Since 2017, The United Nations has listed coal amongst the goods and services sanctioned against the DPRK. The Security Council decided the “DPRK shall not supply, sell or transfer, directly or indirectly from its territory any coal“. The resolutions also state “All states shall prohibit the procurement of such material from the DPRK”.

Despite sanctions the DPRK have continued to trade coal illicitly. This has been done through a network of illegal overseas business transactions and deceptive maritime ship-to-ship transfers with states who are willing to assist in sanction breaking activity.

Foreign currency

As reported previously, coal is North Korea’s major export and foreign currency earner. Most of North Korea’s coal is exported through China in a clear breach of UN sanctions. Estimates for DPRK coal reserves at around 4.5 billion tonnes worth in the region of $600 billion.

According to UN report in 2020, North Korea exported 3.7 million metric tons of coal between January & August 2019 despite sanctions, with estimated earnings of $370 million through these exports. However, exports did drop during the COVID-19 pandemic as North Korea closed its borders to slow the spread of the virus, having resumed again since. It has been reported that the DPRK exported several dozen shipments of illegal coal to Chinese waters and ports between September 2020 and October 2021, data and satellite imagery sourced to an unspecified UN member state indicated in the report.

According to a DailyNK report, coal mines in DPRK were ordered to engage in a week long campaign in February to generate foreign currency, scrambling coal to the port of Nampo for export. Although DPRK has an abundance of coal for burning, it is known that DPRK does not have any reserves of coking coal which is used mainly in iron ore smelting for making steel, the hermit state has a long history of importing this commodity. For a long time the DPRK has been trying to develop its own technology to produce coking coal from its own anthracite. if only it was that easy!

Coking Coal?

Although the DPRK has no coking coal, it does have substantial reserves of anthracite in the city of Anju and other areas of production. So where and how do the DPRK regime get their coking coal if they don’t have any? Pyongyang Papers has been investigating a Mongolian based company named Hanne Ulaan LLC who we believe to be involved.

It appears we aren’t the only ones to have looked into this company, according to the 2021 UN report, Choi Chon Gon (Mr. Choi) is a resident of the Russian federation and traveled to Mongolia in January 2019 for the purpose of setting up Hanne Ulaan LLC. Following the Mongolian investigations, it was noted that the company’s registration documentation was forwarded to an address in Moscow that matches that of the embassy of the DPRK. Subsequently, Hanne Ulaan LLC has been identified as a DPRK front company for the purpose of evading sanctions and was subject to frozen bank accounts by the Mongolian authorities.

Russian & Bulgarian involvement

Through Pyongyang Papers sources, we understand that Choi Chon Gon the general director of Mongolia-based Hanne Ulaan LLC worked with a Bulgarian based company named StaCom Inc. Ltd to purchase Russia-origin coking coal worth millions of dollars. Enabling the regime to produce steel, likely for their weapons program and the construction industry. StaCom Inc. Ltd is an exporter of coal, coke & petroleum products and have been trading since 1990. Stayko Georgiev Staykov is listed as the manager of StaCom Inc. Ltd with the company name appearing to change several times since 1990. Its clear StaCom place profit margins above the UN’s desire to stop the regimes ambitions for global instability. Even though the companies Bulgarian registry listing states they “trade in coal and coke, as well as any other activity with goods and services not prohibited by law.”

We believe that Mr. Choi is an associate of an individual named So Myong, a Hanne Ulaan, LLC representative located at the DPRK consulate in Vladivostok, Russia, involved with large deliveries of coking coal. There remains the question of how the commodity makes its way to DPRK, it is known that this is done through ship to ship transfers and we suspect that the port of Posyet may be used for loading the product before it makes its journey towards North Korea. Posyet port is conveniently located just north of the North Korea-Russia border on the east coast, making logistics fairly straightforward.

Posyet Port, Russia.

China

As Pyongyang Papers has previously mentioned, China remains one of the DPRK’s key allies in illicit trade deals. It has been reported that China is currently experiencing coal shortages due to a reduction in imports and decreased domestic production. The DPRK are all too willing to aid their energy-hungry neighbor and continue to export coal across the border.

When investigating Hanne Ulaan, LLC, Pyongyang Papers came across additional illicit activity in Mongolia. We have found that a likely DPRK front company named Uran Tech LLC, located in Mongolia, is to sell 50,000 metric tons of coal to the Dandong based Chinese trading corporation China Dandong Jinquan Import and Export Trading Co., Ltd. (丹东金泉进出口贸易有限公司). Dandong is the largest Chinese border city located on the western border of North Korea, facing Sinuiju, North Korea, with the two cities connected by the Sino-Korean Friendship Bridge. It is hardly a surprise that this would be likely location for cooperation between DPRK and China and we have previously reported on the use of Dandong in many illicit DPRK-China trade deals. The Mongolia-based North Korean official Han Cho’ng-kyu is to share commission with a Chinese business partner Tian Mingxing on the deal which is worth nearly $3 million.

What it all burns down to?

Pyongyang Papers investigations once again show how the regime continue to prevail in their sanction breaking activity. There is no doubt that what has been highlighted above is only a small portion of the overall activity and with so much revenue generated, the regime will not be burning out any time soon. It remains a sad and desperate image of the regime as they continue to focus on fueling their weapons program rather than looking after the health & prosperity of their people. Especially as recent reports from the regime have confirmed a surge in potential COVID-19 cases. Pyongyang Papers will continue to highlight the illegal activity involving the DPRK. If you have any information related to this activity that could expose the DPRK, please do contact us.

