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Project Dory Monitoring 23 August 2017
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U.S. Treasury Sanctions Chinese, Russian Firms for Aiding North Korea
Aug 23, 2017 | The Wall Street Journal
By Aruna Viswanatha and Ian Talley
The U.S. on Tuesday targeted a host of Chinese and Russian firms and related individuals it accuses of aiding Pyongyang, expanding its broader efforts to clamp down on financing critical to North Korea’s nuclear-weapons program. -
China bristles at U.S.-imposed sanctions on North Korea trade
Aug 23, 2017 | The Washington Post
By Simon Denyer
China opposes a U.S. move to sanction companies and individuals trading with North Korea, and says the decision by the Trump administration will damage Sino-U.S. ties. -
Tillerson says talks with N.Korea may be close, notes ‘restraint’
Aug 23, 2017 | AFP ( In Rising Sun Overport)
By Dave Clark
The United States said Tuesday that talks with North Korea may be possible “in the near future” after Pyongyang reacted to tough new UN sanctions with a level of restraint. -
US targets Chinese, Russian entities funding North Korea's nukes
Aug 23, 2017 | CNN
By Zachary Cohen
The US Treasury Department announced new sanctions Tuesday targeting Chinese and Russian entities that help fund and facilitate North Korea's nuclear and ballistic missile programs. -
The owner of a Long Island home may have helped North Korea dodge sanctions: NBC
Aug 23, 2017 | CNBC
By Angelica LaVito
Sun Sidong has a Long Island home listed for nearly $1.3 million. He is also linked to a company that is suspected of helping North Korea dodge sanctions, NBC News reports. -
Treasury slaps new sanctions on groups allegedly supporting North Korea
Aug 22, 2017 | CBS News
By John Bat
U.S. Department of the Treasury has identified a number of Russian and Chinese entities allegedly aiding North Korea and is vowing to place new pressures on them in an effort to curb North Korea's weapons program. -
DOJ Seeks $11 Million from Firms Accused of Aiding North Korea
Aug 22, 2017 | Courthouse News
By Britain Eakinf
The U.S. attorney’s office on Tuesday filed two forfeiture complaints seeking almost $11 million from companies accused of laundering U.S. dollars to benefit North Korea, in violation of sanctions tied to the country’s missile programs. -
Chinese container port growth surges on strong US demand
Aug 22, 2017 | Journal Of Commerce
Growth at China’s top 20 container ports is gaining momentum, with volume in July up 8.7 percent year over year, building on the 7.5 percent growth in container volumes in the first half. -
Cooler temperatures dampen China coal rally, but for how long?
Aug 22, 2017 | Reuters (in Energy World)
Prices shot to record highs last week, reaching 603 yuan a tonne ($90.62) amid concern about tightening output as the government launched sweeping safety checks across major producing province Shanxi after a fatal accident at a mine. -
China defends ally Pakistan after Trump criticism
Aug 23, 2017 | Reuters
By Michael Martina
China defended its ally Pakistan on Tuesday after U.S. President Donald Trump said the United States could no longer be silent about Pakistan's "safe havens" for militants and warned it had much to lose by continuing to "harbor terrorists". -
After U.S. destroyer collision, Chinese paper says U.S. navy a hazard
Aug 23, 2017 | Reuters
By Ben Blanchard
The U.S. navy's latest collision at sea, the fourth in its Pacific fleet this year, shows it is becoming an increasing risk to shipping in Asia despite its claims of helping to protect freedom of navigation, an official Chinese newspaper said. -
New Balance Wins $1.5 Million in Landmark China Trademark Case
Aug 22, 2017 | The New York Times
By Sui-Lee Wee
A Chinese court has ruled that three domestic shoemakers must pay New Balance $1.5 million in damages and legal costs for infringing the American sportswear company’s signature slanting “N” logo, in what lawyers said was the largest trademark infringement award ever granted to a foreign business in China. -
Warming Arctic spurs battles for riches, shipping routes
Aug 22, 2017 | AP (In ABC News)
By Frank Jordans
From a distance, the northern shores of Baffin Island in the Arctic appear barren — a craggy world of snow-capped peaks and glaciers surrounded by a sea of floating ice even in the midst of summer. -
Threat of price war clouds horizon for Maersk shipping business
Aug 22, 2017 | Reuters
By Jacob Gronholt-Pedersen
A.P. Moller-Maersk has been fortified by the $7.5 billion sale of its oil and gas business to France's Total, but the company's main sea freight business faces the threat of a new price war in a consolidating industry.
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U.S. Treasury Sanctions Chinese, Russian Firms for Aiding North Korea
Aug 23, 2017 | The Wall Street Journal
By Aruna Viswanatha and Ian Talley
WASHINGTON—The U.S. on Tuesday targeted a host of Chinese and Russian firms and related individuals it accuses of aiding Pyongyang, expanding its broader efforts to clamp down on financing critical to North Korea’s nuclear-weapons program.
The U.S. Treasury’s Office of Foreign Assets Control added 10 firms, including Chinese coal importers and Russian fuel exporters, to its North Korea sanctions list. Federal prosecutors also filed a pair of cases in federal court in Washington seeking tens of millions of dollars in penalties from these companies in addition to seizing $11 million in their funds already frozen at U.S. banks.
The cases target Chinese firms that allegedly had imported $700 million in North Korean coal since 2013 and a Russian-operated firm allegedly helping Pyongyang procure fuel. In all, the U.S. alleges that the coal trade generates more than $1 billion in revenue a year for North Korea, which helps to fuel its weapons programs.
The actions mark a promised escalation of a growing U.S. sanctions regime aimed at North Korea, which in recent months has launched intercontinental ballistic missiles that U.S. officials say put America at risk of a nuclear attack. It also marks an effort by the Trump administration to ensnare North Korea’s supporters—particularly in China—in an effort to crack down on Kim Jong Un’s regime.
“Treasury will continue to increase pressure on North Korea by targeting those who support the advancement of nuclear and ballistic missile programs, and isolating them from the American financial system,” Treasury Secretary Steven Mnuchin said in a statement. “We are taking actions consistent with U.N. sanctions to show that there are consequences for defying sanctions and providing support to North Korea, and to deter this activity in the future.”
The United Nations earlier this month banned coal exports from North Korea. A U.N. panel has complained that compliance among some of its members has been spotty. The Trump administration has been particularly frustrated with China’s cooperation with North Korea. But China officials have agreed to enforce the latest measures amid growing international pressure.
“These complaints show our determination to stop North Korean sanctioned banks and their foreign financial facilitators from aiding North Korea in illegally accessing the United States financial system to obtain goods and services in the global marketplace,” said Channing Phillips, the U.S. Attorney in Washington, D.C., whose office brought the cases.
North Korean officials didn’t immediately appear to comment on the U.S. sanctions. Earlier Tuesday, Pyongyang attacked President Donald Trump in the state media, branding his approach to the crisis on the Korean Peninsula “unimaginably reckless.”
A spokesman for the Chinese embassy in Washington said Beijing opposes unilateral sanctions, saying such “long-arm jurisdiction” could affect the U.S.-China relationship.
“We strongly urge the U.S. to immediately correct its mistake, so as not to impact bilateral cooperation on relevant issues,” the spokesman said. Beijing, he added, would investigate any potential violations of U.N. sanctions under its own laws.
Anthony Ruggiero, a former senior U.S. Treasury official now at the Foundation for Defense of Democracies, said the latest sanctions move was a strong step forward in the administration’s broader pressure campaign. “It’s definitely a message to Beijing and Moscow they can’t continue to facilitate Pyongyang.”
Analysts say efforts by the U.S. attorney’s office, which has been working on cases focusing on North Korea’s financial conduits for more than a year, are proving a potent diplomatic weapon in the White House’s broader sanctions offensive.
Sanctions not only make it illegal for companies operating in the U.S. to do business with designated entities, but are meant to freeze those firms and individuals out of global markets. Banks, for example, would no longer be able to clear wire transfers through the U.S., the world’s most important financial market, for any of those designated companies. And even though the asset seizures might seem relatively small in the context of North Korea’s total cross-border trade and finance, the forfeiture actions are a signal to other companies of the risks of doing business for Pyongyang.
