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!

Diplomatic relations between the Soviet Union (the predecessor state to the Russian Federation) and North Korea date back to 1948, shortly after the Democratic People’s Republic of Korea was proclaimed. The relationship between the two countries continued even after the fall of the Soviet Union, with it gaining further importance when Vladimir Putin was elected President of Russia in 2000.

In the late 1940s, roughly 9,000 North Korean migrant workers were recruited by the Soviet government to work in state-owned fisheries on Sakhalin, with a further 25,000 workers following suit in the 1950s. A secret agreement between country rulers (Leonid Brezhnev and Kim Il Sung) saw a second wave in the 1960s, consisting mainly of criminals or political prisoners. The flow of workers from North Korea to Sakhalin continues to this day, as reported in our previous article.

By the mid-2000s, masses of North Koreans were still entering Russia on work visas to try to escape their poverty-stricken homeland. Often compared to slave labor by outsiders due to the relentless working hours and poor living conditions, on the contrary North Koreans view the chance to work in Russia as a lifeline for both themselves and their families.

Kim Jong Un and Vladimir Putin meet for the first time in 2019 in Vladivostock

Slave labor?

According to Russia’s labor ministry, North Koreans are paid on average $415 per month, 40% less than the average salary in Russia. With recent reports suggesting a sudden hike, up to 70% of these wages earned by the workers are reportedly seized as ‘loyalty payments’ by the regime, to help prop up the government and its falling economy. This leaves the workers with even less money than usual to cover their living costs and to help support their families back home. However, due to the prestige and limited opportunity for North Korean citizens to improve their quality of life in the DPRK, it is impossible to find a job in Russia without paying a bribe, meaning it is often the more affluent Pyongyang citizens who get the opportunities to work overseas, with the underprivileged remaining poor with no means to better their future.

According to Ministry of Labor statistics, more than 85% of North Korean migrants work in construction. The rest are involved in a range of jobs from garment wok and agriculture, to logging, catering and traditional medicine.

Sanction evasion

However, Kin Jong Un’s persistent refusal to stop its nuclear testing program resulted in enforced UN International sanctions in September 2017 ensuing an embargo on the use of North Korean labor.

Unsurprisingly, in recent years Moscow and Beijing have appealed unsuccessfully to the member states of the UN to overturn the sanctions, in the hope to reignite the steady flow of migrant workers into both countries. Russia admitted missing the repatriation deadline, and here at Pyongyang Papers we know that Moscow’s claims of complying with the embargo are not wholly true- instead North Koreans continue to enter Russia to work via a loophole.

As North Korean’s on worker’s visas leave Russia, more enter on tourism and education visas, which aren’t banned by sanctions. During the first 9 months of 2019, 12834 tourist visas and 7162 student visas were issued to North Koreans, each rising about six-fold and three-fold respectively from a year earlier, according to Russian government data. With experts concluding that many of these visitors are likely working in Russia.

Students or construction workers?

A recent Pyongyang Papers investigation has revealed that a Moscow-based construction company was planning on receiving at least 100 student trainees to work on Moscow build projects.

BS Installation, LLC was founded in 2017 as a construction company with many projects under its belt. Also, plans are being discussed on sending student trainees to work on Moscow build projects for practical training.

Pyongyang Papers believes that Pyongyang will select the first group of 100 student trainees to arrive in Russia to work on projects in and around the Moscow area, following agreement between Russia’s SitiStroyProyekt, LLC, (СитиСтройПроект) an architectural planning company whose activities consist of engineering design and construction project management based in St Petersburg, and DPRK General Construction Company “Pyongyang” (Pyongyang). The agreement is believed to last until mid-2023.

Pyongyang Papers understand that this is based on a 2007 agreement between Russia and North Korea for temporary labor of the citizens of one government in the territory of the other to improve North Korean students’ professional skills whilst ‘studying’ in Russia.

Turning a blind eye

It seems the DPRK continue to ignore the UN sanctions enforced against them. Possibly partly to fund an ambitious building project under Kim Jong Un’s direction. Kim Jong Un promised in January to alleviate the capital’s housing shortage with 50,000 new homes by the end of 2025, including 10,000 in 2021 at the ruling Korean Workers’ Party.