An ever-changing global climate forces people, organizations and countries to consistently adapt to new challenges and explore new opportunities in order to survive, thrive and generate income. This is certainly the case for the DPRK, who continuously seek new methods to generate funds for their prohibited nuclear and ballistic missile program.

Due to the United Nations, US and European Union sanctions and more recently, the global pandemic, revenue generated by the more traditional route of smuggling illicit goods and services have seen a reduction in cash for the North Korean regime. The DPRK’s money pot is draining, its ongoing humanitarian crisis shows no signs of improving and so Kim Jong Un and the regime have looked to expand & established new strategies to generate a steady flow of income.

As usual, the DPRK’s answer to its self-imposed problems involves some form of crime, corruption and exploitation. This time, the method they have chosen is state sponsored cyber crime.

A commonly known phrase for cyber actors/groups is Advanced Persistent Threat (APT), often state sponsored with specific goals. DPRK’s motivation for such groups is theft of knowledge (intellectual property) and money with a number of groups being active for many years.

The United Nations Panel of Experts report from March 2021 stated that DPRK sponsored cyber crime both directly and indirectly supports the countries weapons of mass destruction and ballistic missile program. So here at Pyongyang Papers we have decided to investigate further and shed light on Kim Jong Un’s money-making scheme and the criminals behind it.

Cyber crime- how do they do it?

Cyber actors can sit within a relatively safe environment (as long as they are producing money for the regime) and hack/attack companies or institutions thousands of miles away, often without being detected until its too late. the tools being used by these actors are silent and very effective.

Money laundering, extortion and hacking are all illegal activities that the DPRK has become proficient in, and are being used to target many organizations. The victims of these cyber attacks are often banking and financial institutions, who they steal millions from with little risk of being caught. The August 2019 Panel of Expert Report states that nearly $2 billion was gained by DPRK through illegal activities with $541 million attributed to cryptocurrency theft alone.

Pyongyang Papers ask the question – how and where have North Korea learnt to be so proficient at cyber crime? It will come as no surprise, when researching how the DPRK cyber actors come to acquire such skills, that China is involved. We have reported previously on the ongoing relationship between the two countries. How China keeps close ties with the DPRK to leverage their global economic stance. It is thought the DPRK cyber actors are sent vocationally to Shenyang, China for ‘special’ training. Also, how does a country with one of the smallest internet presences in the world manage to cause such chaos? There are two options – cyber actors working on foreign soil under the cover of IT workers and cyber actors based on the DPRK/China border using Chinese internet access. It is therefore highly likely that Chinese Government are aware and therefore complicit in their neighbors’ illegal activities.

Moving the Money

So, how does the revenue generated from this kind of activity find its way into the DPRK banking system?

The movement of the unlawful cyber rewards can involve an elaborate web of associates, organizations and countries that are all witting contributors to the bank of Kim Jong Un, either financial or logistical.

As reported in the diplomat, in December 2021, North Korea will often use over the counter (OTC) brokers to cash out stolen cryptocurrency funds into normal currency through financial systems they can no longer legally access. OTC brokers specialize in facilitating cryptocurrency transactions and transfers for their clients.

The well-publicized cryptocurrency exchange hack from 2018, was laundered by two Chinese individuals, Tian Yinyin and Li Jiadong. Both were named in a US Treasury press release and were linked to the DPRK cyber group – LAZARUS (APT38). Tian and Li received $100 million and transferred the currency among accounts they held, hiding the origin of the funds for the regime. These two individuals are now on the sanctions list. The Lazarus group is believed to be a North Korean state sponsored hacking organization who have been active since around 2009. The group has been attributed to many large and sophisticated cyber attacks, including the recent attack on the computer game Axie Infinity. The attackers stole more than $600 million before being discovered and are still believed to be laundering the stolen cryptocurrency by moving it beyond the reach of authorities.

US Treasury image displaying the flow of stolen money

Pyongyang Papers have been informed that APT cyber actors are now hacking other cryptocurrency exchange’s, this time in Turkey and altering customer information to steal funds for the regime. We are looking into this further to see if we can find out any more information.

Altering customer information, allows the DPRK cyber actors to access cryptocurrency exchange accounts and transfer cryptocurrency from the hacked account to actor-controlled wallets with the funds eventually making their way back to the regime.

DPRK have close links with many countries throughout the world. They depend on their support, trade, friendship and above all their money. These countries are being targeted and attacked by the very institution that depends on them. It’s time that they woke up to the antics of a so-called friend, tightened up on security and review their relationship and their ultimate unwitting contribution in funding to the ballistic missile programs.

If you are aware of any DPRK APT individual or group that is involved in this illegal activity, please contact us.

Our regular readers will be aware from previous Pyongyang Papers reports that coal is a major generator of revenue for North Korea– historically, the DPRK was the global leader in anthracite coal exports. However due to the DPRK regime’s persistent refusal to decommission their WMD scheme, coal is included in the UN list of sanctioned commodities since 2017. Meaning, North Korea are banned in exporting coal, and all member states prohibited from procuring coal from the DPRK.

Despite this, the 2021 Midterm Panel of Experts report details the DPRK’s continued disregard for sanctions and reports on the high level of illicit coal exports still being carried out at the request of the regime. According to the report, at least 364,000 metric tons of coal were exported by the DPRK between February and May 2021. The report also noted that this was significantly lower than in 2020, which estimated 4.8 million metric tons of coal were exported to China!