The complaint against the Chinese firms, Dandong Zhicheng, also described as Dandong Chengtai, and several related companies, provided new details of how Pyongyang is funding its nuclear program. Much of the funding, according to prosecutors, comes through the mining and sale of coal to front companies—firms designed to obscure business dealings—who then pay for the coal through the purchase of other goods bound for North Korea.
Treasury named Dandong Zhicheng and its majority owner, Chi Yupeng, to its North Korea sanctions list, along with two other Chinese coal importers, JinHou International Holding Co., and Dandong Tianfu Trade Co.
Washington-based C4ADS, which studies transnational threats, says Dandong Zhicheng is the biggest importer of North Korean goods into China. In the complaint, prosecutors said North Korea uses the company to not only supply cash but also as a broker that purchases goods for North Korean use including sugar, rubber, petroleum products and soybean oil. The Wall Street Journal attempted to contact the company via an email listed on its now-defunct website and it didn’t respond to a request for comment.
The complaint sought to forfeit $4 million to the U.S. government in funds Dandong Chengtai allegedly wired through a foreign bank account routed through a U.S. correspondent bank on June 21. The government seized those funds as they were in transit based on a warrant obtained in May to secretly monitor and freeze the funds.
One person described in the complaint as “Defector 1, who has firsthand knowledge” of North Korea’s financial dealings, said the government relies on the exports of coal “as its primary means of obtaining access to foreign currency,” and that the North Korean military controls the amount of coal produced and its export, according to the complaint.
The defector told investigators that “over 95%” of North Korea’s foreign currency earnings from coal exports go toward advancing North Korea’s military and North Korea’s nuclear missiles and weapons programs.
Dandong Zhicheng had a page on Alibaba Group Holding Ltd.’s e-commerce website, in which it advertised it was a “professional company of trading the North Korea Briquettes,” and advertised the sale of North Korean coal in U.S. dollars, according to the complaint. The page is no longer accessible on Alibaba’s website. An Alibaba representative had no immediate comment.
In a separate case, prosecutors also sought to forfeit around $7 million in wire transfers being held at a U.S. bank that had been intended for Velmur Management Pte. Ltd., a Singapore-registered firm that describes itself as a real-estate company but whose business “focuses on facilitating the laundering of funds for North Korean financial facilitators,” prosecutors said.
Velmur, an associated firm based in Singapore called trans-Atlantic Partners, and three Russian officials involved with the companies were added to Treasury’s sanctions list Tuesday.
According to the complaint, Velmur received a $230,000 wire from Dandong Zhicheng in September 2016, and has received U.S. dollar payments on behalf of North Korean entities.
Between February and April, according to the complaint, Velmur sent seven wire transfers totaling $6.8 million to IPC, a Russian company the Treasury Department sanctioned in June for shipping petroleum products to North Korea.
Other entities sanctioned by Treasury include China-based Mingzheng International Trading Ltd., a firm prosecutors accused in June of operating as a front company helping launder U.S. dollars for North Korea’s Foreign Trade Bank.
It also named China-based Dandong Rich Earth Trading Co., and Russia’s Gefest-M and its director for procuring metals for a North Korean company involved in the country’s weapons program. Those companies couldn’t be immediately reached for comment.
No Chinese banks were named among those sanctioned, though some U.S. analysts argued the U.S. will eventually need to expand its targets to Chinese banks to more forcefully crack down on North Korean funding. To date, the U.S. has sanctioned one Chinese bank, Bank of Dandong.
https://www.wsj.com/articles/u-s-treasury-sanctions-chinese-russian-firms-for-aiding-north-korea-1503415117?mg=prod/accounts-wsj
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China bristles at U.S.-imposed sanctions on North Korea trade
Aug 23, 2017 | The Washington Post
By Simon Denyer
BEIJING — China opposes a U.S. move to sanction companies and individuals trading with North Korea, and says the decision by the Trump administration will damage Sino-U.S. ties.
The Treasury Department placed sanctions Tuesday on 10 companies and six individuals from China and Russia that it said had conducted business with North Korea in ways that advanced the country’s missile and nuclear weapons program.
But the Chinese Embassy in Washington insisted its government fully implemented U.N. Security Council resolutions on North Korea, and would punish anyone caught violating the Security Council sanctions under Chinese law.
“China opposes unilateral sanctions out of the U.N. Security Council framework, especially the ‘long-arm jurisdiction’ over Chinese entities and individuals exercised by any country in accordance with its domestic laws,” it said in a statement carried by the China Daily newspaper.
“We strongly urge the U.S. to immediately correct its mistake, so as not to impact bilateral cooperation on relevant issues.”
Among the sanctioned companies was Dandong Zhicheng Metallic Material Co., also known as Dandong Chengtai, one of the largest importers of North Korean coal, while its main shareholder was also individually targeted.
In a related complaint filed by the Justice Department on Tuesday, the U.S. government is seeking $4 million from the company, accusing it of importing North Korean coal and then sending a wide array of products — cellphones, luxury items, rubber and sugar — to North Korea.
In August, the Security Council agreed to a total ban on coal imports from North Korea; in the past, a limited trade had been allowed, provided it was purchased from a sanctioned North Korean company and proven to be for “livelihood purposes.”
In practice, though, experts say that loophole was exploited to facilitate a profitable trade that generated $1 billion a year for North Korea.
In a June report by the Washington-based research group C4ADS, Dandong Zhicheng was cited among a group of Chinese companies that are pivotal to North Korea’s ability to circumvent international sanctions and buy illicit goods. The report said targeting those companies could even cause North Korea’s entire overseas network to collapse.
Dandong Zhicheng alone accounted for 9.2 percent of North Korea’s total exports to China last year, according to documentation that C4ADS reviewed. Almost all — 97 percent — of this was North Korean coal, totaling about $250 million annually.
The company’s website lists a wide array of interests, including metals, chemicals, rubber, furniture, computing equipment, office supplies, clothing and toys. It says it does a “small amount of business” in North Korean border trade.
The company’s main shareholder, Chi Yupeng, won an award from the Dandong city government as a leading entrepreneur in 2005, another award for his “remarkable contribution to enterprise” in 2008 and a third for “starting a foreign trade enterprise” in 2009.
Two other Chinese companies, Dandong Tianfu Trade and Jinhou International Holdings were sanctioned for their part in the coal trade. Together, the three companies imported nearly $500 million of North Korean coal between 2013 and 2016, the Treasury Department said.
Dandong Rich Earth Trading Co. was sanctioned for buying vanadium ore from a company tied to North Korea’s atomic energy agency, while Mingzheng International Trading was accused of facilitating dollar transactions on behalf of North Korea’s proliferation network.
The companies either declined to comment, hung up or did not pick up the phone when contacted by the Washington Post.
There was very little reporting of the U.S. move in Chinese-language media on Wednesday morning, but China Daily carried an opinion piece by the deputy editor of its U.S. edition, Chen Weihua, in which he argued the U.S. decision would “undermine cooperation” between Washington and Beijing.
“The U.S. has long believed that sanctions are a silver bullet,” he argued. “But its past track records have shown that the majority of sanctions not only failed but caused humanitarian disasters in other countries.”
There is little doubt, he added, that such secondary sanctions will have little or no effect in convincing North Korea to change course.
Chen also wrote that the Obama administration’s decision to help topple Libyan leader Muammar Gaddafi after he abandoned his nuclear weapons program — and his subsequent death at the hands of a mob in 2011 — had damaged the U.S. government’s credibility.
Lu Chao, a Korean peninsula expert at the Liaoning Academy of Social Sciences, said Washington’s decision to impose unilateral sanctions was inappropriate, unacceptable and “very domineering.”
“China is strictly implementing the U.N. resolution. Though we can’t 100 percent exclude the possibility of individuals having underground deals violating the Ministry of Commerce’s regulations, the United States being so far away doesn’t have a proper reason to take sanction measures unilaterally,” he said. “They should inform the Chinese government and let the latter deal with it.”
