After Trump criticism, China denies selling oil illicitly to North Korea

BEIJING/WASHINGTON, Dec 29 (Reuters) - China on Friday denied reports it has been illicitly selling oil products to North Korea after U.S. President Donald Trump said he was not happy that China had allowed oil to reach the isolated nation.

Trump said on Twitter the previous day that China had been "caught" allowing oil into North Korea and that would prevent "a friendly solution" to the crisis over North Korea's nuclear and missile programs that it conducts in defiance of heavy U.N. Security Council sanctions.

"I have been soft on China because the only thing more important to me than trade is war," Trump said in a separate interview with The New York Times.

South Korea's Chosun Ilbo newspaper this week quoted South Korean government sources as saying that U.S. spy satellites had detected Chinese ships transferring oil to North Korean vessels about 30 times since October.

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U.S. officials have not confirmed details of this report.

Chinese Foreign Ministry spokeswoman Hua Chunying told reporters she had noted recent media reports including suggestions a Chinese vessel was suspected of transporting oil to a North Korean vessel on Oct. 19.

"The Chinese side has conducted immediate investigation. In reality, the ship in question has, since August, not docked at a Chinese port and there is no record of it entering or leaving a Chinese port," Hua said.

She said she was not aware if the vessel had docked at the port in other countries but the relevant media reports "did not accord with facts."

"China has always implemented U.N. Security Council resolutions pertaining to North Korea in their entirety and fulfills its international obligations. We never allow Chinese companies and citizens to violate the resolutions," Hua said.

"If, through investigation, it's confirmed there are violations of the U.N. Security Council resolutions, China will deal with them seriously in accordance with laws and regulations."

In the New York Times interview, Trump explicitly tied his administration's trade policy with China, North Korea's lone major ally, to its perceived cooperation in resolving the North Korea standoff.

"When I campaigned, I was very tough on China in terms of trade. They made — last year, we had a trade deficit with China of $350 billion, minimum. That doesn't include the theft of intellectual property, O.K., which is another $300 billion," Trump said, according to a transcript of the interview.

"If they're helping me with North Korea, I can look at trade a little bit differently, at least for a period of time. And that's what I've been doing. But when oil is going in, I'm not happy about that."

An official with the U.S. State Department said the U.S. government was aware of vessels engaged in such activity involving refined petroleum and coal.

"We have evidence that some of the vessels engaged in these activities are owned by companies in several countries, including China," the official said, speaking on condition of anonymity.

The United States says the full cooperation of China, North Korea's neighbor and main trading partner, is vital to the success of efforts to rein in North Korea, while warning that all options are on the table, including military ones, in dealing with it.

China has repeatedly said it is fully enforcing all resolutions against North Korea, despite suspicion in Washington, Seoul and Tokyo that loopholes still exist.

'EVADING SANCTIONS'

South Korea said on Friday it had seized a Hong Kong-flagged ship suspected of transferring oil to North Korea.

A senior South Korean foreign ministry official said the ship, the Lighthouse Winmore, was seized when it arrived at a South Korean port in late November.

"It's unclear how much oil the ship had transferred to North Korea for how long and on how many occasions, but it clearly showed North Korea is engaged in evading the sanctions," the official told Reuters.

South Korea's customs service concluded that the Lighthouse Winmore had loaded about 14,000 tons of Japanese refined petroleum products in South Korea on Oct. 11, reportedly bound for Taiwan, the official said.

But instead, it transferred as much as 600 tons to the North Korea-flagged Sam Jong 2 on Oct. 19 in international waters between China and the Korean peninsula, on the order of its charterer, Billions Bunker Group Corp., based in Taiwan, the ministry official said.

It was not immediately possible to find contact information for the company.

A spokesman for Taiwan's presidential office, Alex Huang, said the company was not incorporated in Taiwan.

"As a responsible member of international society, Taiwan will continue to fully comply with all U.N. sanctions against North Korea, in order to support peace and stability in the region," he said in a statement.

The Hong Kong government said it was "liaising with the Korean parties concerned to obtain further information about the incident, and will take appropriate actions as necessary."

Employees at the office of Lighthouse Ship Management, the ship's registered manager, in the Chinese port city of Guangzhou, declined to comment and said they had no knowledge of the situation.

China's foreign ministry spokeswoman said she did not have any information about the matter.

