Regular readers into DPRK sanctions evasion will have heard of Winson Oil or the Winson Group previously. Pyongyang Papers investigated Winson Oil and their involvement facilitating the sale of oil to North Korea in 2020.

In March 2021, the Royal United Services Institute (RUSI) and C4ADS went a step further and were able to unpick the complicated web of companies, individuals and ships involved in the Winson network. This network included criminal links, shell companies and a range of obfuscation techniques in use to try and hide the illicit activity. The ‘Black Gold’ report details how Winson Oil are a key node in the DPRK’s fuel procurement network and were using their links, as a major regional oil trader, to help breach sanction resolution 2397 (2017). The resolution states that “all member states are prohibited from supplying, selling or transferring crude oil that exceeds the aggregated amounts of 4 million barrels or 525,000 tons per 12-month period from 22 December 2017”.

The UN Panel of Experts contacted Winson Oil who naturally denied involvement and stated: “Winson denies, in the strongest possible terms, any and all allegations and/or insinuations that it knowingly facilitated the illicit supply of oil to North Korea in breach of any United Nations Security Council resolutions, and/or that it is a ‘key node’ in North Korea’s procurement of oil or refined petroleum products”. However the UN investigation highlighted some flaws in Winsons denial of any involvement as the individual, Mr. Chen Chi-wei, had used the same address, as was used to register one of Winsons ships, to register the company Winson had dealt oil to.

Jie Sheng Ship Management Co., Ltd

Jie Sheng Ship Management (傑陞船舶管理顧問有限公司) is a company that is not likely to be familiar to many but their relationship with Winson is slightly suspicious and warrants further investigation. Pyongyang Papers have been advised that Winson have recently transferred a number of ships to Jie Sheng Ship Management Co., Ltd and investigations online suggests this is true. The ships include:

  • ANGEL 22 (IMO 9191230)
  • ANGEL 33 (IMO 9011404)
  • ANGEL 38 (IMO 9175743)
  • ANGEL 101 (IMO 9101455)
  • ANGEL 106 (IMO 9141895)
  • ANGEL NO.1 (IMO 9434709)
  • ANGEL NO.2 (IMO 9146027)
  • OCEAN CRYSTAL (IMO 9116905)
  • OCEAN SPLENDID (IMO 9221683)
  • AT HONOR (IMO 9316555)
  • NEW HARMONY (IMO 9208605) – Previously named the ANGEL 17 and still appears on the Winson homepage

This itself in not unusual as ships are often sold when a company is looking to upgrade its fleet or adjust its business model. However, some additional details regarding the Jie Sheng Ship management Co., Ltd leave us wondering what is really going on.

Other Links

A news article from July 2022 about the ANGEL 33 being abandoned at sea after a leak suggests that Jie Sheng operates mostly tankers that are used to supply fuel to fishing trawlers at sea. This model of operating is very similar to the shuttle method described in the ‘Black Gold’ report. The news article also suggests that Jie Sheng Ship Management Co,. Ltd operate around 20 tankers. A very sizeable amount but appears to have a very minimal online presence apart from a few business listings offering limited information. This is regularly noted as a potential indicator of a shell company. One business listing suggests that Jie Sheng is located at Floor 25, No. 29, Hanbian Road, Lingya District, Kaohsiung City, Taiwan. Floor 25 is believed to be one of the floors owned by Winson Shipping Taiwan! Several other Winson related companies are also registered to the same address adding to our suspicions.

Jie Sheng Ship Management Co., Ltd
Online business listing for Jie Sheng Ship Management Co., Ltd

Online social media profiles also suggest a deeper connection between Jie Sheng Ship Management Co,. Ltd and Winson. Several individuals claim to have worked for both companies at the same time and recent posts show crew on board some of the Jie Sheng Ship Management Co., Ltd vessels wearing clothing with the Winson Group logo on them.

A selection of social media profiles showing the connection with Winson & Jie Sheng

All of this suggests that Jie Sheng may just be a shell company that Winson has setup. The shell company could be completely innocent but Pyongyang Papers asks the question, why does it need to exist in the first place? With the Winson Groups previous activity and subsequent denial of any wrongdoing, along with the limited company information and setup. We suggest that the company is likely being used to hide current or previous illicit activity and Pyongyang Papers would appreciate any additional information that may be available to help our ongoing investigation. As always, you can get in touch through the ‘Contact Us’ page.