China accounts for roughly 90 percent of North Korean trade, but announced this month it was suspending imports of iron ore, iron, lead, coal and seafood products from North Korea, to comply with U.N. sanctions.
China’s imports from North Korea fell to $880 million in the six months that ended in June, down 13 percent from a year earlier, official figures show. But Chinese exports rose 29 percent to $1.67 billion in the first six months of the year, pushing total trade between the two countries up 10 percent.
China is very reluctant to do anything that might destabilize the regime, which is a long-standing ally. It blames American hostility toward Pyongyang for forcing the regime to develop its nuclear program, and is urging dialogue to reduce tensions.
Yang Xiyu, a North Korea expert at the China Institute of International Studies in Beijing called the U.S. move counterproductive, and said Washington should have worked more closely with Beijing.
“I think this shows the frustration from the U.S toward Beijing, that China cannot to play as the U.S wanted,” he said, arguing it would do nothing to dissuade North Korea from pursuing nuclear weapons. “It’s a superfluous measure that may only worsen the Sino-U.S. relationship and destroy the foundation of trust for cooperation between the two countries.”
Cheng Xiaohe, a North Korea expert at Renmin University of China in Beijing, said the U.S. government did not have factual evidence these companies were violating sanctions.
“The Chinese government will not sit by and do nothing if the sanctions are implemented without strong evidence,” he said.
Shirley Feng and Luna Lin contributed to this report.
https://www.washingtonpost.com/32bfba3c-87ba-11e7-9ce7-9e175d8953fa_story.html?utm_term=.7c62dd895e37
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Tillerson says talks with N.Korea may be close, notes ‘restraint’
Aug 23, 2017 | AFP ( In Rising Sun Overport)
By Dave Clark
The United States said Tuesday that talks with North Korea may be possible “in the near future” after Pyongyang reacted to tough new UN sanctions with a level of restraint.
But, in keeping with a “dual track” strategy of reaching out to the North diplomatically while increasing economic pressure, Washington also imposed new sanctions on Chinese and Russian firms suspected of doing business with Pyongyang.
Briefing reporters, US Secretary of State Rex Tillerson made a point of acknowledging that Kim Jong-Un’s regime has not carried out any new nuclear or ballistic missile tests since the UN Security Council imposed a new round of tougher sanctions last month.
“I am pleased to see that the regime in Pyongyang has certainly demonstrated some level of restraint that we’ve not seen in the past,” Tillerson said.
“We need to see more on their part, but I want to acknowledge the steps they’ve taken thus far. I think it’s important to take note of that.”
US officials told AFP that Tillerson was not thanking Pyongyang, nor making any concession on Washington’s determination to halt Kim’s missile program and negotiate the denuclearization of the Korean peninsula.
But they said he did want to note what the US administration sees as a lowering in immediate tensions, in the hope that the isolated authoritarian regime will see an opening that could lead to dialogue.
– ‘Ready to restrain’? –
Tensions between North Korea and the United States and its allies soared last month after Pyongyang tested two long-range missiles that appeared to bring US cities within its range.
US President Donald Trump vowed to respond with “fire and fury,” raising fears of a devastating regional conflict, and the UN Security Council scrambled to impose new punitive measures on the North.
Kim’s regime later postponed a threat to fire missiles towards the US Pacific island territory of Guam, and Washington said it would be open to dialogue if Pyongyang were to take steps to calm tensions.
On Tuesday, Tillerson suggested that progress can now be made.
“I think it is worth noting that we have had no missile launches or provocative acts on the part of North Korea since the unanimous adoption of the UN Security Council resolution,” he said.
“And I want to take note of that. I want to acknowledge it.”
“We hope that this is the beginning of this signal that we’ve been looking for — that they are ready to restrain their level of tensions, they’re ready to restrain their provocative acts and that perhaps we are seeing our pathway to sometime in the near future having some dialogue.”
Just before Tillerson alluded to the existence of a carrot to tempt North Korea, however, the US Treasury brandished its stick.
The agency slapped sanctions on 16 Chinese and Russian individuals and companies, accusing them of supporting North Korea’s nuclear program and attempting to evade US sanctions.
The sanctions are part of a broader US effort to disrupt the funding of North Korea’s weapons programs through its export of natural resources such as coal and minerals and foreign-based financial transactions undertaken for North Korean interests.
“It is unacceptable for individuals and companies in China, Russia, and elsewhere to enable North Korea to generate income used to develop weapons of mass destruction and destabilize the region,” Treasury Secretary Steven Mnuchin said.
Trump has urged Beijing, North Korea’s only major ally, to bring greater pressure to bear in reining in its neighbor’s nuclear efforts, suggesting that the United States may offer concessions on trade in return.
– Targets of sanctions –
The sanctions block those targeted from accessing much of the global financial system and freeze any assets they might hold in areas under US jurisdiction.
Among those hit was Russian national Ruben Kirakosyan and his Moscow-based company Gefest-M LLC, which the Treasury accuses of procuring metals for a company involved in North Korea’s nuclear weapons program known as Korean Tangun Trading Corp.
Also targeted is China’s Dandong Rich Earth Trading, which the United States says has acted on behalf of North Korea’s General Bureau of Atomic Energy — responsible for the North’s nuclear program — and has facilitated prohibited North Korean exports of vanadium ore.
A third company, Mingzheng International Trading Limited, which maintains offices in Hong Kong and mainland China, is in fact a front for Foreign Trade Bank, North Korea’s main foreign exchange bank, the Treasury said.
The Treasury also alleged that three Chinese companies — Dandong Zhicheng Metallic Materials, JinHou International Holding and Dandong Tianfu Trade — had collectively imported nearly a half billion dollars’ worth of North Korean coal between 2013 and 2016
http://risingsunoverport.co.za/afp/298600/tillerson-says-talks-with-n-korea-may-be-close-notes-restraint
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US targets Chinese, Russian entities funding North Korea's nukes
Aug 23, 2017 | CNN
By Zachary Cohen
Washington (CNN)The US Treasury Department announced new sanctions Tuesday targeting Chinese and Russian entities that help fund and facilitate North Korea's nuclear and ballistic missile programs.
Coupled with the United Nations Security Council resolution passed earlier this month, Tuesday's sanctions are intended to further isolate the companies and individuals outside of North Korea that are providing key support to Pyongyang's nuclear ambitions.
"As a result of today's action, any property or interests in property of the designated persons in the possession or control of US persons or within the United States must be blocked, and US persons are generally prohibited from dealing with them," the Treasury Department said in a statement.
Specifically, the sanctions are aimed at 16 entities and individuals that assist "already designated persons who support North Korea's nuclear and ballistic missile programs, deal in the North Korean energy trade, facilitate its exportation of workers, and enable sanctioned North Korean entities to access the US and international financial systems," the Treasury Department said.
"Treasury will continue to increase pressure on North Korea by targeting those who support the advancement of nuclear and ballistic missile programs and isolating them from the American financial system," Treasury Secretary Steve Mnuchin said.
Chinese and Russian entities -- including energy companies, coal and oil traders, labor exporters and facilitators of sanctions evasion -- were listed as the primary targets of Tuesday's sanctions.
Like the UN resolution passed earlier this month, the Treasury Department identified shutting down elements of North Korea's coal trade as a priority. The coal industry generates more than $1 billion in revenue per year for Kim Jong Un's regime, according to the US Treasury, and represents a significant part of the funding for Pyongyang's missile and nuclear programs.
The latest round of US sanctions singles out three Chinese coal companies -- Dandong Zhicheng Metallic Materials Co., Ltd. ("Zhicheng"), JinHou International Holding Co., Ltd. and Dandong Tianfu Trade Co., Ltd. -- which were collectively responsible for importing nearly half a billion dollars' worth of North Korean coal between 2013 and 2016.
The US Treasury concluded that these companies "have sold, supplied, transferred, or purchased coal or metal, directly or indirectly, from North Korea, and the revenue may have benefited the nuclear or ballistic missile programs."
Moscow-based company Gefest-M LLC and its director, Russian national Ruben Kirakosyan, were also designated by the US Treasury for facilitating the sale of metals to a North Korean entity tied to the country's missile program.