Both ships were among 10 vessels that the United States had proposed that the U.N. Security Council should blacklist for transporting banned items from North Korea, documents seen by Reuters this month showed.

RELATED: Every missile launch conducted by North Korea in 2017

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Every missile launch conducted by North Korea in 2017
This photo taken on February 12, 2017 and released on February 13 by North Korea's official Korean Central News Agency (KCNA) shows the launch of a surface-to-surface medium long-range ballistic missile Pukguksong-2 at an undisclosed location. North Korea said on February 13 it had successfully tested a new ballistic missile, triggering a US-led call for an urgent UN Security Council meeting after a launch seen as a challenge to President Donald Trump. / AFP PHOTO / KCNA via KNS / STR / South Korea OUT / REPUBLIC OF KOREA OUT ---EDITORS NOTE--- RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT 'AFP PHOTO/KCNA VIA KNS' - NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS / THIS PICTURE WAS MADE AVAILABLE BY A THIRD PARTY. AFP CAN NOT INDEPENDENTLY VERIFY THE AUTHENTICITY, LOCATION, DATE AND CONTENT OF THIS IMAGE. THIS PHOTO IS DISTRIBUTED EXACTLY AS RECEIVED BY AFP. / (Photo credit should read STR/AFP/Getty Images)
TOPSHOT - This undated picture released by North Korea's Korean Central News Agency (KCNA) via KNS on March 7, 2017 shows the launch of four ballistic missiles by the Korean People's Army (KPA) during a military drill at an undisclosed location in North Korea. Nuclear-armed North Korea launched four ballistic missiles on March 6 in another challenge to President Donald Trump, with three landing provocatively close to America's ally Japan. / AFP PHOTO / KCNA VIA KNS / STR / South Korea OUT / REPUBLIC OF KOREA OUT ---EDITORS NOTE--- RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT 'AFP PHOTO/KCNA VIA KNS' - NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS THIS PICTURE WAS MADE AVAILABLE BY A THIRD PARTY. AFP CAN NOT INDEPENDENTLY VERIFY THE AUTHENTICITY, LOCATION, DATE AND CONTENT OF THIS IMAGE. THIS PHOTO IS DISTRIBUTED EXACTLY AS RECEIVED BY AFP. / (Photo credit should read STR/AFP/Getty Images)
TOPSHOT - A man walks past a television screen showing file footage of a North Korean missile launch, at a railway station in Seoul on March 22, 2017. A new North Korean missile test failed on March 22, the South and US said, two weeks after Pyongyang launched four rockets in what it called a drill for an attack on American bases in Japan. / AFP PHOTO / JUNG Yeon-Je (Photo credit should read JUNG YEON-JE/AFP/Getty Images)
A man walks past a television screen showing file footage of a North Korean missile launch, at a railway station in Seoul on April 5, 2017. Nuclear-armed North Korea fired a ballistic missile into the Sea of Japan on April 5, just ahead of a highly-anticipated China-US summit at which Pyongyangs accelerating atomic weapons programme is set to top the agenda. / AFP PHOTO / JUNG Yeon-Je (Photo credit should read JUNG YEON-JE/AFP/Getty Images)
A North Korean navy truck carries the 'Pukkuksong' submarine-launched ballistic missile (SLBM) during a military parade marking the 105th birth anniversary of country's founding father, Kim Il Sung in Pyongyang, April 15, 2017. North Korea has escalated tests of its SLBM programme in the last year. Whilst the isolated country is not yet believed to have an operational submarine capable of carrying more than one missile at the time, its enemies are worried that a fully-functional SLBM would make tracking and intercepting a North Korean missile launch and the submarine from which it was fired very difficult. REUTERS/Damir Sagolj TPX IMAGES OF THE DAY SEARCH "PARADE WID" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
This picture taken on May 14, 2017 and released from North Korea's official Korean Central News Agency (KCNA) on May 15 shows a test launch of the ground-to-ground medium long-range strategic ballistic rocket Hwasong-12 at an undisclosed location. / AFP PHOTO / KCNA VIA KNS / STR / South Korea OUT / REPUBLIC OF KOREA OUT ---EDITORS NOTE--- RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT 'AFP PHOTO/KCNA VIA KNS' - NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS THIS PICTURE WAS MADE AVAILABLE BY A THIRD PARTY. AFP CAN NOT INDEPENDENTLY VERIFY THE AUTHENTICITY, LOCATION, DATE AND CONTENT OF THIS IMAGE. THIS PHOTO IS DISTRIBUTED EXACTLY AS RECEIVED BY AFP. / (Photo credit should read STR/AFP/Getty Images)
FILE PHOTO - The scene of the intermediate-range ballistic missile Pukguksong-2's launch test in this undated photo released by North Korea's Korean Central News Agency (KCNA) May 22, 2017. KCNA/via REUTERS/File photo ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. EDITORIAL USE ONLY. REUTERS IS UNABLE TO INDEPENDENTLY VERIFY THIS IMAGE. NO THIRD PARTY SALES. SOUTH KOREA OUT.
People watch a television broadcasting a news report on North Korea firing what appeared to be a short-range ballistic missile, at a railway station in Seoul, South Korea, May 29, 2017. REUTERS/Kim Hong-Ji TPX IMAGES OF THE DAY
SEOUL, SOUTH KOREA - JUNE 08: People watch a television broadcast reporting the North Korean missile launch at the Seoul Railway Station on June 8, 2017 in Seoul, South Korea. According to the South Korean military, North Korea launched several cruise missiles from the east coast toward the ocean on June 8, 2017 in its fourth missile test in four weeks. The launch came amid the international tension surrounding the policy on North Korea, as a day before the newly elected South Korean president, Moon Jae-in, announced the suspension of the deployment of an controversial American missile defence system, and less than a week before the United Nations Security Council expanded the sanctions against North Korea. (Photo by Chung Sung-Jun/Getty Images)