It appears Russia is trying to turn a blind eye to the North Korean workers that continue to work in their country, but what will become of the regimes ballistic missile plans should we all continue to ignore the DPRK’s actions. Pyongyang Papers pledge to continue to highlight both countries and companies enabling sanction violations- as always please contact us if you have any information.

Despite the UN Security Council imposed sanctions, there is plenty of evidence to suggest that trading and business still happens as usual for the DPRK regime. The United Nations Security Council Panel of Experts reports everything from refined petroleum to military equipment and even foreign alcoholic beverages can be found in a department store in downtown Pyongyang. As shown in our previous article, luxury goods are still managing to make their way into the DPRK through a variety of different methods.

Old Methods Still Used

Individuals trying to avoid sanctions have been seen using clever methods but often quite obvious tactics get these goods across seas and through borders. Pyongyang Papers has written several articles featuring the commonly used methods including ship-to-ship transfers and direct tanker deliveries sailing under foreign flags. The March 2021 Panel of Experts report even notes a recorded instance of a vessel making up to 9 return visits over a six-month period.

Pyongyang Papers has previously investigated DPRK citizens working overseas in different roles to generate funds to support the regime back at home and its nuclear ballistic missiles program. It seems there are no end of individuals who are willing to break sanctions in the pursuit of money. Through Pyongyang Papers sources and our investigations, we can now name a number of individuals that are part of a group involved in breaching sanctions and raising funds for the DPRK regime.

Vessels in use to smuggle to DPRK

A report to Pyongyang Papers has highlighted sanction breaking behavior by a Taiwanese criminal group headed by Huang Chung-wei with money laundering activities headed by husband and wife duo, Chu Hua-sheng and Liu Chung-hsuan. This group has been working with another Taiwanese citizen by the name of “Allen” Yu Ping-yuan to carry out smuggling activities to support the DPRK regime despite UN sanctions.

Chen Shih-huan is also involved with this criminal group using an oil tanker called COURAGEOUS with IMO 8617524, a vessel used to smuggle sanctioned oil cargo to DPRK tankers. The most recent Panel of expert’s report, released in March 2021, details how the unknown-flagged tanker SEA PRIMA (also known as COURAGEOUS) conducted ship-to-ship transfers with designated DPRK tankers in both August and September of 2019. In March 2020, Cambodian authorities detained the SEA PRIMA sailing as the COURAGEOUS.

The Crew members of the COURAGEOUS involved in ship-to-ship transfers with North Korea in violation of UN Sanctions

More recent reports from Mehr News Agency suggest that the United States seized the Singapore owned oil tanker and that the owner Kwek Kee Seng is facing criminal charges of conspiracy to evade economic sanctions on the DPRK along with conspiracy of money laundering. The statement did not say why the charges against Kwek had not been brought more than a year after the ship was seized but added that a New York federal court had entered judgement of forfeiture regarding the vessel.

Pyongyang Papers wonder how the seizure of the COURAGEOUS has affected Huang and his criminal gang?

It isn’t just Taiwan-based individuals and organizations involved. The August 2020 and March 2021 reports show various allegations against countries including the Republic of Korea, Namibia, Nigeria and Guinea. As highlighted in the UN Panel of Experts reports by several non-governmental organizations, the sanctions have no doubt had a negative impact on the civilian population in many ways. One example is the civilians of North Korea have limited agricultural resources such as transportation, machinery, fertilizers, and an overall decreasing food security especially throughout the COVID-19 pandemic. The same goes for the acquisition of coal and petroleum; there are instances of foreign-flagged tanker deliveries being made to DPRK through companies who changed ownership or dissolved just months beforehand in an attempt to confuse or hide the fact that sanctions are being ignored. These products don’t seem to be used for the benefit of the people, but rather to support the industries building ballistic missiles and other weapons.

If you have any information about DPRK sanctions evasion please contact Pyongyang Papers.

