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U.N. shipment of high-tech to North Korea, Iran unjustified and unfathomable, say investigators

EXCLUSIVE: The controversial shipments of U.S.-made computer equipment to North Korea  and Iran by the United Nations’ World Intellectual Property Organization was not only “unjustified” but something “we simply cannot fathom,” according to an independent investigative report, commissioned by WIPO itself.

The report puts new pressure on the Obama Administration to decide what to do next. The same report makes it clear that WIPO, a U.N.  agency  that considers itself beyond the reach of any nation’s laws, clearly violated U.S. export control  legislation in the process—and that the transgressions were worse than previously known.

North Korea and Iran are also under U.N. sanctions for their illegal nuclear weapons programs, and neither could have legally obtained such  goods anywhere on their own, the report says, pointing the finger directly at WIPO for making possible the sensitive shipments, otherwise clearly forbidden  under U.S. rules.

The high-tech shipments  to two of the world’s most dangerous governments were initially made public last April by Fox News, which reported that WIPO’s method for carrying  out the transaction in North Korea seemed designed to bypass safeguards set up in 2008 after  a similar scandal involving another U.N. agency, the United Nations Development Program. 

In the newest case involving  North Korea, the WIPO goods, ostensibly part of a routine technology upgrade for that country’s  patent retrieval system, included along with ordinary laptop computers and other goods  a “very capable” hardware firewall and network security system  that is subject to “a very high level of U.S. licensing requirements” for so-called “dual-use” items, which have a number of non-civilian applications.

“The equipment is subject to national security, anti-terrorism and encryption controls under U.S. law,” the report declared.

For its part, WIPO not only considers itself above the laws of nation states, but also seems to consider itself as an entity apart from any coordinated such U.N. efforts as sanctions, even though numerous U.N. Security Council resolutions call on U.N. bodies to cooperate in the sanctions efforts.

A 1974 agreement between the U.N. and WIPO, in Article 2, expressly says that WIPO “agrees to co-operate in whatever measures may be necessary to make co-ordination of the policies and activities of the United Nations and those of the organs and agencies within the United Nations system fully effective. The Organization agrees further to participate in the work of any United Nations bodies which have been established or may be established for the purpose of facilitating such co-operation and co-ordination.”

The same agreement, in Article 8, says that WIPO will “cooperate” with the U.N. “by rendering such assistance to it, as the United Nations may request.”

Click here to view the agreement.

Even so, how WIPO could deliver such equipment “to countries whose behavior was so egregious it

Even so, how WIPO could deliver such equipment “to countries whose behavior was so egregious it forced the international community to impose embargoes,”  was beyond the investigators’ .

The WIPO report throws the issue of what to do next about the high-tech transgression back to the Obama Administration. The report declares that “only the U.S.  can make the determination of whether the U.N. privileges and immunities ultimately would exempt WIPO from the enforcement of U.S . export control laws”—a legal possibility not often expressed at U.N. organizations.

The report says it is also a U.S. decision whether those same privileges and immunities  extend to the non-U.N. contractors that actually carried out the procurement and shipping of the sensitive U.N.’s bidding—something that the report noted has in the past not always been automatic.

Click here to view the full report.

Whether the U.S. will actually come up with such a tough response is another question.

A State Department official, in response to questions from Fox News, declared that “we agree with the inquiry team that  regardless of whether WIPO violated U.N. sanctions, this issue raises serious questions about management and transparency at WIPO, as well as coordination with member states and the United Nations Security Council sanctions committees. We will continue our ongoing efforts with member states and WIPO to pursue measures to improve its oversight, transparency and accountability mechanisms.”

Meantime, the report does not rule out the possibility that U.N. sanctions committees themselves might still declare the WIPO actions to be illegal, although it judges that possibility to be faint. The report lays out a  “broad” case that the WIPO transactions are illegal in U.N. terms, a view held by a number of well-credentialed international legal experts as well as a “narrow” case that they are not, before deferring to U.N. sanctions committees, which have not yet made a judgment.

But while clarifying the gravity of the offense against international peace and stability—not to mention the sovereign rule of law-- the 77-page report, written by a two-person panel commissioned by WIPO itself in August, only added to the mystery of why the obscure agency, headed by Director General Francis Gurry, decided to take such an explosive action in the first place.

One reason for the continuing lack of clarity was the short time frame and limited budget granted to the inquiry by Gurry himself.  The issue of the shipments came up among WIPO member states only in March, after a whistle-blowing staff member brought them to the attention of the Geneva diplomatic corps.

A number of countries, including the U.S., began  demanding explanations from Gurry behind closed doors , asking among other things why United Nations sanctions committees which monitor restrictions against North Korea and Iran were not informed in advance of the transactions.  

After a couple of months Gurry hastily announced that WIPO would make no more technology shipments to any country in the future, and assembled his investigative panel in August, giving it only three weeks to come to its conclusions.

The investigators were given relatively narrow terms of reference, which included whether the controversial shipments conformed to the programs initially passed by WIPO’s 185 member states, and whether the actions were in compliance with U.N. sanctions.

