U.S. concerned over North Korean arms ship, Panama awaits U.N.

PANAMA CITY/MIAMI Thu Jul 18, 2013 6:58pm EDT

1 of 2. A close up shows a missile-shaped object as forensic workers (background) work inside a container holding arms seized from the North Korean flagged ship 'Chong Chon Gang' at the Manzanillo Container Terminal in Colon City July 17, 2013.

Credit: Reuters/Carlos Jasso

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PANAMA CITY/MIAMI (Reuters) - A United Nations team is due to arrive in Panama next month to inspect a North Korean ship which was seized carrying arms from Cuba, a potential breach of U.N. sanctions that the United States said was "incredibly concerning."

Panama on Wednesday asked for the U.N. Security Council to examine the ship, the Chong Chon Gang, whose cargo of Soviet-era weaponry is suspected of being in violation of a U.N. arms embargo that covers all exports by Pyongyang and most imports.

The five-member team of U.N. experts will arrive on August 5, said Demetrio Olaciregui, a spokesman for Panama's Foreign Ministry. Panama's Security Ministry confirmed the date.

North Korea is under a host of U.N., U.S. and other sanctions due to repeated nuclear and ballistic missile tests since 2006 in defiance of international demands that it stop.

Pyongyang has asked for the ship and crew to be returned but Panama has not responded. The U.S. government has strongly backed Panama's seizure of the ship.

"There is a process in place and we are supportive of that process, because the bottom line is that any alleged violation of Security Council sanctions is incredibly concerning to us," U.S. State Department spokeswoman Marie Harf told reporters.

Panama has been at pains to underline it acted alone in seizing the ship, though security experts say the United States, which operated the Panama Canal until a final withdrawal on December 31, 1999, is likely to have provided assistance.

When asked whether information provided by the United States was used, a U.S. intelligence official said: "Yes."

A Panamanian frigate stopped the ship off its coast last week and seized its cargo after a tense standoff with the North Korean crew. The 35 crew members were arrested and charged with attempting to smuggle undeclared arms through the canal.

Authorities discovered weaponry aboard that Cuba said was "obsolete" Soviet-era missile equipment, MiG fighter jets and other arms being sent to North Korea for repair.

Earlier on Thursday, Britain's ambassador to the United Nations said the U.N. Security Council sanctions committee would examine the case.

The U.N. team of investigators heading to Panama will be drawn from an eight-member panel of experts appointed by U.N. Secretary General Ban Ki-moon to monitor the sanctions imposed on North Korea, according to diplomats within the Security Council.

TELLTALE SIGNS

Joe Reeder, former chairman of the Panama Canal Commission's Board of Directors and an ex-under secretary of the U.S. Army, said Panama's security apparatus cooperated closely with U.S. authorities, who may have shared intelligence on the ship.

Panamanian Security Minister Jose Raul Mulino "works very closely with both our Defense Department, our Southern Command headquartered in Miami and with Homeland Security," he said.

Officials were alerted by a number of suspicious factors, including where the ship was coming from and the fact that its transponder had been switched off in violation of shipping regulations for vessels over 300 tons, Reeder said.

"They ... were clearly trying not to be detected," he said.

Panamanian officials said they had found the ship's electrical equipment burned and that access to its storage areas had been blocked when they boarded the Chong Chon Gang.

Officials also noted that the ship's draft "was measurably lower coming back from Cuba than it was going out," Reeder said.

He said the raid was sensitive due to the neutrality of the canal, and the decision would not have been taken lightly.

"If (Panama had) busted that thing and there was nothing on it, everybody would have egg on their face. The canal is not an arm of the CIA and the U.S. has to respect that," said Reeder, who is now with the law firm Greenberg Traurig in Washington, D.C.

The U.S. Southern Command in Miami, the Pentagon's headquarters for operations in Latin America, declined to comment about the specifics of the Chong Chon Gang case, though incidents involving illegal maritime activity, from drug smuggling to human trafficking, fall within its responsibility.

"It's very routine for us to be working very closely with countries in the region and sharing information with partners," a spokesman for Southcom said.

(Reporting by Lomi Kriel and David Adams; Additional reporting by Alexandra Alper, Louis Charbonneau, Michelle Nichols, Luc Cohen, Lesley Wroughton and Tabassum Zakaria; Writing by Dave Graham; Editing by Sandra Maler and Eric Beech)