Jeffrey LewisThe Michael Ranger Files: Part 1

Andrea Berger over at RUSI has access to 500 pages of court transcripts relating to the prosecution of an arms dealer named Michael Ranger,  who was convicted of brokering the sale of MANPADS  in violation of arms embargoes on North Korea and Azerbaijan.  The transcripts are filled with insights about DPRK arms sales.

Andrea was kind enough to write a three-part series on juicy bits related to DPRK arms marketing.

The Michael Ranger Files: Part 1

By Andrea Berger

Michael George Alan Ranger is a name which many of you will recognize. A UK-based arms dealer since the 1980s, Ranger has been splashed across UK newspapers on a few occasions: once for selling the weapons that were used in the massacre of sixteen people in Hungerford, Berkshire in 1987; and again in 2011 and 2012, when he was charged with and subsequently convicted of brokering the sale of man-portable air defence systems (MANPADS) from North Korea to Azerbaijan in breach of arms embargoes against both countries.

Ranger was arrested for the latter offence on 14 March 2011 at Stansted Airport, and prosecuted at Southwark Crown Court in July of 2012. While some of the findings from the hearings were reported as they were in progress, the finer details of the case have never been previously publicised. This week I’m commandeering Arms Control Wonk with a three-part series that analyses the (over 500!) pages of court transcripts and the nuggets they contain about North Korea’s arms marketing practices. Part one looks at the evolution of Ranger’s relationship with North Korea and the role of brokers in North Korean weapons sales.

The Relationship in Brief

Michael (or, as his friends call him, ‘Mick’) Ranger claimed to have been first introduced to North Korean arms dealers in 2004 by an unnamed Singapore-based friend, whom Ranger said had been working with these North Korean traders as part of deals “between countries in Asia”.

The initial meeting took place in the rather swanky Annapurna Hotel in Kathmandu, Nepal. The North Korean delegation was headed by O Hak-Chol (referred to by Ranger as Mr Chol or ‘Cholly’), a ‘Mr. Park’ and a ‘Mr. Lee’. All three were representatives of Hesong Trading Corporation – a subsidiary of North Korea’s primary arms trading firm, the Korea Mining Development Trading Corporation (KOMID). The reported subject of the meeting was a deal for three units of a multiple-launch rocket system (MLRS), which Ranger says was “bigger than anything the Russians made”. He described the system as having rockets “ten inches in diameter” and a range of 60km. It is probable that he was referring to one of the North Korean variants of the 240mm MLRS.

That deal, which Ranger claims was successful from the North Korean perspective, got him in Hesong’s good books. Thereafter, he said, “Mr Chol used to come back to me offering me bits and pieces because he thought I was a big dealer”, and over time Hesong would reach out to more actively involve him in generating new business leads.

One arose in early 2007, when Hesong offered Ranger a consignment of rare Korean War-era and pre-Korean War-era rifles, which Ranger was eager to import to the UK. But before Hesong would let the deal proceed, Ranger recalls Mr Chol telling him “I would really like a letter if you can get it for me from the import authorities to confirm that they have no problems with North Korean goods entering the UK.” This is a surprising request. It’s unlikely that North Korean arms traders suddenly developed a particular respect for national import and export licensing requirements or the UK’s Department of Business, Innovation and Skills. Instead, my guess is that Hesong was aware of the Security Council sanctions resolution on the DPRK that had been passed only a few months earlier, in October 2006, and was eager to test what the UK and EU approach would be to implementing it. Alternative theories welcome.

In fact, the EU’s Common Position of November 2006 went beyond what was required at the Security Council level, by forbidding EU nationals from procuring “arms and related materiel of all types” from North Korea, rather than just the heavy systems, ballistic missiles, and WMD-related goods banned at the UN level. Ranger inquired with the authorities as directed, was told of the parameters of the new EU Common Position, and emailed his Hesong counterparts to inform them that the legislation meant that the deal could not go ahead.

Ranger apparently developed amnesia somewhere between 2007 and 2010 and forgot about the EU Common Position altogether. In 2010, in steps another shady character – an American oil tycoon from Alabama with connection to the Azerbaijan Ministries of Defence and Transport – telling Ranger that Azerbaijan may be in the market for a wide range of military hardware. The two pack their bags for Baku, where they get driven around in their own motorcade to meetings about the prospective arms deal. On the Azerbaijani shopping list were machine guns, pistols, MANPADs, multiple rocket launch systems, and an assault rifle factory.

