UN council draft “condemns” N.Korea launch

Draft says rocket launch contravened resolution 1718

* Diplomats say approval of statement is virtually assured (Recasts with draft, adds diplomats)

By Louis Charbonneau

UNITED NATIONS, April 11 (Reuters) – A draft U.N. Security Council statement “condemns” North Korea’s long-range rocket launch and says it contravened a previous council resolution banning ballistic missile and nuclear tests by Pyongyang.

The draft statement, which the five permanent members of the Security Council and Japan agreed and circulated to the other nine council members on Saturday, also called on the U.N. sanctions committee to take steps to enforce existing sanctions against North Korea. [ID:nN11344843]

“The Security Council condemns the 5 April 2009 launch by the Democratic People’s Republic of Korea (DPRK), which is in contravention of Security Council resolution 1718,” the U.S.-drafted statement said.

Resolution 1718, passed shortly after Pyongyang’s October 2006 nuclear test, forbids North Korea from launching ballistic missiles or carrying out further nuclear tests.

“The Security Council demands that the DPRK not conduct any further launch,” it said.

The full 15-member Security Council met behind closed doors to discuss the text at around 2:30 p.m. EDT (1830 GMT). They were expected to vote on the statement on Monday afternoon, Mexican Ambassador Claude Heller, the council’s current president, told reporters after the council meeting.

With agreement on the statement reached by the United States, China, Japan, Britain, France and Russia, its adoption on Monday by the full council was virtually assured, council diplomats said.

“We think this text sends a clear message,” U.S. Ambassador Susan Rice told reporters.

The U.N. Sanctions Committee on North Korea has not met for two years and has not designated any North Korean companies to be added to the U.N. blacklist, diplomats say. As a result, the sanctions have not been enforced, they say.

The statement calls for the committee to “undertake its tasks to this effect” and designate “entities and goods” to face sanctions. It adds that if the committee failed to do so by the end of the month, the council will make its own list.

The deal on the final text of a so-called presidential statement was clinched at a two-hour meeting on Saturday that ended a weeklong deadlock on a Security Council response to North Korea’s rocket launch last Sunday.

Presidential statements are formal statements of council positions read out by the president of the Security Council. They are generally considered to be weaker than resolutions.

The agreement, diplomats said, came after Japan agreed to back the U.S.-drafted text.

The United States, Japan and South Korea say North Korea launched a long-range ballistic missile, not a satellite, in violation of Security Council resolution 1718 banning the firing of such missiles.

Although the statement does not explicitly declare Pyongyang in “violation” of 1718, diplomats said the finding that it contravened the resolution, a compromise that was acceptable to Beijing, has the same legal meaning.

“It is a text which sends out, as we intended, a clear message to North Korea expressing our disagreement with what happened,” French Ambassador Jean-Maurice Ripert said.

Japan had been pushing for a council resolution that would declare Pyongyang in violation of resolution 1718 but Russia and China, which are permanent veto-wielding council members, opposed this. They were not convinced the rocket launch, which North Korea says put a satellite into orbit, was a violation. (Editing by Bill Trott and Philip Barbara)

1-Unicredit says faces $360 mln claim in New Mexico

MILAN, April 11 (Reuters) – Unicredit (CRDI.MI), Italy’s second-biggest bank by market value, said it faced a claim for more than $360 million in the U.S. state of New Mexico over sale of collateralized debt obligations (CDOs) by its units there.

Frank Foy and his wife have filed on behalf of the state a claim related to the sale of CDOs by Unicredit’s Vanderbilt unit to the New Mexico Educational Retirement Board (ERB) and the State of Mexico Investment Council (SIC), Unicredit said in its 2008 report published on its website, www.unicreditgroup.eu.

Foy said he was the New Mexico ERB’s chief investment officer before retiring in March 2008.

CDOs are high-risk complex financial instruments issued with loans, bonds and other assets as collateral and their value plummeted in the wake of the U.S. subprime mortgage meltdown.

“Mr. Foy seeks, on behalf of the State, a total in excess of $360 million in damages, plus penalties, under the New Mexico Fraud Against Taxpayers Act on the grounds that Vanderbilt and the other defendants mentioned below falsely obtained $90 million in investment funds from ERB and SIC,” it said.