Smoking and North Korea go hand in hand. According to a World Health Organization report in 2019, 46.1% of males above the age of 15 smoke tobacco, and the numbers have been high for years.

Tobacco was first introduced in Korea in the early 1600s from Japan, and until around the 1800s, both men and women smoked profusely. Today, smoking is still a frequent and expected activity for North Korean men, yet female smoking is now considered a taboo.

Although it may be unthinkable for females, Pyongyang have no objections with one of its local residents at the capital’s zoo lighting up a cigarette. Azalea (Korean name “Dallae”), a smoking chimpanzee, is the star attraction at the zoo and regularly has citizens roaring with laughter as she puffs away on a pack of cigarettes a day, despite outrage from several animal rights activists. This, another clear display of total disregard towards animal welfare and an appalling attitude towards a deadly habit that unfortunately we have come to expect from the DPRK.

Azalea, as seen in the image below, isn’t the only prominent figure in the DPRK with a cigarette always in hand, North Korean leader Kim Jong Un is regularly photographed smoking on his public outings, despite the many health concerns it entails.

Smoking is a leading cause of death in North Korea, and as of 2010 mortality figures indicated that 34% of men and 22% of women die due to smoking related causes. This is the highest smoking related mortality figures in the world and these figures have only continued to rise.

The numbers are so concerning that Pyongyang introduced the tobacco prohibition law in November 2020. The tobacco prohibition law prevents North Korean’s from smoking in public places and sets out rules to provide a ‘more cultured and hygienic’ environment for citizens. It has also apparently been introduced to tighten the legal and social controls on the production and sale of cigarettes.

We are yet to confirm if Kim Jong Un is leading by example and quitting the tobacco since introducing the prohibition law. However, here at Pyongyang Papers we can confirm that North Korea’s illicit tobacco trade with other member states continues to burn on.

Ryugyong Corporation

Pyongyang Papers have previously investigated the significant role that North Korean cigarette manufacturing company Ryugyong Corporation has played in the DPRK revenue generating machine. It is an arm of the central government, subordinate to the Korea Worker’s Party Finance and Accounting Department (Bureau 125), which handles budgetary and accounting matters for the regime.

Ryugyong Corporation may sit at the heart of the criminal global network but they do not operate alone. Our sources have informed us that Chinese tobacco company Poly Tobacco International Limited and Ryugyong Corporation have conducted business amounting to hundreds of tonnes of tobacco leaves and ancillaries worth millions of dollars. This contravenes the imposed UN Resolution which prohibits the importation and/or facilitation of luxury goods (like tobacco) into North Korea.

Poly Tobacco International Limited used Chang Myo’ng Sik, a Dalian-based representative of the Liaoning Pilot Free Trade Zone Manrong International Trade Co., Ltd as a third-party payee.

Dalian

This is not the first time Dalian (a port city in Northeast China, close to North Korea) has been linked with involvement of the illicit tobacco trade. In 2016, Nikkei Asia published an article which detailed how two shipping containers with cartons of legitimate North Korean cigarettes concealed packs of pirated Marlboro’s. The Manila shipment, seized in October 2013, included 8.79 million counterfeit Marlboro s in 439,000 packs; the shipment in Malta in June 2014 held 8.16 million sticks in 413,999 packs. A source put the street value of the two shipments at $4.2 million to $8.4 million.

According to shipping documents, the sender for both shipments was Dalian based company ‘Sun Moon Star Trading‘.

Naxiades

As previously reported by Pyongyang Papers, Ryugyong has also had dealings with Greek trading house Zafiris Naxiades (ΖΑΦΕΙΡΙΟΣ ΖΑΞΙΑΔΗΣ), based in Thessaloniki. Despite our previous investigation exposing their illegal activity we can confirm Naxiades continues to facilitate the sale of tobacco and flavorings to North Korea.

Pyongyang Papers have been informed Zafiris Naxiades also hosted a North Korean tobacco delegation at the Hotel Panorama in Thessaloniki in October 2019, shown below.