North Korea is one of the only few countries worldwide that is still not a member of the International Labor Organization (ILO), choosing instead to continue exploiting its citizens and using forced unpaid labor to fuel its economy.

High number of DPRK laborers in China are only increasing

Since Kim Jong Un became leader of the DPRK in 2011, the number of workers sent abroad has increased to earn foreign currency for the regime. DPRK contracts with foreign governments including: Russia; parts of Africa; East and South East Asia; Middle East and Eastern Europe are all receiving forced labor with their movements and communications under constant scrutiny by DPRK government ‘minders’. Any complaints by the workers, or those who flee, will have consequences and will result in action being taken against their relatives back in the homeland.

We all know the Human Rights are an issue when related to the DPRK, well, Pyongyang Papers have been tipped off about incidents of assault amongst North Korean Laborers by their unit managers within their neighbors and close ally, China. Is China also turning a blind eye to this behavior? The People’s Republic of China (PRC) has a long record of circumventing sanctions in order to trade with the DPRK. According to the U.S. State Department’s 2021 Trafficking in Person’s report, there are between 20,000 to 80,000 DPRK workers in China. With reports suggesting that the Chinese Labor market is worsening (worse than the official monthly figures) with less jobs available nationwide and Chinese youth jobless rates hitting record high of 20% in July, we are not sure how much work there actually is for these thousands of North Korean workers when they get to China. With money still being sent home to the Regime, China is paying the price for this partnership.

Forced to work in poor conditions

Those that do have work are subject to back-breaking labor for 12 hours a day and are even banned from leaving their accommodation or work places since the Covid pandemic – even before that, they were only allowed to leave for their local markets in small groups. Add these poor conditions to the reports of assaults, the DPRK workers are more like slaves! North Korean authorities have also sent orders to the North Korean consulate, underscoring that officials should keep a closer eye on the workers to prevent them form fleeing and to work harder. These orders have obviously trickled down to the managers and put pressure on them to deliver! Pyongyang Papers would like to think this is isolated, but fears the worst, as we understand several China-based DPRK labor cooperation managers had verbally abused, along with physically attacking their fellow countrymen.

North Korean workers and imports continue to cross border into China despite UN sanctions | South China Morning Post
DPRK laborers allowed to leave their dorms

As well as failing to send the DPRK workers home before December 2019 deadline (as ordered by UN sanctions), it looks like the Chinese companies that employ these illegal workers also have no regard for their safety and well being. There is no excuse for this behavior and in a civilized society this conduct would not be tolerated. Perhaps the managers are more concrrned by meeting targets than the welfare of their underlings.

There are so many wrong doings on DPRK workers in China but as usual, money comes before basic human rights. Will the international community stand by the people of North Korea by putting further pressure on Pyongyang? If you have any information about DPRK workers in China, please reach out to us.

Pyongyang Papers has recently reported on DPRK illicit sanction breaking activity which involves North Korean officials brokering deals and netting $millions in commission, which is funneled back to the regime’s ballistic weapons money pot. Since our last article, we have been busy investigating more million $ commission-based dealings with Chong Sang-Hun and Chong Hyok.

China’s Port of Ningbo-Zhoushan

The latest deal we have been investigating involves thousands of tonnes of copper cathodes being delivered to China’s port in Ningbo, over a 12-month period. The port is located in Ningo and Zhoushan, on the coast of the East China sea and is the busiest port on the world in terms of cargo tonnage, however it has faced much disruption since the COVID-19 pandemic began.

Ningbo-Zhoushan port
The port of Nigbo-Zhoushan

The copper cathodes deal is between a Indonesia-based trading company International Investment Trading (IIT) and China-based Liaoning Zhongwo Petrochemical Co., Ltd. (LZPC.) IIT have been commodity re-traders since 2019, specializing in the gold, copper, steel and oil products. Chief Exec Mr Micheal E Jones claims to ‘believe in transparency’, ‘are hungry to grow’ and are ‘proud to offer their clients and suppliers a fair deal at a reasonable price’. LZPC have been operating since 2021. Here at Pyongyang Papers we wonder if IIT’s clients are aware of their illicit involvement which in turn supports the DPRK’s nuclear program?