"It is unacceptable for individuals and companies in China, Russia and elsewhere to enable North Korea to generate income used to develop weapons of mass destruction and destabilize the region," Mnuchin said. "We are taking actions consistent with UN sanctions to show that there are consequences for defying sanctions and providing support to North Korea and to deter this activity in the future."
Whether these sanctions can help slow Pyongyang's rapidly developing nuclear and missile programs or help pressure North Korea to the negotiating table remains to be seen -- especially in light of the rogue nation's recent claims that it has successfully miniaturized a nuclear weapon.
While some experts believe it may have the technology, others caution that even if it doesn't, North Korea should be taken at its word.
While the White House and US military officials still insist that all options are on the table when it comes to North Korea, Secretary of State Rex Tillerson said on Tuesday that Pyongyang's response to UN sanctions levied in July could be a reason for optimism.
Tillerson noted that "we have had no missile launches or provocative actions" since the unanimous adoption of a UN Security Council resolution sanctioning North Korea in July. He added that he was pleased "to see the regime in Pyongyang has certainly demonstrated some level of restraint that we have not seen in the past."
"This is the beginning of the signal we have been looking for," Tillerson said, noting that North Korea is ready to restrain its "provocative acts" and that "perhaps we're seeing a pathway to, sometime in the near future, to having some dialogue."
And despite concerns that time for a diplomatic solution may be running out, several analysts say that sanctions targeting the heart of North Korea's missile funding should still play a key role in US strategy going forward.
"Sanctions against companies and individuals that facilitate North Korea's sanctions evasion is the best way to address Pyongyang's nuclear weapons and missile programs," said Anthony Ruggiero, a former deputy director of the US Treasury Department and an expert in the use of targeted financial measures for Foundation for Defense of Democracies.
"New sanctions should be part of a robust sanctions campaign that includes engaging those who continue business with North Korea and present a choice: continue that business or work with the United States -- they cannot do both," he told CNN.
Particularly when it comes to Russia, the sanctions are a warning, Ruggiero said.
"The Trump administration is sending a message to the Russian leadership to curb its activities with North Korea by targeting Russian companies and individuals for facilitating North Korea's proliferation activities and purchase of commodities subject to US sanctions," he said. "This is the second action against Russia following the sanctions in early June for similar activities."
In May, US Secretary of State Rex Tillerson said the United States will try to further stymie North Korean operations by punishing third parties that help Pyongyang skirt sanctions.
"It's a pressure campaign that has a knob on it," Tillerson told State Department employees at the time. "I'd say we're at about dial setting five or six right now."
The US has tried to turn up the heat with sanctions and tough talk in recent months amid escalating tensions with Pyongyang over its rapidly developing missile program.
However, Pyongyang has weathered years of sanctions in its quest for a nuclear weapon capable of reaching the US, and attempts to cut off its revenue streams have proven to be similar to a game of international whack-a-mole.
"This is a regime that's really good at finding new, creative illicit ways to earn hard currency, and sometimes that's coming up with new activities and sometimes it's a matter of shifting geographic locations of those activities," Sheena Greitens, a professor at the University of Missouri who has been studying North Korea's illicit financial activities for the last 10 to 15 years, told CNN last month.
"If you wanted to try to pressure and contain North Korea's ability to earn from these illicit activities, you'd have to also close off its ability to adapt," she said.
North Korea has been accused of crimes such as hacking banks, selling weapons, dealing drugs, counterfeiting cash and even trafficking endangered species -- operations that are believed to rake in hundreds of millions of dollars and are often disguised within licit trade operations.
That money helps pay for the country's nuclear and missile programs, both of which Pyongyang believes it needs in order to deter any US-led attempt at regime change, experts say. North Korea's nuclear aspirations have progressed forward rapidly despite sanctions, and Pyongyang has resisted any US attempts at negotiation that mandates de-nuclearization up front.
President Donald Trump has long called on China to put more pressure on North Korea -- but ultimately, analysts say the US will have to convince China to not only target its own companies but to take comprehensive action that could disrupt the power balance in the region.
Beijing accounts for about 85% of Pyongyang's imports, according to UN data. That's a lifeline for the North Korean economy, one which prevents the US from really putting the squeeze on North Korea.
A Chinese government official said last month that China-North Korea trade was worth $2.6 billion in the first half of 2017, up about 10% over the same period last year.
But coal imports slumped by 75%, suggesting Beijing is gradually choking off North Korea's biggest source of foreign currency.
Pyongyang's reliance on Chinese entities also reveals an area of vulnerability, according to a recent study from C4ADS, a non-partisan Washington-based research group focused on exposing illicit trade networks.
"From 2013 to 2016, there were only 5,233 companies within China that either imported goods from, or exported goods to, North Korea. To put that number in perspective, as of 2016, 67,163 Chinese companies exported to South Korea," the report said. "Targeting specific key nodes can have a disproportionate impact."
Experts say Beijing's seriousness about cracking down on its unruly neighbor may be the key to stopping Pyongyang's illicit activities.
"It all comes down to China," Ruggiero told CNN in an interview last month. "In the end it's going to require going after Chinese banks and Chinese companies that are complicit in North Korea's sanction evasion."
http://edition.cnn.com/2017/08/22/politics/us-treasury-sanctions-china-russia-north-korea/index.html
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The owner of a Long Island home may have helped North Korea dodge sanctions: NBC
Aug 23, 2017 | CNBC
By Angelica LaVito
Sun Sidong has a Long Island home listed for nearly $1.3 million. He is also linked to a company that is suspected of helping North Korea dodge sanctions, NBC News reports.
Sun is listed as the owner of Dongyuan Industrial Co., which shares an email address with Dandong Zhicheng Metallic Co.
A Chinese national who has a million-dollar home listed in Long Island, New York, is linked to a company that is suspected of helping North Korea dodge sanctions, NBC News reports.
Sun Sidong is listed as the owner of Dandong Dongyuan Industrial Co., according to Chinese corporate filings, NBC News reports. The company shares an email address with Dandong Zhicheng Metallic Material Co., a Chinese coal exporter that is under suspicion for helping North Korea evade sanctions.
On Tuesday, the Treasury's Office of Foreign Assets Control punished Dandong Zhicheng Metallic Co. for its supposed actions. The company's primary shareholder, Chinese businessman Chi Yupeng, was also punished.
Dandong Zhicheng Metallic Material Co. and four "related front companies" have been targeted since May, when a federal judge issued a ruling allowing prosecutors to secretly monitor their transactions and seize any illegal funds at eight U.S. banks, NBC News reports. The ruling, which didn't allege any wrongdoing by the financial institutions, said the banks had processed more than $700 million in prohibited transactions involving North Korea since 2009.
https://www.cnbc.com/2017/08/22/the-owner-of-a-long-island-home-may-have-helped-north-korea-dodge-sanctions-nbc.html
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Treasury slaps new sanctions on groups allegedly supporting North Korea
Aug 22, 2017 | CBS News
By John Bat
U.S. Department of the Treasury has identified a number of Russian and Chinese entities allegedly aiding North Korea and is vowing to place new pressures on them in an effort to curb North Korea's weapons program.
The Treasury Department's Office of Foreign Assets Control (OFAC) listed ten companies and six individuals in a Tuesday press release that will be slapped with economic sanctions. The sanctions, according to the release, are aimed at adding additional strains on North Korea to help end rapid advancements for a long-range nuclear arsenal.
"It is unacceptable for individuals and companies in China, Russia, and elsewhere to enable North Korea to generate income used to develop weapons of mass destruction and destabilize the region," Treasury Secretary Steve Mnuchin said in the release. "We are taking actions consistent with UN sanctions to show that there are consequences for defying sanctions and providing support to North Korea, and to deter this activity in the future."
The sanctions for the 16 entities, according to the release, complement other U.N. restrictions and executive orders, designed to curb funding of North Korea and, more broadly, the proliferation of weapons of mass destruction by foreign powers.
One of the executive orders mentioned by OFAC was signed by President Obama in March 2016, which implemented strict sanctions on North Korea in response to its missile launches earlier in the year. OFAC also cites another order from President Bush in June 2005 that initiated the freezing of assets against developers of weapons of mass destruction and their abettors.