The report, a joint effort by a Swedish police official named Stig Edqvist and U.S. attorney John Barker, a former senior State Department official and export controls expert, goes considerably beyond that, however—especially when they focus on the demands of U.S. law.

Their report underlines that although many of the goods involved in the WIPO shipments were ordinary laptops and other conventional computer gear, some of them definitely weren’t.

In some cases, which included the network security device, the technology was  sensitive enough to require higher-level  U.S. export controls  even for  countries far less dangerous than the belligerent  rogue states, which are under  U.N. sanctions for their illegal nuclear weapons programs.

The only way the two  countries could get their hands on such things, the report declared, was by using an international organization that claimed diplomatic  privileges and immunities putting it above national laws—an organization, in other words, like WIPO.

The report addresses an allegation that surfaced immediately after the discovery of the sensitive shipments—that Gurry had arranged the transfer of the goods, especially in the case of North Korea, as a quid pro quo for the country’s support for his election as Director General.

The investigators asked Gurry himself and he “unequivocally denied there was any link, express or implied,” between his election and the shipment, the report states.

On the other hand, the document says, “we asked to speak with DPRK [Democratic People’s Republic of Korea] and Iranian mission representatives to obtain their views, but not surprisingly, they would not speak with us.”

The investigators then note that Gurry personally signed a diplomatic communication to the North Korean mission in June, 2011, to confirm plans for the equipment, which was only delivered in early 2012.

Beyond the narrow issues of who did what, and when, the report also takes a look at how WIPO actually communicated the details of the transfers to its  185 member states in the program and budget documents they approve, and declared that there was nothing there that would have tipped the exact nature of the transfers.

Those documents, typical for U.N. organizations, are enormously lengthy but short on important detail.
“In the broadest sense,” the report observes, “member states approved the overall technical assistance programs because these programs were included in the program and budget docs. Unless a member state  asked in advance of a shipment, however, the member state could not tell from the program and budget documents which countries would receive computers and equipment.”  

In other words, member states usually do not know what they are approving.

Moreover, WIPO staffers themselves were not always helpful. While  noting that WIPO has “no procedure requiring a separate review of programs for countries subject to UN sanctions,” the investigators also observe that “WIPO staff did not provide us with a basis for why they sought review of some shipments, but not others.”

In general, however, “WIPO’s provision of technical assistance for DPRK was handled in the same manner as it would have been for countries not subject to U.N sanctions,” a function of their general view that WIPO stood apart from national law, and even apart from what other parts of the U.N. were saying and doing about their client countries.

The WIPO report offered a sharp rebuttal of that attitude, arguing that WIPO staff, “shares the obligation to support the work of other U.N. bodies, including the sanctions committees.”

It also suggests the common-sense idea that WIPO could get out of the business of facilitating otherwise illegal acts if it made“a deliberate policy decision, as other international organizations have done, not to deliver technology  and equipment  to a country if that [country] could not legally obtain such technology  and equipment on its own.”

An additional way to do that, it suggests, would be to make the contractors who actually procure and ship such equipment at the U.N.’s behest to obtain export licenses from the manufacturer nations—such as the U.S.—in advance of shipment.

For its part, WIPO told Fox News that “At the moment, WIPO is reviewing the report and considering its recommendations.”

Most of the solutions it was proposing, the WIPO report said, had already been suggested four years earlier—in the wake of the previous scandal involving the transfer of hard currency and dual-use technology to North Korea by the United Nations Development Program.

That scandal ended with a 353-page report, compiled after an eight-month investigation, which found similar and even more extensive abuses on the part of UNDP, and which suggested a number of changes to UNDP procedures for dealing with such sensitive items in Pyongyang.

“We have drawn heavily from this report on the UNDP recommendations (in some cases verbatim),” the WIPO report notes drily, as well as those from other U.N. agencies that actually had developed better practices and procedures for dealing with sanctioned countries.

If those older UNDP-related recommendations had been in place in WIPO’s case, the latest report noted, “It is unlikely that WIPO would have proceeded as it has in this case.”
Or maybe not. The WIPO report notes that despite UNDP’s previous extended brush with the consequences of shipping touchy materials to suspect places, it was also involved in the latest scandal, because “WIPO sought the assistance of the UNDP to handle the actual delivery of the shipment” from China to North Korea., under a 1978 agreement between the two agencies.

Says the report, in carefully muffled prose: “WIPO staff members informed us that they were not aware of, and we could not  confirm that, WIPO staff sought confirmation from UNDP regarding whether the UNDP had checked to determine whether the deliveries were consistent with the U.N. sanctions requirements  or were consistent with the license requirements under U.S. law for the equipment with U.S. origin content.”

In other words, WIPO staffers couldn’t say whether UNDP itself had checked on the propriety of the shipments.

The report does not follow up with UNDP. Fox News, however, did, citing the report’s own wording.

UNDP's reply: “UNDP is currently analyzing the report and we will get back after this review is concluded.”