North Korea Earns $200 Million by Evading Sanctions

Independent United Nations observers have concluded that North Korea, despite being under severe international sanctions due to its nuclear program and being banned from selling oil and gas, has continued missile collaborations with the governments of Syria and Myanmar (Burma) and has earned $200 million from the export of prohibited products in just the last nine months. According to the UN observers' findings, the Pyongyang government has managed to access the global financial system by exploiting fundamental flaws in the enforcement of financial sanctions. UN observers believe that North Korea can still continue extensive conventional arms sales worldwide, alongside cyber operations to steal military secrets. A 213-page report prepared by the UN independent observers was presented to the Security Council's sanctions committee on Friday, February 1. Reuters and the Associated Press have obtained a detailed version of this report and have cited its headings. Another finding presented in the report concerns the activities of 'North Korean diplomats'; it states that these 'diplomats' play a central role in their country's prohibited programs. The UN Security Council has recently intensified sanctions against North Korea due to its nuclear program and continuous intercontinental missile tests; a resolution two months ago (December) in the Security Council, following a ballistic missile test that could reach US territory, banned North Korea from importing refined oil and intensified monitoring of suspicious ships carrying prohibited goods, including coal and oil towards North Korea; these regulations even allowed for the stopping of suspicious ships. Nikki Haley, the US ambassador to the UN, stated that the sanctions imposed against North Korea would reduce up to 90 percent of the country's oil exports based on 2016 export data. However, the UN observers have concluded that the expansion of UN sanctions does not align with 'political will' and international coordination and the level of resources allocated for enforcing the sanctions. The UN independent observers' team has scrutinized North Korea's cooperation with the missile programs of the Syrian and Myanmar regimes; Syria, despite its civil war, has continued its weapons program, including missile manufacturing and chemical weapons production, while Bashar al-Assad, the President of Syria, committed in 2013 to end its chemical weapons program to prevent a potential US attack. The UN observers' report has tracked dozens of cases of North Korean shipments of prohibited goods to missile and chemical weapons facilities in Syria over a five-year period up to 2017. One of the shipments included acid-resistant tiles that could be installed in the internal walls of chemical weapons factories. The report states that Myanmar has received ballistic missile systems and conventional military equipment from North Korea, although the Myanmar ambassador to the UN denied this. The lucrative oil transit trade through prohibited 'ship-to-ship' transfers has also been monitored by the observers, with the cooperation of international smuggling gangs and shipping cartels, as well as international companies involved in the trade of prohibited goods and oil sales agents, to trace the footprints of North Korea's illicit activities in these movements. The report indicates that North Korea has also managed to continue its coal exports, despite the ban, by concealing the original source of the coal shipments. The country has achieved this through a combination of signal diversion of maritime routes, sending shipments through third countries, and using false bills of lading and forged documents. According to the report, North Korean coal shipments in 2017 were sent to China, Malaysia, Russia, Vietnam, and even South Korea, which is considered North Korea's main enemy; foreign smuggling gangs have violated the coal export ban under the activities of shell companies registered in China, Hong Kong, the British Virgin Islands, as well as the Marshall Islands, Samoa, Seychelles, and even Britain and Australia, assisting North Korea in coal exports. Only Malaysia has reported one shipment to the Security Council's sanctions committee, while at least 15 other shipments were sent secretly. The Security Council's sanctions committee has stopped and sanctioned seven ships that assisted in the transfer of coal and oil to North Korea. The UN observers also noted the export of at least $125 million worth of lead to China last year; this is while lead is also among the items banned for export by Pyongyang under Security Council resolutions. The observers' report highlights significant flaws in the enforcement of sanctions against North Korea, noting that North Korean financial institutions, including the country's sanctioned banks, still benefit from the assistance of about thirty of their representatives sent abroad; these individuals have 'extensive activities' and play a crucial role in advancing their country's desired transactions, including by freely traveling in the Middle East and Asia and opening bank accounts. The report emphasizes that North Korea exploits a 'fundamental flaw' in the way sanctions are applied, which has allowed the country to easily establish shell companies in Asian financial centers, benefiting from the complicity of citizens from other countries in opening bank accounts and transferring money globally. However, the report also refers to the activities of intelligence agents and other forces working to advance North Korea's goals, stating that they continue to operate with bank accounts in Europe and the Asia-Pacific region, diplomatic passports, and diplomatic license plates that face less control at land and air borders. The detailed report prepared by the UN independent observers emphasizes that 'before a miscalculation with catastrophic consequences,' the year 2018 could be significant for international peace and security; apparently, this opportunity, according to these experts, can primarily be achieved through intensified monitoring strategies for enforcing sanctions. Donald Trump, the President of the United States, has emphasized the need for North Korea's denuclearization, stating that the country risks even its own existence with these dangerous activities. However, North Korea insists that it will not abandon its military nuclear program and expects the international community to recognize this capability; this has faced rejection from a large part of the global community, and Security Council resolutions in 2017 intensified sanctions against the country. In this context, Trump referred to Iran and North Korea as 'dictators,' and China and Russia as 'rivals.'