OFAC's announcement placed the businesses and individuals aiding North Korea into three categories: missile production, coal and oil trading and labor exports.
It accused Dandong Rich Earth Trading Co., Ltd, of supporting North Korea's missile development. The release claimed Dandong had purchased materials from a Korean-state corporation that's responsible for the country's missile production.
Others implicated in support the missile program include Russian national Ruben Kirakosyan, director of Gefest-M LLC, based out of Moscow. China's Mingzheng International Trading Limited was also listed for supporting Foreign Trade Bank, a financial entity linked to waves of capital investment in missile development.
Energy trading was the biggest revelation in the release. OFAC claimed North Korea pockets nearly $1 billion a year by exporting its coal to other countries. It listed some Chinese companies that have been facilitating this, such as Dandong Zhicheng Metallic Materials Co., Ltd, JinHou International Holding Co., Ltd, and Dandong Tianfu Trade Co., Ltd.
Chi Yupeng, a business leader at Zhicheng, was listed for allegedly using "a network of companies to engage in bulk purchases, wire transfers, and other transactions on behalf of North Korean interests."
Russian businessmen Mikhail Pisklin and Andrey Serbin of Transatlantic Partners Pte., Ltd, were identified by OFAC for "operating in the energy industry in the North Korean economy." It accused Singapore-based Velmur Management Pte. Ltd, and its executive director Irina Huish, of circumventing existing sanctions and attempting "to use the U.S. financial system to send millions of dollars in payments on behalf of North Korean-related transactions."
The Trump administration has in the past utilized sanctions to bring North Korea to the negotiating table. At a June congressional hearing, former Exxon Mobil CEO and now Secretary of State Rex Tillerson said the U.S., in order to be successful, would need to collaborate with other countries to cut off North Korea's energy lifeline.
"We are going to have to move to work with others to begin to deny North Korea basic needs like crude oil supplies … whether we are getting cooperation from people or not," he said.
Toward the end of the release, OFAC shined some light on lucrative labor practices connected to Pyongyang. It highlighted Mansudae Overseas Projects Group of Companies, which has allegedly exported North Korean workers to different countries to raise money for the ruling Workers' Party of Korea.
Mr. Trump has placed a responsibility on China to deescalate North Korea's advancing weapons program. "I am very disappointed in China. Our foolish past leaders have allowed them to make hundreds of billions of dollars a year in trade, yet... they do NOTHING for us with North Korea, just talk," Mr. Trump tweeted at the end of July. "We will no longer allow this to continue. China could easily solve this problem!"
https://www.cbsnews.com/news/treasury-calls-entities-supporting-north-korea-by-their-names/
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DOJ Seeks $11 Million from Firms Accused of Aiding North Korea
Aug 22, 2017 | Courthouse News
By Britain Eakinf
WASHINGTON (CN) – The U.S. attorney’s office on Tuesday filed two forfeiture complaints seeking almost $11 million from companies accused of laundering U.S. dollars to benefit North Korea, in violation of sanctions tied to the country’s missile programs.
The complaints alleged Singapore-based Velmur Management and China-based Dandong Chengtai Trading Co., engaged in financial transactions that violated federal money laundering statutes, the North Korean Sanctions and Policy Enhancement Act of 2016 and the International Emergency Economic Powers Act.
“North Korea has used sanctioned state-run banks to work with a host of front companies in order to access the U.S. financial system and evade the U.S. sanctions imposed on these banks and their sanctioned affiliates,” the 33-page complaint against Velmur states.
According to the complaint, Velmur laundered money for sanctioned North Korean banks working to procure products from sanctioned Russian petroleum products supplier JSC Independent Petroleum Company.
The banks allegedly used four front companies – including Transatlantic Partners, which is also named as a defendant in the complaint – to make payments to Velmur, which then wired funds to JSC.
The U.S. government is seeking more than $6.9 million for the alleged illicit wire transfers made to Velmur, which it says were routed through U.S. correspondent bank accounts.
The complaints were filed the same day that the Treasury Department announced new sanctions against Chinese and Russian entities, including 10 third-country companies and six individuals that the agency said support North Korea’s advancement of its nuclear and ballistic missile programs.
According to a Department of Justice news release, North Korean banks have adapted and learned how to evade sanctions to access the international banking system.
“This includes maintaining correspondent bank accounts and representative offices abroad which are staffed by foreign nationals making use of front companies,” the release said. “These broad interwoven networks allow the North Korean banks to conduct illicit procurement and banking activity.”
According to the complaint, North Korea funds its weapons of mass destruction and missile programs with coal, which generates more than $1 billion per year in revenue.
The second complaint takes aim at Dandong Chengtai, one of China’s largest importers of North Korean coal.
According to the FBI, Dandong laundered money through the U.S. on behalf of sanctioned entities — in particular the North Korean Workers’ Party — that conspired with Dandong and other front companies controlled by Chinese national Chi Yupeng to evade U.S. sanctions and access the U.S. financial system.
“We assess that these deceptive practices have allowed millions of U.S. dollars of North Korean illicit activity to flow through U.S. correspondent accounts,” the 31-page complaint states.
The U.S. is seeking more than $4 million that Dandong wired to front company Maison Trading, which is also named as a defendant in the complaint, through U.S. correspondent bank accounts.
According to the Justice Department, financial records show that purchases were destined for North Korea that are well outside the scope of a mineral trading company, including “bulk commodities such as sugar, rubber, petroleum products, and soybean oil, among others.”
U.S. Attorney Channing Phillips cheered the forfeiture complaints Tuesday afternoon.
“These complaints show our determination to stop North Korean sanctioned banks and their foreign financial facilitators from aiding North Korea in illegally accessing the United States financial system to obtain goods and services in the global market place,” Phillips said in a statement.
https://www.courthousenews.com/doj-seeks-11-million-firms-accused-aiding-north-korea/
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Chinese container port growth surges on strong US demand
Aug 22, 2017 | Journal Of Commerce
Growth at China’s top 20 container ports is gaining momentum, with volume in July up 8.7 percent year over year, building on the 7.5 percent growth in container volumes in the first half.
US imports from China were a large part of that growth, rising 7.6 percent year over year in July to 1.8 million TEU, according to PIERS, a sister product of JOC.com within IHS Markit. Despite that growth and reports of record container volumes at US ports that month, spot rates on the trans-Pacific have moved in a narrow range.
The acceleration comes after the Chinese economy beat expectations for GDP growth in the second quarter, as GDP rose 6.9 percent. The higher volumes and economic growth suggest that growth in global container volumes, which was the fastest in six years in the first half at 6.7 percent, according to industry analyst Alphaliner, still has room to run.
The country's top 10 container ports, which include Shanghai and Ningbo-Zhoushan in the Yangtze River Delta; Shenzhen and Guangzhou in the Pearl River Delta; and Qingdao and Dalian in the northern Bohai Rim, together handled a combined 15.6 million TEU in July, up 7.4 percent from the 14.47 million teu handled in July of 2016.
The top 10 box ports by TEU volume were: Shanghai, 3.44 million TEU; Shenzhen, 2.34 million TEU; Ningbo-Zhoushan, 2.18 million TEU; Guangzhou, 1.78 million TEU; Qingdao, 1.55 million TEU; Tianjin, 1.37 million TEU; Xiamen, 9.46 million TEU; Dalian, 8.91 million TEU, Yingkou, 5.1 million TEU, and Suzhou at 5.15 million TEU.
The Pearl River Delta port of Guangzhou was the top performing port in growth terms in July, with year-over-year throughput up by 14.3 percent compared with July of 2016. A new international logistics center is to be built at Nansha as part of its efforts to attract more cargo and shipping lines to the port.
Throughput at Shanghai, the world’s busiest container port, also grew strongly in July, rising 5.2 percent year over year.
Figures from the Ministry of Transport indicate that foreign trade volume through the country's top 30 ports reached 343 million tonnes in July, 7.3 percent more than the same month in 2016.
China’s total imports and exports were valued at CNY 2.32 trillion (USD 0.34 trillion) in July, up 8.8 percent on the previous year. Exports rose by 7.2 percent to CNY 1.32 trillion (USD 0.19 trillion) and imports rose by 11 percent to CNY 1 trillion, data from the Ministry of Commerce show.
