Monday, July 31, 2017

Kiwi firm investigated after plane ends up in North Korea

A New Zealand manufacturer is being investigated for allegedly exporting aircraft parts to North Korea and potentially breaching United Nations sanctions.

A Hamilton-based Pacific Aerospace executive expressed shock when one of its planes was spotted at a North Korean air show in September 2016 - a potential breach of international sanctions against the hermit state.

A UN Security Council report included a chain of emails that suggest the company not only knew one of its planes was in North Korea months prior, but was planning to provide parts and engineering training.

A New Zealand-made Pacific Aerospace P-750 XSTOL was spotted at North Korea's first airshow in October 2016.

Pacific Aerospace chief executive Damian Camp with a P-750, the type of plane spotted at a North Korean airshow in October 2016.

New Zealand Customs has confirmed it is investigating Pacific Aerospace for potential unlawful exports.

A UN Security Council report from February 2017 - written by a panel of experts tasked with investigating sanction breaches - says Pacific Aerospace sold and delivered the P-750 XSTOL aircraft to a Chinese company in September 2015.

A month later, it was then sold to another company, Beijing Freesky Aviation, and arrived in North Korea by December 2015.

UN sanctions prohibit the export of certain luxury goods to North Korea.  Aircraft fall into New Zealand's luxury goods category, but not China's.

The report says the case highlighted a trend whereby luxury items in manufacturer's' countries are transferred to third countries with different criteria for luxury goods prior to their end use in North Korea. 

When the plane's appearance at the Wonsan Air Festival first made headlines in October 2016, Pacific Aerospace director Damian Camp told The Washington Post he was "completely mystified" to discover it was in North Korea, bearing the country's flag.

It was still registered with the Chinese civil aviation authority, he said. 

Emails from January 2016, attached to the UN report, show Pacific Aerospace was aware of the plane's presence in North Korea and planned, along with its Chinese partner, to provide a replacement flap motor, tools and training to fix a problem with the aircraft.

"[Name redacted] is not able to travel to North Korea to undertake the replacement of the flap motor.

"We are planning for [name redacted] to deliver training on how to replace the flap motor and he will provide the necessary tools for one of the BGAC reassembly team to be able to replace the flap motor in North Korea," an email from Pacific Aerospace to a Chinese counterpart says.

BGAC is a subsidiary of Beijing Automotive, Pacific Aerospace's Chinese business partner.  

Speaking at the company's Hamilton office, Camp declined to comment.

"I'm not prepared to comment on it while Customs are going through their process"

The direct or indirect supply of aircraft, related parts and aerospace training to North Korea is a violation of UN Security Council Resolution 1718.

The 2006 resolution was agreed on by UN member states in response to claims North Korea had tested a nuclear weapon.

The New Zealand Ministry of Foreign Affairs and Trade declined an interview, but in a statement said it is for New Zealand to determine any breach of the country's sanction law. 

Under New Zealand law, a company which breaches a UN-mandated ban can be fined up to $100,000.

Customs declined to comment further due to an ongoing investigation.

New Zealand was a non-permanent member of the UN Security Council from January 2015 to December 2016, and affirmed stronger sanctions on exporting luxury goods to North Korea during that time.

University of Waikato law professor Al Gillespie said it would be a bad look for New Zealand if any breach of sanction were not fully investigated.

"You probably do not have a more serious issue in the world right now than dealing with the North Korean nuclear threat.

"Any infraction is serious ... If [Pacific Aerospace] sold it to a third party not knowing that it went to a prohibited party, I think that would be a good excuse.

"But if they then found out it was in the wrong hands, and they continued to supply parts to it … then a serious infraction would have occurred."

On Saturday, North Korean leader Kim Jong Un announced a successful test flight of an intercontinental ballistic missile with a claimed capability of reaching the US mainland. 

In response to the increasing threat, the US Air Force flew two bombers over the Korean peninsula on Sunday.

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