This picture taken and released on July 4, 2017 by North Korea's official Korean Central News Agency (KCNA) shows the test-fire of the intercontinental ballistic missile Hwasong-14 at an undisclosed location. North Korea declared on July 4 it had successfully tested its first intercontinental ballistic missile -- a watershed moment in its push to develop a nuclear weapon capable of hitting the mainland United States. / AFP PHOTO / KCNA VIA KNS / STR / South Korea OUT / REPUBLIC OF KOREA OUT ---EDITORS NOTE--- RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT 'AFP PHOTO/KCNA VIA KNS' - NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS THIS PICTURE WAS MADE AVAILABLE BY A THIRD PARTY. AFP CAN NOT INDEPENDENTLY VERIFY THE AUTHENTICITY, LOCATION, DATE AND CONTENT OF THIS IMAGE. THIS PHOTO IS DISTRIBUTED EXACTLY AS RECEIVED BY AFP. / (Photo credit should read STR/AFP/Getty Images)
A photo taken on July 6, 2017 shows a mass dance event as part of celebrations marking the July 4 launch of the Hwasong-14 intercontinental ballistic missile, in Pyongyang. Fireworks lit up the sky over Pyongyang's Juche Tower as North Korea celebrated its launch of intercontinental ballistic missile, a milestone in its decades-long weapons drive. On July 4 -- the United States' Independence Day -- it launched a Hwasong-14 rocket that analysts and overseas officials said had a range of up to 8,000 kilometres, which would put Alaska and Hawaii within reach. / AFP PHOTO / KIM Won-Jin (Photo credit should read KIM WON-JIN/AFP/Getty Images)
TOPSHOT - This July 28, 2017 picture released from North Korea's official Korean Central News Agency (KCNA) on July 29, 2017 shows North Korea's intercontinental ballistic missile (ICBM), Hwasong-14 being lauched at an undisclosed place in North Korea. Kim Jong-Un boasted of North Korea's ability to strike any target in the US after a second ICBM test that weapons experts said could even bring New York into range - in a potent challenge to US President Donald Trump. / AFP PHOTO / KCNA VIS KNS / STR / South Korea OUT / REPUBLIC OF KOREA OUT ---EDITORS NOTE--- RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT 'AFP PHOTO/KCNA VIA KNS' - NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS THIS PICTURE WAS MADE AVAILABLE BY A THIRD PARTY. AFP CAN NOT INDEPENDENTLY VERIFY THE AUTHENTICITY, LOCATION, DATE AND CONTENT OF THIS IMAGE. THIS PHOTO IS DISTRIBUTED EXACTLY AS RECEIVED BY AFP. TO GO WITH NKorea-nucelar-missile-Japan-SKorea-politics, FOCUS by Shingo Ito and Park Chan-Kyong / (Photo credit should read STR/AFP/Getty Images)
SEOUL, SOUTH KOREA - AUGUST 26: People watch a television broadcast reporting the North Korean missile launch at the Seoul Railway Station on August 26, 2017 in Seoul, South Korea. North Korea launched several ballistic missiles into the East Sea resuming a provocative act in a month despite Washington's diplomacy-first approach toward the belligerent regime. (Photo by Chung Sung-Jun/Getty Images)
TOPSHOT - This picture from North Korea's official Korean Central News Agency (KCNA) taken on August 29, 2017 and released on August 30, 2017 shows North Korea's intermediate-range strategic ballistic rocket Hwasong-12 lifting off from the launching pad at an undisclosed location near Pyongyang. Nuclear-armed North Korea said on August 30 that it had fired a missile over Japan the previous day, the first time it has ever acknowledged doing so. / AFP PHOTO / KCNA VIA KNS / STR / South Korea OUT / REPUBLIC OF KOREA OUT ---EDITORS NOTE--- RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT 'AFP PHOTO/KCNA VIA KNS' - NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS THIS PICTURE WAS MADE AVAILABLE BY A THIRD PARTY. AFP CAN NOT INDEPENDENTLY VERIFY THE AUTHENTICITY, LOCATION, DATE AND CONTENT OF THIS IMAGE. THIS PHOTO IS DISTRIBUTED EXACTLY AS RECEIVED BY AFP. / The erroneous mention[s] appearing in the metadata of this photo by STR has been modified in AFP systems in the following manner: [at an undisclosed location near Pyongyang] instead of [in Pyongyang]. Please immediately remove the erroneous mention[s] from all your online services and delete it (them) from your servers. If you have been authorized by AFP to distribute it (them) to third parties, please ensure that the same actions are carried out by them. Failure to promptly comply with these instructions will entail liability on your part for any continued or post notification usage. Therefore we thank you very much for all your attention and prompt action. We are sorry for the inconvenience this notification may cause and remain at your disposal for any further information you may require. (Photo credit should read STR/AFP/Getty Images)
SEOUL, SOUTH KOREA - SEPTEMBER 15: People watch a television broadcast reporting the North Korean missile launch at the Seoul Railway Station on September 15, 2017 in Seoul, South Korea. North Korea launched a ballistic missile over Japan just days after the U.N. Security Council adopted new sanctions against the regime over its sixth nuclear test on Sept. 3. (Photo by Chung Sung-Jun/Getty Images)
People watch a television screen showing a file video footage of North Korea's missile launch, at a railway station in Seoul on November 29, 2017. North Korea test fired what appeared to be an intercontinental ballistic missile on November 29, in a major challenge to US President Donald Trump after he slapped fresh sanctions on Pyongyang and declared it a state sponsor of terrorism. / AFP PHOTO / JUNG Yeon-Je (Photo credit should read JUNG YEON-JE/AFP/Getty Images)
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China and Russia subsequently asked for more time to consider the U.S. proposal.