Coking Coal from Russia to China

Sang-Hun and Hyok have also facilitated another deal on behalf of China involving hundreds of thousands of tonnes of coke, originating from Russia. China, the world’ biggest coal consumer, is drastically increasing it’s domestic coal output. However, the quality o the fuel produced from its own mines is low and unsuitable. Metallurgical coal is key feed stock for steel making, meaning Chinese steel-makers are still dependent on overseas suppliers for coking coal.

After the US, Russia is the second in line with the World’s largest coal reserves. However, following the Russian invasion of Ukraine, many buyers in Europe along with Japan had already significantly reduced their dealings with Russia. Coupled with this, since August Russian coal imports have been subject to a ban in the European Union.

This has resulted in Russia significantly discounting their cargo – well below rates from other suppliers, like Indonesia and Mongolia.

Not to miss out on an offer, China have seized their opportunity. Reuters reported in May on record surges of coking coal imports from Russia to China, with a Beijing-based coal trader stating ‘Chinese and Indian traders are snapping up Russian cargoes as Western companies scale back, even though the embargo has not officially taken affect yet’.

According to Chinese customs data, Coking coal imports from Russia to China jumped to 2.5 million tonnes in September, from about 900,000 tonnes in the same month last year and 1.9 million tonnes in August.

DPRK earn Commission on China Cole Deal

The coke deal brokered by the North Korean officials is being delivered to China’s port in Longkou, with China Rozhao Le Song Trading Co., Ltd being the recipient. Longkou port is a artificial deep-water international seaport located in the province of Shandong, which imports and exports mainly consist of cargoes from the petrochemical industry.

Pyongyang Papers wonders whether the embargo will have any effect on Russia. Especially as China are more than happy to increase trading. Even if they are not involved in the deals directly, the DPRK will find any way possible to earn some quick money and break sanctions. If you are aware of any deals involving the DPRK, please get in touch with us through our ‘Contact Us’ page.

It seems the DPRK have zero boundaries when it comes to the illicit sanction breaking activity they are involved in the fund their nuclear weapons program. Pyongyang Papers has recently reported on the DPRK’s ventures in cyber-crime, adding to it’s tried and tested methods of generating funds such as ship to ship transfers, overseas workers and importing luxury goods.

Pyongyang Papers has been informed of a deal involving DPRK officials in Southeast Asia. Chong Sang-hun, based in Thailand, and Chong Hyuk, based n China, are acting as middlemen in brokering deals that netted $millions in commission. We have noticed that when the DPRK have no illegal services or goods to offer themselves, instead they use their nationals, often those acting in official roles such as Sang-hun and Hyo’k, broker these deals for other countries and as a result earn a commission fee to send back to the regime.

The deals for the purchase of tonnes of gold over a 12 month period were on behalf of the Chinese company Hainan Huaxian trading Company Ltd. (HHTC) as the buyer and Golden Lion Precious Resources Pte Ltd as the seller.

Golden Lion Precious Resources are an exempt private company with a registered address at 7, Temasek Boulevard, #12-07, Suntec Twoer One, Singapore 038987. the company’s activity is gold bullion brokers.

Our investigation into HHTC and their involvement in illicit North Korean activity is still underway, but we have been made aware they were also in the market to purchase multiple hundreds of thousands of tonnes of aluminum ingots over a two-year period. We wonder if San-hun and Hyok will jump at the chance to make some quick money off the back of this deal too.

Nuke testing

Kin Jong Un’s persistent refusal to stop north Korea’s nuclear testing program resulted in enforced UN international sanctions in September 2017. Resolution 2270 states that all member states are to prohibit DPRK diplomats, government representatives (or DPRK nationals working in that capacity) from participating in joint ventures and any other business arrangements.

However, it seems the constant tightening of UN sanctions, crippling the North Korean economy, have still not deterred Kim Jong Un from testing Nukes. In fact, since the sanctions were introduced the missile tests have increased at an alarming rate.