Funding the nukes and the DPRK elites

The regime relies on unlawful activities (such as the manufacture and sale of illegal drugs, counterfeit consumer goods, human trafficking, arms trafficking, wildlife trafficking, counterfeit currency and terrorism) and willing co-conspirators to continue to provide a steady source of income for its nuclear weapon program and to maintain the lifestyle of the countries elite. Clearly the citizens who do not form part of Pyongyang’s elite are not deemed worthy of this funding, as they continue to battle the ongoing humanitarian and health crisis that has plagued North Korea since the early 1900s.

Compared with drugs, smuggling tobacco is low-risk and high reward. The illicit tobacco trade is one of the most lucrative revenue streams for the Kim regime, an industry worth tens of billions of dollars worldwide since the product can be sold without the high taxes that exist in many wealthy countries.

Whilst many North Korean factories appear to have been hit hard by sanctions, it appears the tobacco factories and nuclear weapon funds are still thriving. As always, Pyongyang Papers pledges to continue to expose those who choose to collaborate and profit from the DPRK’s sanction breaking behavior and campaign for the human rights of the oblivious nationals held captive by the relentless Kim dynasty.

North Korea’s continued pursuit of a ballistic nuclear weapon program, along with the UN security council-imposed sanctions it faces, regularly dominates the headlines. This often reduces the focus on the millions of citizens, living in Pyongyang and other neighboring cities, facing a huge humanitarian and health crisis.

The humanitarian and health crisis in North Korea existed long before the COVID-19 pandemic spread around the world. Unfortunately, North Koreans are no stranger to famine having endured a period of mass starvation and economic crisis between 1994 & 1998 known as the ‘Arduous March’ or the ‘March of suffering’. Estimates vary hugely but between 240,000 and 3,500,000 North Koreans died of starvation and malnutrition due to a number of factors including economic mismanagement and poor decision making from the regime. More recently, North Korean leader Kim Jong Un reacted to the COVID-19 pandemic with immediate border closures, preventing the import of food and medicine which has further intensified the current crisis. An increased number of citizens begging for food, a rise in homelessness and desperate need for antibiotics and medicine puts the North Korean economy on the brink of recession according to Jiro Ishimaru from Asia Press.

Children photographed in an orphanage in North Korea during the 1997 famine.

Pyongyang and Beijing

Beijing has been North Korea’s closest foreign ally since the fall of the Soviet Union, with China often accused by other UN member states of stalling and persistently discrediting the accusations of the DPRK’s continued efforts to violate UN Security Council resolutions. However, the DPRK’s trade with China shrank by approximately 80% in 2020 after the nation sealed its borders.

Not only has the pandemic disrupted the relationship between Pyongyang and Beijing, recent reports of a high level North Korean official dying after being given a Chinese-made injection has strained the relationship further. Kim Jong Un reportedly became very angry after learning about the incident and has banned the use of all Chinese medicines at major hospitals in Pyongyang, including Chinese made COVID-19 vaccines.

This isn’t the first time that the regime has had to adopt this extreme stance, in 2005 the government demanded a directed crackdown to try and eradicate the illegal medical practices of retired DPRK doctors using medicine and equipment smuggled from China. Orders were given to each municipal and provincial procurator office to “eradicate private doctors” and to “actively control profit-making anti-socialistic activities by the doctors who must care for the people’s health”.

Healthcare in the DPRK and abroad

Pyongyang Papers have reported before on the failing healthcare system in the DPRK. Despite their claims of offering free national medical service and health insurance to all citizens, many defectors and refugees have revealed that this in fact only applies to the uppermost classes citizens who often come from a long lineage of people devoted to the socialist regime.

The majority of citizens instead must pay for medical procedures along with the equipment and medications needed alongside it. Due to the fact state-run hospitals are so expensive and unreliable, many North Korean’s instead turn to the cheaper option of doctors and surgeons who practice illegally and discreetly in their own homes.

Death by dangerous practice

Although the uppermost class may receive free healthcare, the standard of medical practice received from DPRK doctors is poor. Unfortunately, the death of a high-level North Korean mentioned above is not the first of its kind. There have been other reports of death caused by North Korean doctors practicing medicine illegally both in the DPRK and abroad.