IHS Markit's most recent Caixin China manufacturing PMI, which monitors activity at small- and medium-sized manufacturers, hit a four-month high of 51.1 in July. The official Purchasing Managers Index, which keeps tabs on large companies and state-owned enterprise, shrank by 0.3 to 51.4. Readings above 50 indicate economic expansion, and below 50 signal contraction.
https://www.joc.com/port-news/asian-ports/chinese-container-port-growth-surges-strong-us-demand_20170822.html
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Cooler temperatures dampen China coal rally, but for how long?
Aug 22, 2017 | Reuters (in Energy World)
Prices shot to record highs last week, reaching 603 yuan a tonne ($90.62) amid concern about tightening output as the government launched sweeping safety checks across major producing province Shanxi after a fatal accident at a mine.
BEIJING: Cooler weather and ample supplies pushed China's thermal coal prices lower on Tuesday, spurring speculation that tapering demand may threaten the months-long rally even as concerns linger about slower output as Beijing cracks down on safety.
Prices shot to record highs last week, reaching 603 yuan a tonne ($90.62) amid concern about tightening output as the government launched sweeping safety checks across major producing province Shanxi after a fatal accident at a mine.
Investors have pushed prices up 50 percent this year, piling into the market with bullish bets as hotter than usual weather scorched the north, increasing electricity demand for air conditioning and hence demand for China's favourite fuel.
Now, as the heat wave passes and long-range forecasts point to a warmer than average winter in the world's top consumer of the fuel, analysts and sources at utilities and miners are speculating over whether pressure on prices will increase.
China's most actively trade thermal coal futures for delivery in January inched down 0.9 percent on Tuesday to close at 595.6 yuan a tonne.
"We see increasing risks of a correction in the thermal coal market, due to lower consumption from power companies and cooling temperature," said Zhang Min, analyst at China Sublime Information Group.
The forward structure of the thermal futures curve shows investors are betting on prices peaking in October before falling steadily until August 2018. October's premium over August was 73 yuan a tonne ($10.97).
Reflecting reduced appetite from power producers, inventories at China's largest coal trading port Qinhuangdao have been stable at about 600 million tonnes in August, up from critically low levels of 400 million tonnes in March.
That's double the level this time last year and above the average of recent years.
"Weak appetite from utilities and growth in hydropower production has dampened purchases of thermal coal," China Coal Industry Association said in a report on Monday. "Declining freight rates for seaborne coal also indicate weakening demand."
The uncertain outlook may unsettle large rival producers such as Australia and Russia, which have sold more coal to China over the past year and benefited from higher prices.
Still prices may not fall too far before finding support from falling output as China's government clamps down on safety. Coal output in July fell to its lowest since October.
A trader with one of China's top miners believes that prices will hover in their current range between 560 and 590 yuan.
"In the near term, coal prices are supported by limited production," Zhang said. $1 = 6.6543 Chinese yuan renminbi)
http://energy.economictimes.indiatimes.com/news/coal/cooler-temperatures-dampen-china-coal-rally-but-for-how-long/60177944
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China defends ally Pakistan after Trump criticism
Aug 23, 2017 | Reuters
By Michael Martina
BEIJING (Reuters) - China defended its ally Pakistan on Tuesday after U.S. President Donald Trump said the United States could no longer be silent about Pakistan's "safe havens" for militants and warned it had much to lose by continuing to "harbor terrorists".
Trump on Monday committed the United States to an open-ended conflict in Afghanistan, signaling he would dispatch more troops to America's longest war and vowing "a fight to win".
Trump insisted that others - the Afghan government, Pakistan, India and NATO allies - step up their own commitment to resolving the 16-year conflict, but he saved his sharpest words for Pakistan.
Senior U.S. officials warned security assistance for Pakistan could be reduced unless the nuclear-armed nation cooperated more in preventing militants from using safe havens on its soil.
Critics say Pakistan sees militants such as the Taliban as useful tools to limit the influence of old rival India. Pakistan denies allowing militants refuge on its territory, saying it takes action against all groups.
Asked about Trump's speech, Chinese Foreign Ministry spokeswoman Hua Chunying said Pakistan was on the front line in the struggle against terrorism and had made "great sacrifices" and "important contributions" in the fight.
"We believe that the international community should fully recognize Pakistan's anti-terrorism," she told a daily news briefing.
"We are happy to see Pakistan and the United States carry out anti-terror cooperation on the basis of mutual respect, and work together for security and stability in the region and world."
China and Pakistan consider each other "all-weather friends" and have close diplomatic, economic and security ties.
China has its own security concerns in the region, in particular any links between militants in Pakistan and Afghanistan and Islamist groups China blames for violence in its far western region of Xinjiang.
"We hope the relevant U.S. policies can help promote the security, stability and development of Afghanistan and the region," Hua said.
https://www.reuters.com/article/us-northkorea-missiles-idUSKCN1B306P
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After U.S. destroyer collision, Chinese paper says U.S. navy a hazard
Aug 23, 2017 | Reuters
By Ben Blanchard
BEIJING (Reuters) - The U.S. navy's latest collision at sea, the fourth in its Pacific fleet this year, shows it is becoming an increasing risk to shipping in Asia despite its claims of helping to protect freedom of navigation, an official Chinese newspaper said.
The USS John S. McCain and the tanker Alnic MC collided while the guided-missile vessel was nearing Singapore on Monday. The collision tore a hole in the warship's port side at the waterline, flooding compartments that included a crew sleeping area. Ten sailors are missing.
The collision - the fourth major accident in the U.S. Pacific fleet this year - prompted a fleet-wide investigation and plans for temporary halts in operations to focus on safety.
The state-run China Daily said in an editorial on Tuesday that people will wonder why such a sophisticated navy keeps having these problems.
"The investigations into the latest collision will take time to reach their conclusions, but there is no denying the fact that the increased activities by U.S. warships in Asia-Pacific since Washington initiated its rebalancing to the region are making them a growing risk to commercial shipping," it said.
China has been upset at U.S. freedom of navigation operations near Chinese controlled islands in the disputed South China Sea, where China has been reclaiming land, building air bases and increasing its military presence.
"While the U.S. Navy is becoming a dangerous obstacle in Asian waters, China has been making joint efforts with the members of the Association of Southeast Asian Nations to draw up a Code of Conduct for the South China Sea and it has boosted navigational safety by constructing five lighthouses on its islands," the China Daily said.
"Anyone should be able to tell who is to blame for militarizing the waters and posing a threat to navigation."
https://www.reuters.com/article/us-northkorea-syria-un-idUSKCN1B12G2
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New Balance Wins $1.5 Million in Landmark China Trademark Case
Aug 22, 2017 | The New York Times
By Sui-Lee Wee
BEIJING — A Chinese court has ruled that three domestic shoemakers must pay New Balance $1.5 million in damages and legal costs for infringing the American sportswear company’s signature slanting “N” logo, in what lawyers said was the largest trademark infringement award ever granted to a foreign business in China.
It is a victory not just for New Balance, but also for many other foreign companies that have long complained that Beijing has not done enough to protect their brands. And while the size of the ruling — issued three days after President Trump ordered an investigation into China’s alleged theft of intellectual property — was relatively small by international standards, it was nevertheless a substantial increase compared with previous penalties.
“I haven’t heard of a foreign company getting this level of damages,” said Douglas Clark, an intellectual property lawyer who has practiced in China and Hong Kong for the last 25 years.
In the decision, the Suzhou Intermediate People’s Court, near Shanghai, ruled that three defendants that made shoes under the brand New Boom “seized market share from New Balance” and “drastically damaged the business reputation of New Balance,” according to a copy of the decision, which was sent to The New York Times by the American company.