In 2020, North Korea conducted four missile tests. This doubled in 2021 to eight tests. In 2022, Kim Jong Un has so far conducted 16 tests, and judging from recent speech he made at a military parade, Kim Jong Un appears defiant in increasing the country’s nuclear capabilities:

“We will continue to take steps to strengthen and develop out nation’s nuclear capabilities at the fastest pace,” he said, adding that their nuclear forces ‘must be ready’ to be exercised at any time, according to a report by the Official Korean Central News Agency (KCNA). Despite in the past proclaiming that the nuclear weapons would only ever be used in acts of self-defense, his speech indicated that this may not be the case. “The fundamental mission of our nuclear forces is to deter a war, but our nukes can never be confined to the single mission of war deterrent even at a time when a situation we are not desirous of at all is created on this land. If any forces try to violate the fundamental interests of our state, our nuclear forces will have to decisively accomplish its unexpected second mission. The nuclear forces of our Republic should be fully prepared to fulfill their responsible mission and put their unique deterrent in motion at any time”.

Adversaries & Allies

The increase in nuclear weapons could be a direct response to increasing tensions with North Korea’s long-term adversaries – the united States and the republic of Korea.

The recent election of South Korea’s new president Yook Suk-yeol, who has voiced a harsher line on North Korea’s actions, has frayed relations between the countries who already have problematic history. In 2018, Kim Jong Un agreed a suspension on long-range ballistic missile tests and nuclear tests following talks with the then US president Donald Trump. Kim Jong Un announced he was no longer bound by his promise in 2020 when relations between the two countries seem to have become increasingly fraught since.

Coupled with this, Kim Jong Un has been displaying public support for Vladimir Putin’s decision to invade Ukraine, despite strong condemnation by the US ad its allies. North Korean state media published a recent letter sent from Kim Jong Un to Vladimir Putin, congratulating Russia on the occasion of its Victory day holiday. Within the letter Kim also send ‘solidarity to Russia’s peoples achievements’ that fundamentally aim to ‘eliminate’ political and military threats posed by ‘hostile forces’ and ‘protect the dignity, peace and security of the country’ adding that ‘friendly relations that’s strategic and tradition’ between North Korea and Russia will ‘strengthen and develop . . . with the demands of the times’.

It remains to be seen what Kim Jong Un’s next move will be. But judging from his recent activities, we can be certain it will be provocative and of a hostile nature. Until North Korea agree to cease it’s nuclear weapons program, the security of it’s neighboring countries and adversaries are at great risk. the world must unite and put a stop to the countries and organizations that continue to help the reckless and unruly regime fund it’s weapons program that threatens us all.

If you have any further information on organizations involved in sanction breaking activity, please get in touch with us at Pyongyang Papers.

June 24, 2022 was a day of significance as it marks the 48th anniversary of diplomatic ties between the DPRK and The Lao People’s Democratic Republic. The friendship and cooperation between the two countries was forged and deepened through historic summits of 1965 and 1970 between Kim Il Sung and leader of Lao people- Kaysone Phomvihane. Today, the DPRK government remain unchanged in their resolve to develop the relations of ‘friendship’ with Laos.

Pyongyang Papers asks the question, “does DPRK need Laos more than Laos needs DPRK?” We would suggest that the DPRK only need Laos as a money generator for the regime and therefore have no problem severing any ties if they do not get what they want i.e. money. So, is this true friendship?

North Korean restaurants in Laos

With easing of COVID-19 travel restrictions in Asia, people have been able to travel again. The backpacker trail is opening up with travelers seeking out new experiences.

Pyongyang Papers has been tipped off by a backpacker that restaurants in Laos are still operating using North Korean workers. Despite UN Security Council resolution 2397 requiring all Member States to repatriate, by December 22, 2019.

All North Korean entities (including restaurants) are supposed to have been closed down under UN sanctions which prevent North Korea from having overseas workers. It is well documented that North Korea exploit their citizens by sending them abroad to earn foreign currency which is then sent back to the hermit state. These restaurants are another example of this, and the money is certainly not for the good of the impoverished, starving people but more likely end up funding weapons of mass destruction.