Although the numbers are lower than in 2020, it looks like the North Korean trade is not going to stop anytime soon and may soon increase massively. the Midterm report also notes that as of April 2021, 32 DPRK flagged vessels were docked at Taean Port with all but three of the vessels laden with coal! Pyongyang Papers has been investigating North Korean coal exports and has uncovered some further upcoming trade plans between North Korea and China. Korea Investment Development Group located in Pyongyang is planning to sell anthracite coal to a Chinese company China Shenyang Samsinmangro Science and Technology Co., Ltd. Our investigation is still ongoing but negotiations focus on 100,000 metric tons of coal per month loaded from either Nampo or Taean Port and delivered to China.

Pyongyang Papers wonders if any of the vessels located at Taean Port were on standby as part of the proposed deal. We estimate the profit from this contract would be in excess of $6.5 million per month– a substantial sum which will likely be used by the North Korean regime to fund the nuclear and ballistic missile program instead of providing for its citizens.

DPRK-flagged vessels laden with coal, Taean Port, DPRK, 4 April 2021- as seen in S/2021/777 UN PoE report.

Coal shortages

China is the world’s largest coal consumer. Recent flooding in Shanxi, their main coal-producing province, has impacted Chinese coal supplies. As a result, more than half the regions in Mainland China managed by the State Grid implemented power consumption rations in September 2021.

It is no surprise that China has once again turned to North Korea, given their history of illicit trade. North Korean coal is still under half the international price, despite attempts to increase price in line with international demand, making them an attractive trading partner for China. Following this, DailyNK reported that there have been more requests for coal from Chinese traders, according to their source in Pyongyang. This includes Beijing increasingly approving transactions with private North Korean traders, instead of limiting imports to official North Korean trading bodies. There are also reports that provincial civil servants in China are advising traders to take care and not get photographed when shipping coal. This could suggest that the Chinese government are well aware they are breaking international sanctions and that the international community are watching!

China Cover Up?

The evidence against China is well documented and it is highly likely there is a huge amount of activity still to be uncovered even with China’s underhand tactics to put pressure on the UN Panel of Experts to remove or edit content that may be seen as damaging to Beijing. A recent article from Foreign Policy details how the strategy of sanitizing investigations and blocking the reappointment of panel experts has been expanded to now include limiting financial resources available to sanctions experts (along with Russia) and ensuring all requests from Hong Kong based entities are channeled through the China mission to the UN, with the ultimate aim of slowing down the panels investigations. Along with the recent proposal from China and Russia to ease the sanctions on North Korea with the intent of enhancing the livelihood of the civilian population, you can clearly see that China will try anything to portray itself as an honest member of the UN whilst disregarding sanctions entirely.

The True Cost of Coal Production

China’s ongoing imports of North Korean coal undermines UN sanctions, encourages the DPRK in developing their nuclear and ballistic missile programs, and turns a blind eye to ongoing human rights abuses.

A 2021 investigation by Citizen’s Alliance for North Korean Human Rights’ (NKHR) found that the export supply chain is dependent on using enslaved labor of men, women and children in detention camps. This investigation shows that the extractive industries, particularly coal production, are fueled by a ‘pyramid-scheme’ involving political prisoners and citizens being forced to produce quotas of coal and other commodities whilst trapped in a system of slavery. NKHR argues that a full analysis of North Korea’s export supply chain is needed to understand the humanitarian impact of ongoing coal exports.

With the recent global shortages leading Kim Jong Un to call for further investment into electricity and coal production, the use of forced labor is likely to increase in order to meet demand, suggesting a bleak future for the citizens of North Korea. The DPRK continues to ignore sanctions in order to fund the development of their ballistic missiles, at a great humanitarian cost, whilst China continues to ignore international sanctions and North Korea’s human rights violations, in return for cheap coal.

Pyongyang Papers will continue to highlight countries and companies enabling sanction violations – as always please get in touch if you have any information that may help us.

Unfortunately, here at Pyongyang Papers we have come to expect to hear of the DPRK and its co-conspirators committing acts of a brutal, inhumane and cold-blooded nature and today we report on another. No nation, human or animal is safe from unwillingly contributing to the DPRK and its ever-growing money pot for weapons of mass destruction.

In this case the DPRK have teamed up with there usual partner in crime, China, to facilitate the illegal sale of rhino horn and violate UN sanctions.

Rhino horn – Big business on the black market

Rhino horn is big business for the Chinese and Vietnamese market places, used in some cultures as ‘traditional’ medicine, ornaments, or simply a ‘status symbol’ to demonstrate wealth. Poachers kill rhinos for their horns which are bought and sold on the black market- the value for this commodity ranging between $60,000 and $65,000 per kg (the same value as gold) with an average rhino horn weighing between 1-3kg each.

Between 2009 and 2018, 11000kg of illegally harvested rhino horn was seized, with South Africa contributing nearly 3000kg and Mozambique over 1000kg; the value of which on today’s black market is between $660 and $715 million.

rhino horn
Poachers killed this black rhinoceros for its horn with high-caliber bullets at a water hole in South Africa’s Hluhluwe-Imfolozi Park.

Pyongyang Papers have been tipped off that Yun Kil, an officer at DPRK Embassy South Africa based in Pretoria, is looking to sell $65 million of rhino horn to Shanghai Pharmaceutical Holding Con., Ltd, China from a South African supplier. The deal is via a Mozambican national named Avelino Antonio Nhantumbo. Nhantumbo was believed to be involved in a joint fishing venture with North Korea previously that was was shut down. Clearly he has not learnt from his previous illegal activity!

Although the rhino horn may have been sourced legally, requiring permits from both seller and buyer, international trade is not permitted under CITES regulations. CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora) is a multilateral treaty to protect endangered plants and animals, located in Geneva, Switzerland. the international trade in rhino horn has been banned since 1977.