Ship tracking data in Thomson Reuters Eikon shows that the Lighthouse Winmore has mainly been doing supply runs between China and Taiwan since August.

Prior to that, it was active between India and the United Arab Emirates. In October, when it allegedly transferred petroleum products to the North Korean ship, the Lighthouse Winmore had its tracking transponder switched off.

The Trump administration has led a drive to step up global sanctions on North Korea in response to its efforts to develop nuclear-tipped missiles capable of hitting the United States.

The U.N. Security Council last week unanimously imposed new sanctions on North Korea for a recent intercontinental ballistic missile (ICBM) test, seeking to further limit its access to refined petroleum products and crude oil.

The U.S.-drafted U.N. resolution seeks to ban nearly 90 percent of refined petroleum exports to North Korea by capping them at 500,000 barrels a year.

It also caps crude oil supplies to North Korea at 4 million barrels a year and commits the Security Council to further cuts if North Korea conducts another nuclear or intercontinental ballistic missile test.

In September, the Security Council put a cap of 2 million barrels a year on refined petroleum products exports to North Korea. (Additional reporting by Hyonhee Shin and Josh Smith in Seoul, Venus Wu and Tyrone Siu in Hong Kong and Brenda Goh in Shanghai; Writing by Ben Blanchard; Editing by Robert Birsel and Nick Macfie)

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