Even though the North Korean health care system may be crumbling due to a lack or resources including medicines and basic medical equipment, this does not stop the regime from sending North Korean doctors overseas to generate much needed income to aid its ballistic nuclear weapons program. One of the countries that has North Korean doctors present is the Republic of Congo.

Information has been forwarded to Pyongyang Papers from a contact within the Republic of Congo that two DPRK doctors have been arrested and charged with illegal practice of medicine and manslaughter. The contact informed us that the Doctors were from Korea Moranbong Medical Cooperation Centre (Moranbong) and working in the Republic of Congo. A Republic of Congo based representative has so far failed to get the two doctors released.

The fate of the doctors is yet to be determined- but the future of the DPRK’s economy, humanitarian and healthcare crisis looks bleak as the regime continues to prioritize its own aims ahead of the needs of North Korean citizens wo continue to suffer.

If you have any information on illicit DPRK activity, please get in touch.

Since 2017 the United Nations has listed coal amongst the goods and services sanctioned against North Korea as shown in our previous article. The security council declared that the “DPRK shall not supply, sell or transfer, directly or indirectly from its territory any coal”. The resolutions go on to say “all states shall prohibit the procurement of such material from the DPRK”.

Despite UN sanctions, trade in coal continued to be a huge revenue generator for the regime, with the DPRK continuing to export the coal illegally via deceptive maritime practices such as ship to ship transfers. This trade contributes vast sums of money to aid the DPRK regime in its proliferation of prohibited nuclear and ballistic missile program. Coal is North Korea major export and foreign currency earner with most of North Korea’s coal being 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.

Due to the worldwide COVID-19 pandemic, North Korea shut its borders in early 2020, resulting in a decrease in trade of up to 81%. However, it has been reported that trade between North Korea and China has resumed as of April 2021, with no doubt coal being a priority for the DPRK.

Chinese Involvement

Pyongyang papers has been investigating Chinese involvement in helping break sanctions against North Korea for some time. In 2016 police in China announced a criminal investigation into Chinese company that conducts extensive trade with North Korea. During this investigation Chinese authorities discovered that for a long time a company named Dandong Hongxiang Industrial Development Co. Ltd. engaged is suspected economic crimes during trading activities.

Dandong is the largest Chinese border city and located on the western border of North Korea, facing Sinuiju, North Korea, with the two cities connected by the Sino-Korean friendship bridge along with rail links to Shenyang and Sinuiju. Dandong Hongxiang Industrial Development operates the commodity distribution business and has a number of front companies associated with it. Dandong Hongxiang was sanctioned by the US in September 2016 and Dandong Hongxiang personnel were indicted by the US on sanctions evasion charges in June 2019. It appears that the head of Dandong Hongxiang, Ma Xiaohong, and a number of her colleagues were accused of violating the international Emergency Economic Powers Act on a conspiracy to defraud the United States and launder money. According to the indictment, Dandong Hongxiang is a Chinese company whose core business was trade with North Korea, and had at its disposal at least 20 front companies to obscure illicit financial dealings on behalf of sanctioned DPRK entities that were involved in the proliferation of weapons of mass destruction.

Ma Xiaohong, head of Dandong Hongxiang

Pyongyang Papers has received information about Dandong Hongxiang’s recent sanctions breaking activity. Our investigation would suggest that Dandong Hongxiang have not learnt from the past and have used the Chinese vessel “Hong Rui 8899” for the transportation of anthracite coal from Taean Port, North Korea. Korea Hangsong Trading Corporation was listed as the shipping company for the cargo. During our investigation Pyongyang papers has also discovered another vessel involved in transporting anthracite coal this time through Daean Port. The “Jang An” traveled from North Korea and performed a ship to ship transfer in the sea waters outside of Shanghai.

Reporting in the latest UN Panel of Experts report proves that the activity highlighted above is only the tip of the iceberg and with the DPRK regime suggesting that North Korean orphans are ‘volunteering’ to work in coal mines it is clear that the regime is willing to do anything to generate revenue. Even if this includes forced child labor and sanctions evasion!