Due to poaching and habitat loss rhinoceroses are now considered a critically endangered species with less than 30,000 rhinos living in wild today. Unfortunately, the scarcity and decreasing availability of rhino horn only continues to increase its value, and therefore the demand for it.

This isn’t the first time the DPRK has been caught in the illicit sale of African wildlife; Pyongyang Papers has previously reported on two North Korean diplomats arrested and detained in 2016 for smuggling multiple kilos of rhino horn. There are further reports from 2019, revealing that North Korean diplomats have continued to engage in smuggling rhino horn out of South Africa, despite the risk of being detained.

Hypersonic gliding missile

The commission for the deal undertaken between Yun Kil and Shanghai Pharmaceutical Holding Con., Ltd will amount to a multi-million USD pay-out which will be claimed by the DPRK regime and likely to fund its ballistic weapons program.

Despite UN sanctions, North Korea continue to advance its nuclear arms weapons technology. In September 2021, North Korea successfully tested a new hypersonic gliding missile. State media, Korean Central News Agency reported the launch was of ‘great strategic significance’ as the North seeks to increase its defense capabilities ‘thousand-fold’.

Hypersonic missiles move much faster and more agile than standard ones, making them much harder for missile defense systems- on which the U.S. is spending billions- to intercept.

It comes as no surprise, as Kim Jong Un announced his intention to develop more weapons and increase the country’s military capabilities at the Workers’ Party Eighth Congress in January 2021.

The launch took place less than an hour before North Korea’s UN envoy, Kim Song, addressed the UN’s annual meeting in New York. Kim told the UN that Pyongyang had a, ‘righteous right to self-defense’, and therefore implying a right to develop weapons.

North Korea has increased the pace of their missile testing in 2022, launching a total of nine so far. January saw a record number of such tests, with at least seven launches during the month including a hypersonic missile.

It seems clear that leader Kim Jong Un has no intention of slowing down North Korea’s production of weapons of mass destruction, despite the US’s pleas for peace talks. Here at Pyongyang papers we ask- what will it take for the Kim dynasty to end their tyrannical rule spanning more than 7 decades, and free all the innocent parties who are suffering at the hands of this regime?

It has been widely reported that the DPRK enforced strict border closures throughout 2020 and 2021 to stop the spread of COVID-19. Unsurprisingly this severely impacted trade opportunities, especially with China. China is North Korea’s biggest partner in both legal and illegal trade. In 2020, China’s reported trade with North Korea was down 80% from the previous year. Whilst the North Korean regime has maintained some level of income by violating sanctions through ship-to-ship transfers of oil and continuing to export tons of coal, it is clear that a strict border lock-down has resulted in devastating economic consequences.

South Korean outlet “Seoul Pyongyang News” recently reported shipping activity resumed between China and North Korea during the summer of 2021, according to their sources in bordering China cities. The Port State Control Committee of the Asia-Pacific have also released data indicating several North Korean ships have been seen entering various Chinese ports, signifying an increase in trade between the neighbors as well as a blatant disregard for ongoing sanctions.

Sanction evasion

Over the past few years North Korea’s efforts to evade sanctions have only increased. A recent Panel of Experts investigation has described ongoing illicit imports and exports carried out under cover of foreign flagged ships with obscured origins, but the latest data showing North Korean ships in Chinese ports suggests both nations no longer feel the need to hide the illegal activity.

The North Korean ships largely come from Nampo, a city in South Pyongan on the banks of the Taedong River. Nampo Port is a known hub for illegal activity, with satellite imagery released in the UN Panel of Experts report highlighting continuous use of the port to evade sanctions including carrying out illegal ship-to-ship transfers of oil as well as loading exports including coal.

A Pyongyang Papers investigation has also discovered that a North Korean trading corporation known as Korea Kumgangsan Trading Corporation, is planning to export 5,000 metric tons of graphite per month to a Chinese corporation called Dandong Earth Science and Technology Co., Ltd. The graphite is due to be loaded from Nampo Port.

Dandong Earth Science and Technology Co., Ltd, also known as 丹东大地科技有限公司 in Chinese, is located in Dandong, China’s largest border city, directly across the Yulu river from the North Korean city of Sinuiju. The company is represented by Mr Shen Guochun (沈国春) with an office adjacent to the Sino-Korean Friendship Bridge. Dandong is a prime location for ongoing trade with the DPRK and was the focus of heavy investment prior to the pandemic. Dandong Earth Science and Technology Co., Ltd. are so shameless about their activity with North Korea that company profile online even states “Since its establishment, the company has given full play to its regional advantages and vigorously developed its import and export trade with North Korea.” (translated from Chinese).

Location of Dandong Earth Science and Technology Co., Ltd. taken from business listing website
Street view of Dandong Earth Science and Technology Co., Ltd. office location

Graphite Demand

Graphite is required for lithium-ion battery production and there is no substitute for it. It is also a good conductor of heat and electricity and so is therefore useful in electronic products. Global demand for graphite has been growing by over 20% a year, fueled by the constant production of cell phones, cameras and laptops. The mounting worldwide focus on electric vehicles and renewable energy means that demand will only increase further. A report by the World Bank Group predicts almost 500% rise in graphite supply would be needed by 2050, in the shift to a ‘low-carbon future’.

North Korea is no stranger to the graphite industry, exporting $4.65m in graphite in 2018, making it the 16th largest exporter of graphite in the world. China is also a big player in the industry, having been the largest producer and exporter of flake graphite for decades. Recently China has been importing more graphite, increasing imports by 22% between July 2020 and July 2021. China has a long record of circumventing sanctions in order to trade with North Korea, so illegal graphite imports will undoubtedly continue to rise as global demand surges along with trade routes reopening following the pandemic.