Unicredit, the Italian bank that has expanded most strongly abroad, saw net profit plunge 38 percent to 4.01 billion euros ($5.33 billion) in 2008 as a result of the financial crisis.

“We don’t have any information in this very preliminary phase which would allow us to quantify a potential loss in a reliable manner. However, for the time being, the claim has not been regularly served to any company belonging to our group,” Unicredit said.

Efforts by Reuters to contact a spokesperson for Chicago-based Vanderbilt Capital were unsuccessful.

Foy claimed the state lost $90 million of the initial investment and $30 million more in lost earnings, the bank said.

That meant total damages sought exceeded $360 million because alleged damages are automatically trebled under the New Mexico Fraud Against Taxpayers Act, Unicredit said.

($1=.7530 Euro) (Reporting by Svetlana Kovalyova, editing by Anthony Barker and Philip Barbara)

Somali pirates, U.S. captive drift toward shore

MOGADISHU (Reuters) – A lifeboat used by Somali pirates holding a U.S. merchant marine captain captive drifted toward Somalia’s lawless coast on Sunday, with U.S. warships tracking it to keep the pirates from escaping to shore.

The lifeboat that was out of fuel had drifted to within 20 miles of the Somali coast by late on Saturday, and U.S. military officials said they feared that if it reached the shore, the pirates might try to escape with their hostage on land.

The U.S.-flagged Maersk Alabama container ship from which Capt. Richard Phillips was taken last week arrived safely in the Kenyan port of Mombasa on Saturday, as a Somali mediator headed to sea to try to secure his release.

“The captain is a hero,” one crew member shouted from the 17,000-ton Maersk Alabama container ship as it docked. “He saved our lives by giving himself up.

The ship was attacked by gunmen far out in the Indian Ocean on Wednesday but its 20 American crew apparently fought off the hijackers and regained control of the ship.

Relatives said Phillips volunteered to join the pirates in their lifeboat in exchange for the safety of his ship and its crew. The four pirates holding him want $2 million ransom for him and a guarantee of safe passage.

Three U.S. warships including the destroyer USS Bainbridge were in the area around the lifeboat.

Military officials said the pirates fired on a small U.S. craft that approached them from the Bainbridge on Saturday. No one was hurt by the volley and the craft withdrew.

Somalia has suffered 18 years of chaotic civil war, and the international waters off the Horn of Africa have become some of the most dangerous in the world.

HOSTAGES FROM DIFFERENT COUNTRIES

Phillips is just one of about 270 hostages from around the world being held by pirates preying on the busy sea-lanes of the Gulf of Aden and the Indian Ocean. The Maersk Alabama incident has captured world attention because Phillips is the first U.S. citizen seized and his crew regained control of the ship.

The standoff has forced U.S. President Barack Obama to focus on a place most Americans would rather forget. A U.S. intervention in Somalia in the early 1990s was a disaster, including the “Black Hawk Down” battle in 1993 that killed 18 U.S. troops and inspired a book and a movie.

A White House spokesman said Obama received multiple updates on the piracy situation on Saturday.

John Reinhart, president and chief executive of Maersk Line Ltd, said the FBI was investigating the hijacking in Kenya.

“Because of the pirate attack, the FBI has informed us that this ship is a crime scene,” he told reporters, adding that the crew will have to stay on board the vessel.

It was still not clear how the crew retook control of their vessel, which was carrying thousands of tons of food aid for Somalia, Uganda and Kenya.

Somali elders sent a mediator on Saturday in hopes of resolving the standoff between the U.S. Navy and the pirates holding Phillips, a 53-year-old Vermont father of two.

“They are just looking to arrange safe passage for the pirates, no ransom,” said Andrew Mwangura, coordinator of a regional group that monitors piracy.

The mediator took to sea in a boat but it was unclear how he planned to reach the pirates.

The gang holding Phillips remained defiant. “We will defend ourselves if attacked,” one told Reuters by satellite phone.

Pirates are keeping about 17 captured vessels on Somalia’s eastern coast, six of them taken in the last week alone.

(Writing by Todd Eastham; Editing by Philip Barbara and Kieran Murray)