on the conversion rate between ton and barrel”, and that any attempts to convert the amount in barrels was “ill-founded”. Both States therefore requested the Panel of Experts to fully reflect their comments in its 2020 mid-term report to the Security Council.
Ambassador Heusgen, as Chair of the 1718 Committee, was unable to resolve the ton to barrel conversion issue despite extensive efforts. On 17 November 2020, he therefore submitted the question to the Security Council. After the meeting, he addressed the media before the Council chamber saying:
“Today, in the Security Council, under ‘any other business’, I again raised the issue of the so-called ‘conversion rate’ in the DPRK context. This sounds a bit technical and let me put this into context. You know that the ballistic missile programme of North Korea and the nuclear programme, they are a threat to peace and security and also there are sanctions that have been adopted by the Security Council in 2017 to try and stop this programme. The Council decided, as one of the measures, to place a cap on the export of petroleum in reaction to the DPRK nuclear test in 2017. For the DPRK sanctions regime to be effective, all Member States must abide by these resolutions and the sanctions in the resolutions and this includes the obligation to notify the Sanctions Committee of exports of petroleum to the DPRK in the unit of barrels. Russia and China have so far refrained from reporting in barrels – they report in tons. Despite numerous attempts, the issue has been on the agenda for no less than 3 years to find an agreement on a conversion rate, Russia and China have been stalling the process. As a result, the UN cannot determine conclusively whether the cap has been reached. This undermines this Council’s decision to place a cap on the oil export, and, more broadly, this damages the credibility of the Sanctions Committee and the Council. As Chair of the Sanctions Committee, we have worked closely with both delegations to find a compromise; and while this should not be a complicated matter to solve, it has become clear that the two delegations are politicising this topic. So, it was raised again, and there was broad support for the Chair of the Sanctions Committee, not only to raise it but that this issue is finally resolved, but both China and Russia still stalled today.”
In response to Ambassador Heusgen’s statement, a spokesperson for China’s UN mission said that the resolution imposing the refined petroleum cap did not specify what unit of measurement should be used and that negotiations on a conversion rate involved “complicated technical issues” and that it was normal that relevant parties had differences. The spokesperson accused Germany of misusing its position as chair of the 1718 Committee “by continuously interrupting the ongoing in-depth exchange among relevant parties on this issue”, adding that such moves “will never bring the committee any closer to an agreement.”
Ambassador Heusgen’s statement was remarkable in that it expressly and openly criticised two permanent members of the Security Council for not abiding by Security Council sanctions resolutions and thus damaged the credibility of the Sanctions Committee and the Security Council itself. Without regard for diplomatic etiquette, he accused the Russian Federation and China of “politicising this topic” and “stalling the process”. Perhaps even more remarkable was the fact that for almost three years the members of the Security Council were unable to agree on a ton to barrel conversion rate, especially as there are commercial industry standards in place to convert tons in barrels – standards that are also used by Chinese and Russian energy companies.
The question was never whether Chinese and Russian exports of refined petroleum products had exceeded the 500,000-barrel limit per year. In 2018, the two countries together exported 41,458.715 tons of refined petroleum products to the DPRK, in 2019 they exported 56,206.92 tons, and in the period from 1 January to 31 August 2020 they exported 17,294.146 tons. Irrespective of which conversion factor between 6.4 barrels per ton for residual fuel oil to 8.4 barrels per ton for gasoline was applied, in no scenario would the 500,000-barrel limit have been breached. China and the Russian Federation never proposed any particular conversion rate of their own. They also did not put forward any reasons that may have prevented them from submitting their reports in barrels. It must thus be concluded that the two countries used the conversion rate issue as part of a strategy to prevent the 1718 Committee Secretariat from notifying the UN Member States that the annual cap of 500,000 barrels had been reached and thus triggering an immediate export stop for refined petroleum products to the DPRK. This becomes clear from the Russian statement that “[w]ithout the aforementioned notification, export of refined petroleum products to the DPRK is fully in line with the requirements of the 1718 sanctions regime.” This provided leeway not only for the officially notified exports but also for the illicit deliveries through ship-to-ship transfers. In resolution 2397 (2017), for example, the Security Council decided that Member States shall seize, inspect, and freeze (impound) in their ports and their territorial waters any vessel that is engaged in the delivery of petroleum to the DPRK. However, that obligation applied only to vessels that were involved in “prohibited” activities. As long as there was no notification by the Committee Secretariat that the export cap had been reached, the export of refined petroleum products was not formally “prohibited”.
The prohibition of petroleum exports to the DPRK is a good example of (permanent) members of the Security Council voting to put in place a sanctions regime, only to thwart it in practice. As stated by Ambassador Heusgen, such behaviour damages the credibility of the Security Council.
Category: United Nations