Where does the money go?

The high demand for graphite naturally leads to high prices- in 2019, the global price of graphite was $690 per metric ton, and prices have only increased since then thanks to new rounds of Chinese environmental inspections, demand growth and plant closures during the pandemic.

Sadly, it is unlikely the substantial income from illegal graphite exports will be used to help feed the North Korean population, who have been hit hard by border closures and food shortages. Kim Jong Un told citizens to prepare for another ‘Arduous March’ indicating the potential for another famine similar to that of the 1990’s, which killed up to 10% of the population. Despite this clear economic hardship, recent displays of military developments such as ballistic missile tests show that the North Korean regime is still funneling money towards the development of its weapons program whilst letting the citizens of North Korea starve! If you have any information regarding North Korean sanction evasion, please get in touch.

Whether working to smuggle luxury goods, refined petroleum, or its most lucrative export – coalthe DPRK’s maritime vessels have been a key component in the states notorious sanction evasion activities for years. Pyongyang Papers recently investigated a deal involving the sale of sand, dredged from the North Korean Yalu river, to its long established ally China. After further research by Pyongyang Papers, it seems the North Korean regime have been funding their nuclear and ballistic weapons program by selling sand for some time and on an immense scale!

C4ADS Expose

Between March and August 2019, Washington based think tank C4ADs tracked hundreds of vessels that were suspected of dredging sand in Haeju Bay before transporting it to China. These shipments involved at least one million tons of sand and were worth at least $22 million. C4ADS stated that the activity in Haeju demonstrates scale, and a level of sophistication unlike other known cases of north Korean sanctions evasion at sea. Providing renewed evidence of the DPRk’s evolving abilities to coordinate and execute complex operations with facilitators abroad.

When questioned by the UN Panel of Experts on its involvement in C4ADs’s expose, China responded that it attached great importance to the clues provided by the panel in relation to the smuggling of sand originating in the DPRK. However, unsurprisingly, the Chinese side could not trace the related vessels voyage a was unable to confirm that the sand had been transported to Chinese ports.

Despite China’s continued insistence of being an upstanding member of the UN in support of North Korean sanctions, their actions continue to suggest that this is not the case. Our sources have informed us of two further Chinese companies who are the recipients of illegally-sourced sand from the DPRK’s Yalu river.

Mining Agreement

Our sources have informed us that North Korean company Kwangyong Trading Corporation have facilitated a 10-year sand mining agreement with China Liaoning material Import and Export Co. Ltd, (辽宁鑫之烨物资进出口有限公司). This agreement is a blatant violation of the United Nations Security Council resolution 2397 (2017), which prohibits the sale of earth and stone (including sand) by North Korea. According to business listings China Liaoning was established in December 2020 and appears to have quickly moved onto illegal activity. The company is managed by Xie Zongxuan (谢宗烜) with its headquarters registered in Benxi City, Liaoning Province, around 100km from the North Korean border!

Modern civilization is built on different types of sand. Its a key ingredient in concrete, glass and the processors that power electronic devices. Approximately 50 billion tons of sand is consumed globally each year. More than any other natural resource on the planet except water. As the global leaders in construction, it is not surprising that China are in the market for sand supply deals of a long lasting nature.

Vessel Violations

The Yalu river is situated on the North Korea/China border between the cities of Sinuiju and Dandong. The river is the longest waterway on the Korea peninsula, measuring 795km, and so acts as a great source of sand for the North Koreans to mine and sell. The first entrance to the Yalu river is located near the southern section of Pidan-som island.

The Yalu river, situated on the North Korea/China border between the cities of Sinuiju and Dandong

A second Chinese company, China Hunchun Longchao Trading Co. Ltd, are also looking to enter into illicit sand dredging deals by partnering with a DPRK company named Jinmyong Trading Corporation, This wouldn’t be the first time Jinmyong Trading Corporation has been involved in sanctions breaking activity alongside China. The 2021 midterm panel of Experts report states that the DPRK acquired a vessel named the the Ming Zhou (IMO 8829878) following a joint venture involving Jinmyong Trading Corporation. This violates UN resolutions that prohibit the direct or indirect supply, sale or transfer of vessels old and new to the DPRK. despite this, the oppressive state has continued to expand its fleet through the addition of former foreign flagged tankers and cargo vessels since 2019.

Our sources have confirmed that the North Korean government notified the Chinese government of the two companies cooperation on the project!

China’s Lies

Pyongyang papers finds it ridiculous that China continues to deny any involvement or wrongdoing in sanctions breaking activity, when clearly this couldn’t be further from the truth. By undermining the sanctions and continuing to trade with North Korea, China is effectively funding the Kim regimes nuclear weapons program and completely disregarding the illegal, immoral and dangerous practices taken to do so. Pyongyang Papers believes that these deals may just be a tiny fraction of the activity currently taking place on the Yalu river. As always, if you have any information regarding sanctions evasion and North Korea, please get in touch.

As seen many times recently, North Korea is continuing to develop and test missiles at an alarming rate. If the money that funds DPRK’s nuclear weapons program is not arriving through legitimate means, it will be no surprise to anyone interested in North Korea that King Jong Un will look at other options to generate revenue. Even if this means breaking sanctions! Pyongyang Papers would also argue that there are no legitimate means to fund a nuclear weapons program. In October 2020 a teary Kim Jong Un conceded that the country’s economy was struggling by admitting that previous five year economic plan had failed. If only Kim Jong Un cared as much about North Korean citizens at home and abroad as he does his economic plans.

