N. Korea flag barred on 9 ships

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A Syrian shipping company operates a North Korean-flagged freighter that is owned by one of nine Delaware-based companies, a practice barred last month by U.S. government sanctions that prohibit U.S. firms from flying the North Korean flags on ships.

The nine ships that are owned or operated by companies incorporated in Delaware are listed in the authoritative industry reference Fairplay World Shipping Encyclopedia, including the cargo ship United that is owned by a company known as United Maritime Co. and operated by Phoenicia Maritime, whose headquarters are in Tartous, Syria.

Industry sources also said that North Korean-flagged vessels are owned or operated by companies in Belize, Greece, Iraq, Lebanon, Liberia, the Marshall Islands, Panama, Pakistan, Romania, St. Vincent and the Grenadines, Singapore, Syria, Turkey, Ukraine, the United Arab Emirates and Yemen.

The Treasury Department's Office of Foreign Assets Control last month ordered all U.S.-incorporated shipping companies to stop using North Korean flag registry for their ships after intelligence reports indicated that Pyongyang was making money from selling its flag at higher-than-normal prices, and that some of the ships are engaged in illegal activities.

Administration officials said the sanctions reversed Clinton-administration rules that loosened Korean War-era economic sanctions on North Korea as part of efforts to induce the communist regime to halt long-range missile tests.

Weeks after the sanctions went into effect on May 8, U.S. intelligence officials said there are signs that North Korea is preparing a test launch of its long-range Taepo-Dong 2 missile, which was first flight-tested in August 1998.

The shipping sanctions are part of "defensive measures" aimed at punishing North Korea for illegal activities that include counterfeiting U.S. currency, specifically a high-quality fake $100 bill known as a supernote, as well as drug trafficking and human smuggling, the officials said.

In addition to the Syrian-owned United, the eight ships that are owned or operated by Delaware-based companies covered by the new sanctions are:

• The cargo ship Tolstoy, formerly a Ukrainian-flag freighter that now is owned by the Delaware-based Pegasus Shipping; and the refrigerated cargo ship Lady Haya, formerly the Spanish-flagged ship that is owned by the U.S. company BCK International Shipping Ltd.

• The North Korean-flagged cargo ships Johaynna, owned by Faissal Shipping Inc.; the Haj Sayed, owned by the Trabeh Lines Co.; Ahmad N, owned by Reem Shipping and managed by Phoenicia; the Alalaa 1, owned by Sharm Shipping; and the Boushkin, owned by Perseus Shipping, are all listed as being U.S.-owned or -operated and having headquarters in Delaware City, Del.

• The cargo ship Farouk-M, owned by FYMT Shipping, which is based in Alexandria, Egypt, and has an incorporated subsidiary in Delaware and also purchased a North Korean flag registry.

A Treasury Department official said none of the ships should be flying the North Korean flag as of May 8, but it is not known whether the ships have changed their registries. Administration officials say North Korea was charging two or three times the market rates for ships to fly its flags.