Officials in Baku initially requested 70 US-developed ‘Stinger’ missiles, but Ranger swiftly informed them that they had “no chance” of procuring MANPADs of that type. So, using his own discretion and initiative, Ranger instead contacted his Hesong interlocutor regarding the prospect of sourcing the MANPADs and MLRs from North Korea. In response, Mr. Chol provided him with a quote for 70 “Igla” MANPADs with launchers. I’ll come back to the details of the quote and the conditions Hesong attached to it in parts two and three of the series.

E-mails from the time confirm that Ranger was in simultaneous discussions over two further arms sale deals in partnership with Mr. Chol. One concerned the possible procurement by Yemen of 500 units of North Korean 12.7mm heavy-calibre machine guns with spare barrels, tripods, and ammunition cans. The other was for Kazakhstan, which was seeking variants of the Soviet-designed AKM assault rifle. According to Ranger, both of these countries eventually sought other suppliers (as I outline in my new book “Target Markets: North Korea’s Military Customers in the Sanctions Era”, there is some reason to believe that Yemen was winding down its military relationship with North Korea under US pressure around the time Ranger was trying his luck there).

The Role of Brokers

From the court transcripts it is clear that in the above relationship both the Hesong representatives and Ranger were essentially acting as facilitators to generate new leads for North Korean products. Other brokers in the USA or Turkey were involved in negotiating the Azerbaijan deal, but in a liaison function with the buyer rather than the prospective supplier.

O Hak-Chol’s emails to Michael Ranger, read out in court, show clearly that Mr. Chol and probably even Hesong as a whole did not have a decision-making mandate in respect to the deals described above. In one instance where Azerbaijan wanted to refine the initial order, Mr. Chol stated that if certain conditions (not set by Hesong, but by the manufacturer) were met, “I will have the intention to talk to the maker [again]”. Similarly, he repeatedly insisted on having to clarify with “his people” or seek their confirmation, including on logistical matters — for example, whether orders could be bundled for shipment.

From this reading, it appears as if Chol’s function was very much about marketing and the initiation of new business leads. While he was empowered to contact the manufacturer of the goods directly, he did not have the ability to take deal-making or –breaking decisions on logistics, product samples, or price. It is likely that those authorities rest instead with Hesong’s parent company, KOMID, who may be the “people” he is referring to.

In fact, one of the only apparent decisions taken by Mr. Chol was to form a strong working relationship with the second broker in this situation, Michael Ranger. Over the course of their relationship, Mr. Chol gave Ranger increasing license to market North Korea’s goods on his own initiative. He offered Ranger “bits and pieces” of information about new products that were available, and encouraged him to find buyers. As is evident from negotiations with Azerbaijan, Yemen, and Kazakhstan, this approach had merit. Ranger identified market openings through his extensive network of arms-trading contacts around the world, in a way that Hesong representatives may not have been able to. Azerbaijan, for example, is not previously known to have bought military goods or services from North Korea, and it was Ranger who seeded the idea of doing so.

Ranger was also able to interact with officials from prospective client governments directly. Azerbaijan’s Ministry of Defence was clear that it did not want the headaches involved in North Korean dealers setting foot inside the country, nor did they want to go on a working holiday in Pyongyang. Engaging Michael Ranger was a way to get their hands on the same wares without inviting the diplomatic headaches that would come from politically poisonous direct engagement with North Korea.

A Model for the Future?

From the court transcript it is apparent that Ranger was not the first foreign-national broker to be involved in arms trade with North Korea. His unnamed Singapore contact, who Ranger said was very concerned about the trial, also played this role. Ranger will likely not be the last non-North Korean facilitator that the country’s arms trading firms co-opt either. While Ranger may have eventually been caught, throughout the course of his relationship with O Hak-Chol he opened new doors that North Korean firms may not have been able to step through alone. As new sanctions packages and increased international scrutiny further complicate North Korea’s ability to move goods, funds and people freely, foreign-national brokers may become a more fixed component of North Korean arms marketing and sales.

In part two, I examine how Hesong and Ranger marketed North Korea’s catalogue of weapons and the sticking point that brought the Azerbaijan deal to the brink of collapse. In part three, I look at North Korea’s weapons pricing and the details contained in the Ranger transcripts outlining plans for the movement of the goods and funds.