Kim Jong Un at the parade marking the 75th anniversary of the Workers' Part of Korea in October 2020
Kim Jong Un at the parade marking the 75th anniversary of the Workers’ Part of Korea in October 2020

North Korean Economy & Africa

What does this mean for North Korea? It has been reported that the DPRK would require practical means of innovation that would bring about realistic change and substantial progress to improve the North Korean economy. For the regime, it seems that innovation is the term for finding new ways to break international sanctions. Pyongyang Papers has continued to investigate methods used by North Korea to raise funds for the DPRK regime in Africa.

As mentioned previously, North Korea has a long history with many African countries. one of these countries in Guinea, who have had an established relationship with North Korea since 1958. It seems that relationship is still very productive. A source recently informed us that the Guinean minister of Security and Civil Protection and the Central Director of the Border Police issued visas to 14 workers from a DPRK construction company called South South Technology Cooperation Company, also known as Nam Nam. All 14 workers flew into Conakry, Guinea from another African country Niger.

It appears that key Guinean officials are working with the DPRK to avoid sanctions. yet while North Korea supplies construction workers to other countries, it neglects its own essential needs. For example, the original deadline for the construction and opening of the new healthcare facility Pyongyang General Hospital has passed by more than a year! North Korea closed its borders completely with the threat of COVID-19 looming in February 2020. Reports suggest this is having a major effect on medical supplies and the ability for the countries stretched healthcare system to cope with any medical outbreak. There may be some potential hope for ordinary North Korean citizen with the recent sanctions exemptions granted on medical grounds. With the hospital and other major construction projects unfinished or unopened and Kim Jong Un openly declaring economic struggles, an even harder future for North Korean citizens looks likely. Its own people are being sacrificed in what appears to be a deal to allow the regime to fund its weapons programs.

Kim Jong Un visiting the site for the new Pyongyang General Hospital
Kim Jong Un visiting the site for the new Pyongyang General Hospital

Military and the Population

Given that the DPRK is reported to spend up to 24% of its GDP on military advancement, it would suggest that the regimes priorities are very wrong. Especially when the population only get to see these funds through elaborate weapons displays. What use is a military if the economy is so decimated that there is nothing worth protecting? With a failing internal economy and the world watching how it adheres to international sanctions, it no surprise that North Korea seeks more discrete avenues to build its bank accounts. Perhaps Niger & Guinea, both members of the UN, provide a safe place for the illicit revenue generation.

Guinea and Niger

It seems that nothing has changed since our previous article about North Korean construction activity in Africa. Pyongyang papers has also discovered that a DPRK construction company Korea Chinson Cooperation Corporation are unlikely to honor a road building contract with the Niger Wazir Company to their embarrassment. Pyongyang Papers did some additional digging to find out why and it appears that the postponed arrival of North Korean workers to Niger due to COVID-19 and Kim Jung Un closing the borders may be the reason. However, there may be a way that Chinson can rescue the deal. Pyongyang papers believes that Chinson have requested that the workers recently sent to Guinea, mentioned above, be sent back to Niger so Chinson can save their reputation and future contracts. As always we will continue to investigate and see if the construction workers are sent back to Niger.

Niger and Guinea are working with the DPRK in yet another breach of international sanctions. Pyongyang may be without a working hospital facility but workers can be sent around the world to generate revenue, even during a global pandemic. The DPRK regime clearly have very different priorities to what their citizens need. As we have seen before, if North Korea continues to put weapons development above a functional medical system then Pyongyang Papers fears the ordinary citizens will never get the future they deserve.

If you have any information about DPRK sanctions evasion and illicit activity, please get in touch with Pyongyang Papers.

It is well documented that the DPRK regime and its associates across the world use ever changing methods to evade sanctions imposed on the hermit state in pursuit of its nuclear and ballistic weapons program. Although not a new practice, Pyongyang Papers has been looking at the use of shell companies to disguise business links with the DPRK.

Shell companies

A shell corporation is a corporation without active business operations or significant assets and although they are legal in principle, they can often be used illegitimately and for criminal intent. Setting up a Shell company is relatively easy as it does not often require identification or paperwork- perfect when dealing with the DPRK! Shell companies are also comparatively cheap to create, so can be used as a simple and efficient way to hide the ‘parent’ company and therefore save a business reputation and scrutiny from the authorities.

Shell companies are widely used to disguise DPRK associated business with the purpose of raising funds for the prohibited nuclear and ballistic missile programs.

Cheng Chiun Shipping Agency

Pyongyang Papers has been investigating one such company- Cheng Chiun Shipping Agency (CCSA). This company has created a number of shell companies in an attempt to obfuscate their impending oil purchases and shipments to the DPRK. These shell companies, called: Jaguar Trading Corp., Everway Global Ltd., and Galaxy Trading Corp have themselves joined forces to create a Hong Kong registered company- Hong Yao International Trade Co., Ltd. This further muddies the already murky waters of shell companies with added additional complications to our investigation.

So, what is Hong Yao International Trade Co., Ltd up to? Pyongyang Papers has been informed that the company has teamed up with Wintak Petrochemical Group Ltd., and Hang Yao International Trade Co., Ltd are working together to supply between 8,000 and 24,000 metric tons of oil per month, to the DPRK, which contravenes United Nations Security Council Resolution ( UNSCR) 2397.

UNSCR 2397 limits the DPRK’s imports of refined petroleum to 500,000 barrels for a 12-month period effective from 1 January 2018, all of which need to be logged and reported. A recent report by RUSI, indicates that Nampo- the country’s main port- between May and November have likely breached the annual petroleum import-cap, despite the borders being closed for extended periods due to the COVID-19 pandemic.