The court said the three defendants behind New Boom — Zheng Chaozhong, Xin Ping Heng Sporting Goods Limited Company and Bo Si Da Ke Trading Limited — had relied on the “malice of free-riding,” saying their actions led to “confusion by a large number of consumers,” according to the ruling, which was made last Tuesday but has not yet been made public. The decision can still be appealed.Continue reading the main storyRELATED COVERAGEIn China, ‘Disney’ Deals Turn Out to Be Fantasy MARCH 29, 2017A Small Table Maker Takes On Alibaba’s Flood of Fakes MARCH 18, 2017Alibaba Faces Growing Pressure Over Counterfeit Goods DEC. 22, 2016
The court ruling reflects the Chinese government’s determination to confront the problem of piracy, which has long plagued many companies in a country where fake shoes, bags — and even meat — are widely available.
But many counterfeiters have moved beyond just making knockoffs to copying everything about a brand, short of the entire name. In New Balance’s case, the American company faces challenges from New Boom, New Barlun, and New Bunren, all of which are protected under China’s trademark law. (In China, trademarks are awarded to the first company to file for them, and unlike in the United States, businesses typically don’t have to give a reason for filing for them.)
New Balance, though, has sought to take all of them on. Since it started selling shoes in China in 1995, it has fought against dozens of counterfeit manufacturers, battled a rogue supplier who exported its shoes at a deep discount and struggled over the use of its Chinese name in the courts.
It has not been wholly successful — in April 2015, a Chinese court fined New Balance around $16 million after it lost a lawsuit to a man who had registered the trademark for the Chinese name of New Balance. The American company appealed and the fine was later reduced to about $700,000. New Balance is appealing the decision, which would go to China’s Supreme Court, according to Daniel McKinnon, New Balance’s senior counsel for intellectual property.
Still, the company is making progress.
In April, a court in the eastern city of Hangzhou awarded New Balance $500,000 in damages after ruling that a company that made New Bunren shoes infringed the American company’s trademark. That same month, the Suzhou court fined five companies for breaching an injunction prohibiting them from selling shoes with the “N” logo. New Balance is also suing New Barlun, Mr. McKinnon added.
Last week’s ruling has given the company “a renewed confidence in our aggressive intellectual-property protection strategy within China,” he said.
“By analogy, if the China marketplace can be thought of as a schoolyard, New Balance wants to make it abundantly clear we are the wrong kid to pick on,” Mr. McKinnon said in an emailed response to questions.
The $1.5 million ruling is a product of new legislation in China. Before the country passed a new trademark law in 2014, damages awarded in the vast majority of infringement cases were paltry, coming in below the maximum statutory amount of about $75,000. The new law increased that to about $450,000, making the New Balance award particularly significant.
As Chinese companies have begun producing more advanced products and gaining valuable intellectual property of their own, Beijing has sought to bolster its trademark law, increasing the damages awarded to companies in infringement cases and fining counterfeiters.
Chinese law does not follow precedent, but courts around the country do look to decisions nationwide for cues. As a result, Scott Palmer, an intellectual property lawyer at Sheppard, Mullin, Richter & Hampton, which represents American corporations in China, said the New Balance ruling bodes well for a number of cases that he has before the courts.
“I don’t think this is a one-off,” Mr. Palmer said. “This is a fairly high-profile case, but I think that it falls squarely within a trend, in which the direction is more toward more significant damage awards when indeed it is warranted.”
https://www.nytimes.com/2017/08/22/business/china-new-balance-trademark.html?_r=0
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Warming Arctic spurs battles for riches, shipping routes
Aug 22, 2017 | AP (In ABC News)
By Frank Jordans
From a distance, the northern shores of Baffin Island in the Arctic appear barren — a craggy world of snow-capped peaks and glaciers surrounded by a sea of floating ice even in the midst of summer.
Yet beneath the forbidding surface of the world's fifth largest island lies a vast treasure in the shape of an exceptionally pure strain of iron ore. The Baffinland mine, part-owned by a local company and ArcelorMittal, one of the world's biggest steel producers, is believed to hold enough ore to feed smelters for decades.
As climate change pushes the cold and ice a little farther north each year, it is spurring talk of a gold rush for the Arctic's abundant natural resources, prized shipping routes and business opportunities in tourism and fishing. The Arctic, including the fabled Northwest Passagebetween the Atlantic and the Pacific, is among the last regions on earth to remain largely unexplored. In April, U.S. President Donald Trump signed an executive order to reverse Obama-era restrictions on oil drilling.
Yet industry experts, researchers and veterans of the Far North say there remain many obstacles to reaping the riches once blocked by the ice. Conservationists also oppose the large-scale extraction of Arctic resources, fearing that the fragile environment will be irreparably harmed.
The Associated Press took a first-hand look at the Arctic on a month-long, 10,000-kilometer (6,200-mile) journey aboard the Finnish icebreaker MSV Nordica, along with researchers specializing in Arctic development. The journey was in part an effort to promote the ship to potential clients in North America as an "icebreaker for hire."
"As the world demand for raw materials is ever increasing, and (with) a realization that a large part of the unexplored deposits are in the Arctic, there is a natural shift to focus on that area," said Mads Boye Peterson, head of Denmark's Nordic Bulk Carriers Shipping.
Peterson's company sent a freighter through the Northwest Passage four years ago to demonstrate the feasibility of using the route to haul cargo during the summer months, when melting sea ice opens up these frigid waters. But he also noted that rising temperatures make operations more difficult because moving floes are less predictable than unbroken sheets of ice.
"On the surface it might look like a slam dunk," he said. "But it's actually a lot more complicated than just something you decide to do overnight."
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Learn more about the Arctic and read dispatches sent by a team of AP journalists as they traveled through the region's fabled Northwest Passage last month: https://www.apnews.com/tag/NewArctic
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The Arctic stretches from the North Pole to roughly the 66th parallel north, an area of about 20 million square kilometers (almost 8 million square miles) of freezing seas and tree-less lands.
The U.S. Geological Survey has estimated that up to 30 percent of the world's undiscovered gas and 13 percent of oil waiting to be found are inside the Arctic Circle. Even if only a fraction of these fossil fuels are tapped they could be worth hundreds of billions of dollars.
Coal, diamonds, uranium, phosphate, nickel, platinum and other precious minerals also slumber beneath the icy surface of the Arctic, according to Morten Smelror, director of the Geological Survey of Norway. And the growing need for sophisticated batteries to power electric cars and handheld devices likely will drive demand for rare earth elements, lithium and cobalt found in significant amounts in the Arctic regions of Russia, the Nordic countries and Greenland, he said.
"The Arctic is certainly among the last frontiers with respect to undiscovered mineral resources, along with the deep oceans," said Smelror.
Apart from natural resources, the geography of the Arctic also opens up new opportunities. Sailing through the Northwest Passage could potentially cut the distance from East Asia to Western Europe by more than 10,000 kilometers (6,200 miles), compared with the traditional route through the Panama Canal, offering huge fuel savings for shipping companies.
It's a far cry from the Cold War, when the only ships crisscrossing the frigid straits were nuclear submarines patrolling the frontier between East and West. The new battle for the Arctic and its resources is being fought by geologists and legions of lawyers.
Greenland, an autonomous region of Denmark, has staked its claim to the Lomonosov Ridge — a massive underwater feature jutting hundreds of miles beneath the Arctic Sea that would greatly extend Greenland's sea bed continental shelf for possible use in future undersea mining. Russia contests the claim — one of several disputes before the U.N. Commission on the Limits of the Continental Shelf.
Moscow boldly underlined its claim to a vast part of the Arctic Ocean floor 10 years ago by planting an underwater flag at the North Pole. Russia has also been expanding infrastructure along its northern coast, partly to exploit reserves of natural gas in the region.
Canada, meanwhile, contends that the waters of the Arctic archipelago — an area about twice the size of Texas — are its internal waters. To support its claim, Canada has been stepping up its activities in the region, including creating a new Arctic research center and developing autonomous submarines to improve underwater charts. It has also been conducting search and rescue exercises in anticipation of growing ship traffic in the Northwest Passage.
Preparations for Nordica's journey included registering with Canadian authorities, who closely monitor traffic in the Northwest Passage to ensure compliance with environmental rules. Fewer than 500 ships have sailed through the passage since the first transit in 1906.
Canada's claim to the waters of the Arctic archipelago is contested by the United States, mainly due to concerns that it could set a precedent other, less friendly nations might follow.