If you have any information that could expose DPRK sanctions evasion, please get in touch.

Kim Restaurant

As reported many times previously, current UN sanctions imposed upon the DPRK limits the import of crude oil and refined petroleum, bans all imports of luxury goods, and prevents North Korean citizens from working overseas. North Koreans are often employed in the restaurants, construction and agricultural industries abroad.

The thousands of North Korean citizens working overseas, mostly in China and Russia, have provided a vital source of cash for Kim Jong Un’s regime over the years. According to US government estimates, Pyongyang has netted $500m annually from its overseas workforce. The UN clampdown seeks to block a steady flow of revenue back to Kim Jong Un’s regime, in the hope the sanctions force the regime to cease its nuclear weapon program. However, the DPRK have employed illicit tactics to continue it’s ballistic missile and nuclear weapon program, often with the help of foreign enablers. These enablers often hide in disguise as member of the United Nations…

Two allies, one border

China is key ally to the DPRK and their most important trading partner. China’s support for North Korea dates back to the Korean War and since the war, China has lent political and and economic support to North Korea’s leaders. Yet, the DPRK put a strain on the relationship when Pyongyang tested a nuclear weapon in October 2006, forcing Beijing to back the UN Security Council Resolution 1718 which imposed sanctions on Pyongyang.

Despite being an active member of the Security council, China has been accused by other member states of stalling and persistently trying to discredit or argue the accusations of the DPRK’s continued efforts to violate Security council resolutions. In some cases, China has been accused of helping facilitate the illicit import of refined petroleum products through ship to ship transfers and direct deliveries.

As published in the 2020 midterm Panel of expert’s report, communications from the delegation of the United States of America were fairly damning of China’s involvement:

“China and Russia’s annual obstructionist response to these reports is intended to prevent the UN from accounting for the large-scale, illicit refined petroleum product imports that the DPRK maintains while offering no alternative for how to reflect these volumes, which are being documented with irrefutable evidence. The United Sates, other Committee members and the Panel have made extensive efforts to resolve the ton to barrel conversion issue. China and Russia’s refusal to enter those discussions in good faith to reach a resolution and its comments in response to this report only reinforce that their intentions are to obstruct the committee’s responsibility to maintain and accurate accounting of the DPRK’s actual refined product imports.”.

Restaurants in China contravening UN sanctions

When responding to the UN Panel of Experts investigation in 2020 China stated that it “…has faithfully implemented the provision of Security Council’s resolution on repatriating all DPRK nationals earning income abroad”. However, it is no great surprise that China’s commitment to ensuring DPRK citizens have been repatriated may not be as genuine as they like to portray. This is particularly evident when it comes to the food trade and particularly overseas workers in restaurants. Pyongyang Papers has been investigating claims that restaurants in the Yanji and Jian areas specifically are actively employing DPRK workers despite sanctions.

There are believed to be over a hundred North Korean restaurants in China, with many located within the provinces along the North Korean border. Some of these restaurants are run as joint ventures between North Korea and China. During the early stages of the COVID-19 pandemic many restaurants were forced to close their doors and there were reports of workers, who were already being exploited by their own government during a global pandemic, being forced to take night shifts or moved to alternative employment in order to meet the financial demands of the regime.

North Korean restaurant in Dandong
North Korean run restaurant in Dandong, China

Yanji and Ji’an

Recent reports suggest the situation has changed and many North Korean restaurants on the border have began operating again. Pyongyang Papers has received information that the Helong representative of Korea Chonryong Trading General Corporation, So Yung Guk, set up DPRK workers for the Yanggak Restaurant located in the city of Yanji, Yanbian province.

Whilst in the Myohyangsan Restaurant located in Ji’an, the region of Changchun, China, the restaurant’s manager removed any reference to DPRK within the restaurant. A Pyongyang Papers source has indicated that this was on the orders of Chinese officials, presumably to help ‘hide’ any overt North Korean involvement in the restaurant and shield and illegal sanctioned workers.

What’s in it for China?