Companies & Ships

Hong Yao recent dealings include working with an individual named Hsiao Tsung-han, Tsung-han is the ship controller of Palau-flagged “Sky Venus” (IMO: 9168257). This tanker has sailed under multiple different names previously and is being used by Hong Yao International Trade Co., Ltd to transport the cargo oil from Taichung Oil Depot, Taiwan. The storage at the port is administered by Wintak. The “Sky Venus” heads north from the port to rendezvous with, and transfer her shipment via ship to ship transfer to the Cook Island-flagged tanker “Hai Jun” (IMO:9054896) that previously sailed under the name MITOYO MARU.

Through our investigation, we understand that CCSA have recently passed ownership of Sky Venus (IMO:9168257) between two of its shell companies, Ocean Energy International Corp. have sold the vessel to a company Wills International Co., Ltd. You may remember that Wills International Co., Ltd. previously appeared in our article about the Panama flagged vessel “SUNWARD“. Was this used to hide the connection between the companies and vessels? Pyongyang Papers wonders if there are may be more going on here?

The “New Konk” (IMO:9036387)

To obfuscate illicit activity further “Hai Jun” transferred the oil to a tanker named “New Konk” (IMO:9036387). The New Konk is not a NK registered vessel but has been identified by the UN PoE as a ship to ship transfer vessel with the PoE recommending the ship to be banned from any UN designation port. She was de-registered from the Sierra Leone flag registry in October 2019 so therefore now ‘flag-less’.

After receiving the cargo, New Konk met with and transferred her shipment to North Korean flagged “Yu Son” and “Kum Jin Gang 3”. These vessels would travel the final leg of the journey back to the DPRK. Much like the use of shell companies, deceptive shipping practices involving swapping vessel identities is just another method used by the DPRK and its accomplices to try and mask their sanction breaking activities. The UN PoE report details how the New Konk has also been involved in these activities, sailing under a different name and transmitted a fraudulent maritime mobile service identity number at some time in 2020.

The bank of Kim Jong Un

This investigation started with Pyongyang Papers looking into the setting-up of a Shell companies and the reasons behind their creation but quickly led to an investigation involving a number of individuals and entities supplying the DPRK and ultimately contributing to the funding of the nuclear and ballistic weapons program.

Pyongyang Papers have reported on six shell companies associated with this company or any other DPRK entity that are acting as a facilitator for the bank of Kim Jong Un, or indeed any other sanctioned activity, please get in touch.

The totalitarian state of North Korea is renowned for conducting illicit activities and trade deals in order to continue funding its ballistic and nuclear weapons program, often with the assistance of neighboring countries who are looking to make a quick profit despite UN sanctions. Pyongyang Papers has investigated the DPRK’s involvement in a range of illicit activities including coal exports, wildlife trafficking, import of luxury goods and overseas workers. Our latest investigation looks at a river sand contract worth up to $10 million between the DPRK and its favorite trading partner, China.

Why sand?

Sand is one of the most important commodities in the world with the smallest appreciation space. Sand is very commonly used in construction, often providing bulk, strength and stability to other materials such as asphalt, concrete, mortar, render, cement and creed. It is the most consumed raw material besides water and is needed to build roads, bridges and trains.

The sand that covers the world’s deserts is too fine to use in construction because it doesn’t bind well. River sand is typically the best for making cement- which is where North Korea come into play.

Pyongyang has seemingly cashed in on the sand trade for many years. In previous years, when North and South Korea did significant business together, sand was Pyongyang’s most valuable export to its southern neighbor, according to media reports at the time. North Korea sold $73.35 million worth of sand to the Republic of Korea in 2008, though South Korea stopped buying North Korean sand shortly after.

But there’s an even more important customer bordering North Korea: China. China is the world’s largest consumer of sand, accounting for about half of the world’s total, with an annual consumption of up to 20 billion tons.

During the 2010’s, the country underwent a construction boom unprecedented in world history- Beijing used more concrete between 2011 and 2013 than the United States did in the entire 20th century.

Tan Wee Beng

North Korea is banned from exporting earth and stone under the United Nations sanctions passed in December 2017.

However, here at Pyongyang Papers we believe that DPRK-controlled, Singapore-registered Singapore Morgan Marcos Co., LTD is involved in a sanction-breaking deal involving the export of sand to China.

This wouldn’t be the first time that Morgan Marcos Co., LTD has been involved in dodgy dealings with the DPRK.

Morgan Marcos Pte. Ltd. is an Exempt Private Company Limited by Shares, incorporated on 22 January 2008 in Singapore. The address of the companies registered office is at the WEE TIONG BUILDING. The Company’s current operating status is live and has been operating for 14 years. The Company’s principal activity is collective portfolio investment funds with rental income.

Morgan Marcos Pte LTD is the sister company to commodity trading company Wee Tiong (S) Pte Ltd to whom Tan Wee Beng is the managing director and shareholder, along with his other business WT Marine.

Tan Wee Beng, a 44 year old Singaporean who also goes by the names “WB” and “Marcus Tan”, is described as a prominent young executive with a taste for expensive sports cars. However, that’s isn’t all he’s known for, you can also find Beng on the United States’ Federal Bureau of Investigation’s (FBI) most wanted list for money laundering and violating the International Emergency Economic Powers Act (IEEPA) by doing business with North Korea.