In general, the United States is taking a back seat for now. Washington has yet to ratify the U.N. Convention on the Law of the Sea that would regulate territorial disputes, due to concerns among some senators that submitting to international treaties would impinge on U.S. sovereignty.
Despite competing claims and tough talk to home audiences, Arctic nations are cooperating well with each other, said Rachael Lorna Johnstone, a professor of law at the University of Akureyri in Iceland.
"Everyone is following the rulebook," she said.
Some smaller firms are pressing ahead with business in the Arctic. The Alaska-based company Quintillion is laying a fiber optic cable through the Northwest Passage to provide high-speed Internet traffic to local communities. It would also establish an additional link between London and Tokyo — where two of the world's main stock markets are located.
The growth in adventure tourism and the lengthening summer season have produced a surge of traffic over the past decade. Last year, the cruise ship Crystal Serenity with 500 crew and 1,100 passengers paying at least $22,000 each for a four-week journey sailed through the passage.
Such tours require years of planning and the approval of almost 30 Canadian agencies, including the authorities in the indigenous territory of Nunavut. Part of the revenue goes to local communities whose hunting grounds and travel routes might be disrupted by large vessels.
"It basically opens up so much ice that we can't even use the ice anymore, and we have to go by land where it was just right across before," said Maatiusi Manning.
The 33-year-old Inuk from Baffin Island's Cape Dorset was on board the Nordica, gaining 'ship time' as part of his training to work on a factory fishing ship.
Developing the local fishing industry is one way to solve the region's chronic lack of jobs, now further threatened by the effects of climate change. "Money-wise it's great," Manning said of the fishery job he hopes to land when his training is completed. "It's going to help a lot of families."
The environmental group Greenpeace said it was important to ensure the Inuit control their own fisheries, rather than let outside corporations with no link to the Arctic harvest its rich waters.
"The fisheries are abundant in the Arctic," said Charles Latimer of Greenpeace. "But we don't want to make the same mistakes that we've done in other parts of the world where fisheries are collapsing."
Climate change is even opening new avenues in agriculture. Mette Bendixen, a climate researcher at the University of Copenhagen, projects that global warming will continue into the 21st century, extending the growing season by two months.
"Not many people know that potatoes, strawberries are grown in southern Greenland," he said.
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Despite its promise, there are several challenges holding back the development of parts of the Arctic and the use of its resources.
The search for fossil fuels above North America has slowed in recent years. One reason is low oil prices, which along with public pressure have made the Arctic shortcut less attractive to shipping firms. The drop in prices has hit Alaska's budget hard, because it relies heavily on oil and gas revenue.
While Russia and Norway are pressing ahead with new oil and gas projects along their coastlines, the seas off Alaska and northern Canada are much less accessible and any major spill would be difficult and costly to contain.
Shell relinquished most of its federal offshore leases in Alaska's Chukchi Sea last year, after pouring billions of dollars into exploration efforts over the past decade. Former Shell leases in the neighboring Beaufort Sea have been taken over by an Alaska Native-owned company.
"There are a lot of hydrocarbons in the Arctic, but for them to be economically viable the cost per barrel has to be higher," said David Barber, an expert on the Arctic environment at the University of Manitoba. "Of course it will go higher, and thus the Arctic issue will come to the foreground again."
The rugged nature of the Arctic also slows development. Only 10 percent of the Northwest Passage is surveyed to the highest modern standards, meaning uncharted shallows could pose a serious risk to shipping. Ocean currents are predicted to push polar pack ice into the passage for decades, limiting the route to sturdy vessels with experienced navigators — and keeping insurance costs high.
"Think about a high mountain pass that is closed for half the year, has no gas stations, convenience stores or repair facilities," said Andrew Kinsey, a senior marine risk consultant at insurance giant Allianz. "Is this the route that you want to use for your daily commute?"
Environmental concerns and a growing acceptance of the rights of the region's indigenous population also have held back some plans for Arctic exploration.
As the Nordica made its way through the Franklin Strait, giant ripples indicated a pod of whales moving ahead of the ship — a mass of speckled narwhals occasionally breaking the water along the edge of the ice. It wasn't clear whether the narwhals had spotted the ship, but they would have heard its growl as it crashed through piles of sea ice, a sound unlike any other in this remote corner of the Northwest Passage.
Cargo hauls to the Baffinland iron ore mine are already restricted to August to mid-October, so as not to disrupt the Inuit's ability to cross the ice to hunt, fish or trade. Such rules recognize the growing assertiveness of the region's original inhabitants for a share of its riches, including the protection of local hunting grounds for seals and walruses.
Manning, the trainee fisherman, hopes the opportunities his children gain from Arctic development will outweigh the disadvantages.
"The ice in our bay, when it went, they noticed it really quickly," he said. "My son was excited about it, but my daughter said, 'Oh, there goes our trail to go to the fish lakes.'"
Daria Gritsenko, a public policy researcher traveling on board the icebreaker Nordica, cautioned that any economic excitement about global warming opening up the Arctic needs to be tempered by an understanding of the risks. Melting permafrost already poses a problem for Russia's Arctic infrastructure, from ports to pipelines, from roads to residential buildings.
"We need to rethink how we build things in the Arctic," said Gritsenko, who is based at the University of Helsinki. "Even if we develop a tremendous system of Arctic ports, how would the goods get there? That's the irony of climate change."
Gritsenko said there's likely no single answer to the multitude of problems ahead, including the overarching question of how a global economy that fostered climate change can be adapted to tackle it.
"We need new ideas," she said. "We need more alternatives."
http://abcnews.go.com/International/wireStory/warming-arctic-spurs-battles-riches-shipping-routes-49370511
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Threat of price war clouds horizon for Maersk shipping business
Aug 22, 2017 | Reuters
By Jacob Gronholt-Pedersen
COPENHAGEN (Reuters) - A.P. Moller-Maersk has been fortified by the $7.5 billion sale of its oil and gas business to France's Total, but the company's main sea freight business faces the threat of a new price war in a consolidating industry.
Maersk, the world's biggest container shipping company, has shifted its focus this year from preserving market share to higher margins, a strategy that was helped by a recovery in freight rates.
Chief Executive Soren Skou told Reuters that the company's second quarter results last week "were driven by higher freight rates alone" and that underlying industry fundamentals were their best since 2010.
But competitors including Ocean Alliance -- a newly-created partnership between France's CMA CGM, China's Cosco, Hong Kong's OOCL and Taiwan's Evergreen -- will this year launch a string of ultra-large vessels and will have little choice but to chase a bigger slice of the market.
"This could force Maersk to become defensive and defend its market share," said Lars Jensen, director at Copenhagen-based consultancy SeaIntelligence.
"If you don't want to enter a price war, you have to accept losing market share."
The industry last year emerged from a fierce price war over market share that saw freight rates drop, hurting container line profitability as too many ships chased too little business.
But there are already signs of price skirmishes on the trans-Pacific route, which could spread to other regions.
Maersk's focus on margins comes after splashing out $4 billion in December to buy smaller German rival Hamburg Sud, strengthening its presence in global trade and Latin America and increasing global market share to 18.6 percent from 15.7 percent.
Although the sale of the oil and gas business has allowed Maersk to shed any conglomerate discount in the way investors value its shares, it also means it can no longer use oil as a hedge against a downturn in the container market.
This strategy had already prompted rating agencies to downgrade the company, although analysts still say it will retain its investment grade - a key metric for the management.
"Overall, (the oil sale) is a credit negative event but we doubt it will have much impact on the short end of the curve due to Maersk's significant liquidity," Danske Bank credit analyst Brian Borsting said.
Maersk management is very keen on staying financially robust, indicating it wants to be ready for another price war and for new takeovers.
The company has given itself another year to spin off the remaining energy assets, which includes 24 offshore drilling rigs, 158 oil tankers and a supply service operation.
Nordea estimates a valuation for the drilling fleet around $3.9 billion, while Jefferies expect Maersk to fetch around $7.5 billion from those assets.
https://www.reuters.com/article/us-petrochina-oil-trading-idUSKCN1B22MW
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