So why does China continue to support their difficult neighbor? China’s strategy boils down to the following- “no war, no instability, no nukes”.

Written in order of priority, China’s main focus is to avoid another Korean war which could ultimately end in a unified, pro-American Korea right on its border. Keeping close ties with the DPRK also benefits China in managing its rocky relationship with the US, it provides China with leverage to be involved and broker a deal between the two nations to denuclearize– further reinforcing China’s powerhouse status in the world of global politics.

As always, if you have any further information on North Korean sanction evasions please get in touch with Pyongyang Papers.

As reported previously, Pyongyang papers has been hard at work investigating and exposing oil smuggling and sanctions evading activities through ship to ship transfers to DPRK vessels. It would appear that there are no end of companies that are willing to disregard sanctions and smuggle commodities and goods for the North Korean regime. The threat of a damaged reputation and financial ruin if they are caught seems to do little to deter some companies from working with North Korea.

This new Pyongyang Papers investigation centers around methods used by ‘flagged’ vessels registered in third country.

Panama

Entrance to the Panama Canal
Entrance to the Panama Canal

Panama is positioned on one of the worlds most important trade routes which connects the Pacific and the Atlantic oceans. The Panama Canal has offered a short cut for shipping wanting to avoid the hazardous cape horn for over 100 years.

Panama has by far the largest flagged shipping fleet in the world. So why would such a small nation with a population of less than 4.5 million inhabitants have the biggest fleet in the world? One answer is because its easy to obtain registration. Panama operates an open registry. This is a not a new concept. Ships have used false flags as a tactic to evade enemy warships with examples from as early as the Roman era through to the Middle Ages. The term known as a ‘flag of convenience’ has been used since the 1950’s. However, the modern day practice of ships being registered in third party countries began in the 1920’s.

Why Panama?

What are the advantages of registering under the Panama flag? Well there are a number of advantages. Panama offers the advantage of a quick and easy registration and slack maritime regulations. Ships flying the Panama flag often belong to foreign owners that wish to avoid stricter maritime regulations imposed by their own country. Another advantage is the ability to employ cheap foreign labor with the added bonus of foreign owners paying no income tax.

To Pyongyang Papers this practice does not appear very ethical as it enables illicit trade, sanctions evasion and criminal gain worth millions of dollars every year. Although legal, Pyongyang Papers wonders if this practice should be allowed to continue or should international laws be changed so that flagged vessels should be registered in home countries and therefore governed by the home countries maritime regulations?

Pyongyang Papers has been investigating one such Panama flagged vessel named SUNWARD. The SUNWARD sails under IMO 8920115 and is an oil tanker built in 1990. The tanker has had a number of name changes in the past including GREAT FISH and SUNNY FALCON. Pyongyang Papers has information that the listed owner for the tanker as of 2019 was ‘Sunward Marine S.A.’ based in Kaohsuing, Taiwan with the commercial operator named as ‘Wills International Co. Ltd’ listed at the same address. This would point to the tanker being operated out of Taiwan.

Information from our sources has confirmed that the tanker SUNWARD has been used to evade UN sanctions. The vessel has been acting as feeder ship enabling the import of sanctioned oil to North Korea. Feeder ships are normally large tankers that load the oil from port and travel to a location where where ship to ship transfers will take place to often smaller vessels. During March and April this year the SUNWARD has been in action loading fuel at Taichung port in Taiwan, and transferring it to at least four DPRK tankers with a total of nearly 9,500 metric tonnes and worth millions of dollars.

Taichung Port, Taiwan
Taichung Port, Taiwan

The following four DPRK flagged vessels were spotted receiving fuel from the SUNWARD:

SIN PHYONG 2 (IMO 8817007)
AN SAN 1 (IMO 7303803)
UN HUNG (IMO 9045962)
SAM JONG 2 (IMO 7408873)

The SAM JONG 2 was listed in the latest UN Panel of Experts Report as receiving a ship to ship transfer from another Panama flagged vessel the RI XIN. The UN report also highlights a number of other Panama flagged vessels that have been supplying UN sanctioned oil to North Korea via ship to ship transfers, including:

