* China may block report on North Korean breaches-envoys
* No reports of illicit nuclear, missile transfers-panel
* North Korea skirted ban on luxury goods, arms sales-report (Adds details on Myanmar)
By Louis Charbonneau and Michelle Nichols
UNITED NATIONS, May 17 (Reuters) - A U.N. panel of experts that monitors compliance with sanctions on North Korea is investigating reports of possible weapons-related deals between Pyongyang and Syria and Myanmar, the panel said in a confidential report seen by Reuters on Thursday.
“The DPRK (North Korea) continues actively to defy the measures in the (U.N. sanctions) resolutions,” the panel said in the report, which it submitted to the U.N. Security Council’s North Korea sanctions committee earlier this week.
“Member states did not report to the committee any violations involving transfer of nuclear, other (weapons of mass-destruction)-related or ballistic missile items,” it said. “But they did report several other violations including illicit sales of arms and related materiel and luxury goods.”
U.N. panel of experts’ sanctions reports are highly sensitive. China, which is named in the report as a transit hub for illicit North Korean arms-related breaches, has prevented the 15-nation Security Council from publishing past reports and may do so with the latest one, U.N. envoys have told Reuters.
“Although the (sanctions) have not caused the DPRK to halt its banned activities, they appear to have slowed them and made illicit transactions significantly more difficult and expensive,” the panel’s report said.
One of the cases involving suspected illicit arms trade with Syria was reported to the council’s sanctions committee last month.
“In April 2012, France reported to the committee that it had inspected and seized in November 2010 an illicit shipment of arms-related materiel originating from the DPRK and destined for Syria,” the report said.
The shipment, which was on board the ship M/V San Francisco Bridge, was said to be containing “copper bars and plates.”
“However, France’s inspection of the cargo revealed that it contained brass discs and copper rods used to manufacture artillery munitions (pellets and rods for crimping cartridges and driving bands) and aluminum alloy tubes usable for making rockets,” the panel said.
Another case cited in the report involved a 2007 shipment of propellant usable for SCUD missiles and other items that could be used for ballistic missiles. The panel had referred to it in last year’s report but added details about a Syria connection and confirmed that it had been transported via China.
“This shipment originated in the DPRK, was trans-shipped in Dalian (China), and Port Kelang (Malaysia), and transited through other ports,” the report said. “It was en route to Latakia, Syria.”
Although both shipments mentioned in the report were made before the Syrian government launched its assault on opposition demonstrators in March 2011, diplomats said they were worrying because it showed the kinds of items Damascus had been trying to add to its arsenal - and the aid it received from North Korea and China.
The panel said it could not prove North Korea continued to maintain ballistic missile cooperation with Iran, Syria and other countries, “but notes that it would be consistent with reports of the DPRK’s long history of missile cooperation with these countries and with the panel’s observations.”
Ten thousand rolls of tobacco, 12 bottles of Sake, and some second-hand Mercedes Benz cars are among the latest reported breaches by North Korea of the luxury goods ban.
The panel said it was looking at the possibility North Korea has a deal with Myanmar on conventional weapons cooperation in violation of Security Council sanctions passed in 2006 and 2009 after Pyongyang’s nuclear test in those years.
The report said the panel took note of statements by the new president of the former Burma that Myanmar does not “have nuclear or weapons cooperation with the DPRK.”
There have been media reports that Myanmar’s previously ruling generals, who recently ceded power to a civilian-led government, had been exploring nuclear-weapons cooperation with North Korea. Myanmar has always denied such reports.
The panel said it took note of those denials but expressed concern about the possibility of “other prohibited cooperation” between Myanmar and North Korea.
It referred to a recent statement by the speaker of Myanmar’s new parliament, Thura Shwe Mann, who, according to the panel, announced he had signed a memorandum of understanding with Pyongyang during a 2008 visit to North Korea.
“It was not on nuclear cooperation as is being alleged,” the panel quoted the speaker as saying. “We studied their air defense system, weapons factories, aircraft and ships. Their armed forces are quite strong, so we just agreed to cooperate with them if necessary.”
The panel said Shwe Mann may have visited a ballistic missile factory in North Korea and added that it was concerned the memorandum of understanding violated U.N. sanctions, which forbid North Korea from selling arms and related technology as well as from buying or selling nuclear and missile technology.
The United States and its allies are worried that North Korea is planning a third nuclear test after its recent failed missile launch. They are also concerned that Pyongyang is expanding its uranium enrichment program in addition to its plutonium reprocessing work that has yielded atom bomb fuel.
High-grade enriched uranium, like plutonium, can be used as fuel for a nuclear weapon.
But the U.N. panel said it had seen no evidence that North Korea had been attempting to import banned items like maraging steel and high-strength aluminum tubes, which it would need to expand its enrichment centrifuge program.
“Since May 2011, no attempts by the DPRK to import these have been reported to the committee or brought to the attention of the panel,” the report said.
“It remains unclear whether this is because the DPRK has succeeded in doing so undetected, or stockpiled these items before sanctions were introduced, or is not after all trying to procure them,” the panel said.
The panel said it did not agree with suggestions that North Korea could produce high-strength maraging steel, adding that even if it could do so, it would likely not be able to produce it with the quality needed for enrichment centrifuges.
The panel also took U.N. member states to task for lax application of the punitive measures, saying “overall implementation of the sanctions leaves much to be desired.” (Reporting By Louis Charbonneau and Michelle Nichols; Editing by Peter Cooney)