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Former friend Malaysia halts all imports from North Korea, data shows

CommoditiesOct 13, 2017 03:18AM ET
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© Reuters. FILE PHOTO: North Korean heir-apparent Kim Jong Nam takes a look around as he boards a plane upon his deportation from Japan at Tokyo's Narita international airport

By A. Ananthalakshmi

KUALA LUMPUR (Reuters) - Malaysia, which until recently had been one of Pyongyang's closest friends, has halted all imports from North Korea, as part of global efforts to cut off funding over its nuclear and missile programs.

Malaysia did not buy any goods from North Korea in June and July, after buying 20.6 million ringgit ($4.89 million) worth of goods in the first five months of the year, according to data from the Department of Statistics.

Malaysia's ties with North Korea have deteriorated since the February assassination of Kim Jong Un's estranged half brother at Kuala Lumpur international airport, which the United States and South Korea say was ordered by the North Korean leader.

Kuala Lumpur last month banned its citizens from traveling to North Korea, two weeks after Prime Minister Najib Razak met with U.S. President Donald Trump at the White House. The visit gave Najib a political boost at home, with his popularity suffering over a massive scandal at a state investment fund, which the U.S. Department of Justice is investigating.

Trump told reporters after meeting with Najib at the White House last month that Malaysian Prime Minister Najib Razak "does not do business with North Korea any longer, and we find that to be very important."

Malaysia had been a key source of revenue for the North. Citizens from both countries enjoyed visa-free travel. Malaysia was host to hundreds of overseas workers. More importantly were operations that funneled money to the regime. Reuters reported earlier this year North Korea's spy agency, the Reconnaissance Bureau, was running an arms operation out of Kuala Lumpur.

DRASTIC SANCTIONS

Malaysia's halt to North Korean imports came ahead of drastic U.N. and U.S. sanctions last month that ramp up export bans and penalize companies and individuals doing business with North Korea.

The United Nations on Sept. 11 banned North Korea's lucrative textile exports as well as all joint ventures with North Koran individuals or entities.

Trump issued an executive order 10 days later penalizing any company or person doing business with North Korea by cutting off their access to the U.S. financial system, freezing their assets or both.

Other Southeast Asian nations have similarly reduced imports from North Korea. The Philippines said last month it has suspended trade with North Korea to comply with sanctions.

Thailand's imports from North Korea dropped to $400,000 between January and August, compared with $1.8 million in the same period last year, according to data from the commerce ministry.

Indonesia, on the other hand, increased its imports from North Korea to $1.8 million in January-July before the latest round of sanctions, versus $910,000 in the same period last year.

Secretary of state Rex Tillerson, on a swing through Southeast Asia in August, urged countries to do more to cut funding streams for North Korea.

For instance, North Korean front companies were using Bangkok as a regional hub, changing their names frequently, Assistant Secretary for East Asian and Pacific Affairs Susan Thornton told reporters during Tillerson's visit to Bangkok in early August. [nL4N1KU2LA

CRABS AND COAT HANGERS

Malaysia's past imports from North Korea ranged from big ticket items such as coal, medical devices and light emitting diodes to even crabs, noodles, cloth hangers and fire extinguishers.

A U.S. government official told Reuters Malaysia has assured the United States it does not import from Pyongyang anymore.

Malaysia's trade ministry did not respond to requests for comment.

Malaysia had been one of the few countries increasing its imports from North Korea in recent years - from a mere 1,183 ringgit ($311) in 2012 to 8.2 million ringgit in 2016.

An unusual purchase this year was coal, which Malaysia bought right after China, the top buyer of the North's minerals banned imports of the commodity in February. A U.N. report in September said North Korea had diversified its coal exports to other countries after the China ban.

Malaysia bought $3.4 million worth of coal in March and $16.6 million worth of coal tar products, data showed. The March purchase was the first time Malaysia had bought coal from North Korea since at least 2012.

While imports have stopped, Malaysia has continued exports to North Korea. Exports included palm oil, food and medical supplies worth 4.4 million ringgit between January and July.

Former friend Malaysia halts all imports from North Korea, data shows
 

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