HANG YU 11 (IMO 8694194)
INFINITE LUCK (IMO 9063811)
RI XIN (IMO 9121302)
CHAN FONG (IMO 7350260)
KOYA aka HATCH (IMO 9396878)
RI HONG (IMO 9162318)
NEW KONK (IMO 9036387)
MOUSON 328 (IMO 9021198)

Pyongyang Papers believe that its time to add another tanker …. SUNWARD to this list and to urge the Panama authorities to look at the flag of convenience loop hole and police this practice. Without this loophole being closed the DPRK will continue to receive sanctioned goods that will ultimately fuel their quest for revenue to be used to support the regimes prohibited nuclear and ballistic missiles programs. If you have any information on North Korea sanctions evasion please get in touch.

There are many images of Kim Jong-Un enjoying a ride in a luxury sanctioned vehicle in recent years and the shops in Pyongyang appear to be filled with watches, champagne and high-end technology. It seems that despite sanctions on luxury goods, the DPRK is still able to overcome these to guarantee the best experiences for the elite or those willing to pay for it. Pyongyang Papers first reported on North Korea’s illicit luxury goods trade back in 2018, where we detailed North Korean brokers sourcing luxury goods for the elite whilst normal citizens within the country were struggling with fuel shortages that were crippling food supplies.

Breaking the rules

According to the Panel of Experts 2020 midterm report and the recent final report in March 2021, luxury vehicles have been found within the DPRK despite efforts by the manufacturers to try and stop this from happening. Manufacturers including Mercedes-Benz and Toyota (Lexus) have had their vehicles found in the country. Both UN reports mention Mercedes-Benz S-Class 600 Sedan Long Guard VR9s specifically and the final report adds Lexus vehicles to this list of sanctions breaking behavior. It seems that the Mercedes-Benz vehicles passed through multiple countries including Italy & the Netherlands to make it from the manufacturer and eventually into the DPRK.

It seems that this method of sanctions evasion is still ongoing! A source close to the supply chain confirmed to Pyongyang Papers that a shipment of luxury goods and vehicles, including several newly manufactured Lexus 570 SUV’s and a Mercedes-Benz AMG, along with more UN sanctioned goods worth in excess of $1.2 million was due to be delivered to Ningbo Beilun, China with onward travel to the DPRK. This is in breach of the UN resolution prohibiting the sale of luxury items to the DPRK. Ningbo Beilun has an international port which has been heavily invested in by the Chinese government, also showing a continued increase in revenue over time. Clearly it is getting well used by the DPRK!

Kim Jong-Un has been seen, in recent years, showcasing several Mercedes limousines as well as a Rolls Royce Phantom and Lexus. Add to this the images of Kim Jong Un’s wife, Ri Sol-Ju, carrying handbags made by Chanel and Dior. This is in complete contrast to the citizens of North Korea who are facing potential famine under the current situation in the country. Despite offers, the DPRK has refused international aid meant to help fix this humanitarian crisis. It is unfortunate that whilst these citizens suffer through the pandemic, the elite in DPRK are able to obtain seemingly vast quantities of luxury goods.

China and the DPRK

The relationship between China and the DPRK has not been straightforward during the period of enforced sanctions on DPRK. China voted in favor of United Nations sanctions against DPRK when the country carried out its first nuclear test even through the two countries signed the Sino-North Korean Mutual Aid and Cooperation Friendship Treaty in 1961. The treaty encourages economic cooperation between the two countries and could explain why it is common for China to have been found facilitating DPRK breaking sanctions along with the financial reward they will gain from the transaction. China is the largest trading partner of the DPRK which might also explain this illicit behavior!

Routes to smuggle DPRK sanctioned items have frequently involved China, as seen in the recent case of Lim Cheng Hwee, who was jailed for supplying alcohol to North Korea. Another report written by C4ADS in 2019 describes the techniques and lengths the regime are willing to go to evade sanctions and get luxury goods into the DPRK. This includes Mercedes vehicles being shipped through China!


As always, if you have any information about evasion of DPRK sanctions, please get in contact with Pyongyang Papers.