During October 2021, Beng was fined $210,000 by a Singapore Court for falsifying invoices linked to business in North Korea. According to the Singaporean police department, Wee Tiong (S) Pte Ltd sold sugar and other goods to two persons from the DPRK through their respective companies prior to 2017, with payments made to Wee Tiong (S) Pte Ltd and its related company, Morgan Marcos Pte Ltd.

Tan Wee Beng wanted by FBI

Investigations by the Commercial Affairs Department revealed that between November 2016 and October 2017, Tan Wee Beng received queries from two banks about deposits made to Wee Tiong (S) Pte Ltd and Morgan Marcos Pte Ltd. These deposits were payments for sales of goods to the DPRK persons. Although these deals were made prior to the UN sanctions embargo, Tan Wee Beng was concerned that the banks would terminate their relationship with the companies if either bank found out that Wee Tiong (S) Pte Ltd had transacted with entities linked to the DPRK.

To conceal this from the banks, Tan Wee Beng falsified the invoice of both companies. The names of the end buyers, and in some cases, the destination ports on these invoices, were changed to remove any links to the DPRK. Tan Wee Beng then signed the false invoices and submitted them to the banks, which ultimately resulted in money laundering charges.

Yalu River

It seems despite recent trouble with law enforcement, our sources inform us that a deal involving Morgan Marcos Co., Ltd sees 5 million cubic meters of river sand from the Yalu river destined for Chinese waters, which is in complete violation of UN sanctions.

The Yalu River, known by Koreans as the “Amrok River” or “Amrok Ocean”, is a river that separates the North Korean town of Sinuiju from China’ border in Dandong.

Daily NK reported in April how the economic hardship caused by the COVID-19 pandemic seemed to be easing in North Korea, as North Korean ships were spotted back on the Yalu River collecting sand. Pyongyang Papers wonders if this sand being collected was in fact to be sold via illicit transactions to further fund their deadly weapons?

It seems that DPRK medical staff are still trading in Africa, this time in Ghana! Partnerships have been formed between Ghanaian & DPRK countries with the knowledge of the Ghanaian Government. Specifically, the Ghanaian Ministry of Health, who are aware of the illicit dealings.

The long-standing relationships between North Korea and many African countries is well known. From the Zimbabwean leader Mugabe sending gifts of live rhinos to Pyongyang, to Uganda’s Museveni learning Korean from Kim Jong Un’s grandfather. Over time, these relationships seem to have grown with North Korea providing weapons, soldiers, labor and completing ambitious construction projects for many African countries.

The recent United Nations Panel of Experts report notes that there is a significant and ongoing financial activity related to the illicit labor networks in sub-Saharan Africa. It’s clear the DPRK haven’t learnt a lesson from the imposed sanctions! There has been an extremely high number of African countries reporting late to the UN or not at all. This is despite sanctions and an obligation to report effects to enforce them. The reasons behind this may be innocent but it seems likely that it is down to the difficulty in hiding these exchanges that continue to exist between Africa and the DPRK. As of 2016, only 15 percent of African UN members were complying with reporting requirements so the UN investigated the possible sanctions violations by 7 African countries.

DPRK workers in Ghana

While investigating DPRK workers in Africa, Pyongyang Papers has found information surrounding a partnership between Ghana and the DPRK. While countries like Angola cooperated with the UN sanctions and repatriated 296 DPRK nationals, Ghana seem to be aware of and is encouraging sanctions breaking behavior. Given that Ghana and the DPRK have maintained diplomatic relations since 1964 it is hardly surprising that the countries are willing to work together to avoid sanctions!

Pyongyang Papers has discovered that a partnership has been agreed between Buhung Traditional Medical Centre, which lists Ri So’ng il as its director and the Prestige Herbal Clinic. The Prestige Herbal Clinic based in the Amasaman area of Accra, Ghana and offers alternative medicinal treatment for a range of ailments using herbal, massage and detoxification techniques. The CEO is listed as Mr Van Klu and Prestige Herbal Clinic claim to have access to specialist herbal practitioners with years of experience and in-house laboratory. Pyongyang Papers contacted Prestige Herbal Clinic for comment, at the time of publication we had not received a response.

The Prestige Herbal Clinic based in the Amasaman area of Accra, Ghana

Pyongyang Papers has also been informed that Pak Kwang-hyo’k, a representative of the DPRK Korea Moranbong Medical Cooperation Centre was involved in brokering the deal with the knowledge of the Ghanaian Ministry of Health. Pyongyang papers has come across the Moranbong Medical Cooperation Centre previously when investigating DPRK doctors in Africa.

As Pyongyang Papers has previously highlighted, there have been many issues with north Korean medical staff working in Africa. These low paid and sometimes poorly trained medical staff from the DPRK have been involved in incidents of malpractice and even subjecting patients to illegal procedures. The humanitarian situation in the DPRK is dire and does not seem to be getting better. The most recent Panel of Experts report claims that the DPRK prioritizes the regime over national priorities that include food security, health and medical services. Instead of addressing the problems in their own county the DPRK is sending its medical staff to other countries and aiding them. Ghana owns one of the most developed medical and healthcare systems in Africa… Pyongyang papers wants to know why is Ghana hiring DPRK medical staff if they are already capable?

The future of sanctions evasion

There would be implications on Ghana, and other African countries if they don’t comply with the sanctions imposed on North Korea. If other UN member states decide that African countries are not enforcing sanctions on DPRK, could their aid and other economic support be re-evaluated? The unilateral backing of the sanctions against DPRK is important to make sure they discourage the regime which is still engaging in human rights violations, ignoring their citizens in desperate need of basic provisions and actively pursuing nuclear programs with money earned abroad illicitly.

If you have any information relating to sanctions evasion by the DPRK then please contact Pyongyang Papers!