Our backpacker found a very unusual dining option in Vientiane, 원언니식당 (Won Onni Sikdang) – which translates to Big Sister Won’s restaurant. This restaurant, conveniently located close to the DPRK Embassy in Vientiane, doesn’t offer Laos cuisine, but instead seems to be a North Korean restaurant and has multiple 5-star reviews on Google.

Google reviews of “Big Sister Won” restaurant confirm the restaurant has been operating in 2022.

So what’s in it for the DPRK regime? Sources confirm that the North Korean restaurant menu requests payment in US dollars and not Laotian Kip. This is another way that the DPRK can seek to launder its ill-gotten gains, and a source of foreign currency for the regime. We don’t believe that this is just a business set up by an enterprising North Korean expatriate. Any North Korean restaurant will certainly have to pay a retainer or fee to the DPRK embassy in Laos just in order to operate, which is forwarded onto the DPRK regime.

According to the 2022 UN Panel of Experts report, Big Sister Won’s restaurant is not the only North Korean restaurant believed to still be in operation in Laos. The UN report details four North Korean restaurants and one night market, including their locations and images, which appear to have continued to operate “even after the applicable measures towards the closure of the restaurants and repatriation were taken by the Laotian authorities in 2020”. This is a direct violation of the December 2019 United Nations Security Council Resolution (UNSCR) 2397.

Kumkangsan Restaurant

The UN report however does not mention Big Sister Won’s restaurant, it seems this one may have slipped under the radar somehow. Our sources have informed us of another North Korean restaurant in Vientiane; Kumkangsan Restaurant (ອາຫານ ຄຶ່ມກ່າງຊານ) on Asean Road, Sisavath Village, Vientiane. The Kumkangsan restaurant seems to have a shop attached- we wonder what they sell?

Social media post confirm Kumkangsan restaurant is in operation as of May 2022.

The latest UN Panel of Experts report states that Laotian authorities took action against the North Korean restaurants in 2020 but our investigation proves that more needs to be done to stop the regimes illicit activity in Laos. Pyongyang Papers is still investigating DPRK run restaurants in Laos and would like to hear from you if you have any further information on the entities named in this article or any other individuals and entities helping the North Korean regime avoid sanctions so that we can investigate further.

Pyongyang Papers has extensively reported on the topic of sanctioned DPRK citizens abroad, but it doesn’t seem to be improving as far as we can see.

Why are North Korean workers abroad a problem?

It not uncommon for people of all nationalities around the world to move and seek employment abroad for a range of different reasons including experiencing different cultures, a better quality of life and for financial gain. Unfortunately for North Korean citizens the situation is very different. Citizens of the DPRK are not afforded the luxury of the freedom to travel abroad unless the regime requires them to do so and that requirement is usually to make money for the regime!

Since 2017, all UN member states have been prohibited from providing work authorizations for DPRK nationals in their countries as well as ensuring that any present North Korean workers were repatriated by the end of 2019. The resolution was introduced to try and stem the flow of foreign currency heading back to the regime in support of its nuclear and ballistic weapons program and to stop the exploitation of North Korean citizens who are not protected by labor laws and often have their human rights easily violated.

An ongoing issue

There continues to be regular reports of North Korean workers being sent abroad with the ongoing pandemic around the world being used as a reason for not being able to repatriate those already abroad. The latest UN Panel of Experts report documents several instances of overseas workers still earning currency in China, Equatorial Guinea, Lao, Russia and Vietnam across a variety of different industries including construction, clothing, IT and the restaurant trade.

The majority of overseas workers are believed to be in China and Russia. Given the historical ties between the 3 countries, the shared border offering easy transit during non-pandemic times and North Korea labor costing half as much as native labor this may not be a huge surprise. Worryingly the attitude of China and Russia, who both claim to faithfully implement the UN sanctions, can be easily determined from their replies to the UN Panel’s requests.

For example, when questioned about entities using DPRK labor, China responded “The companies mentioned in the Panels letter only have the English and Korean names. Since China’s business registration system uses only Chinese language, we cannot conduct comparison and verification, and if the Panel requires China to verify every time it gets some new information, it will be a huge burden of work. It is also by no means the obligation of the Chinese government”.

China’s response to using DPRK labor, UN PoE report S/2022/132

Korea 51 Trading Corporation

China may not care, but Pyongyang Papers does! We have been informed that the DPRK company, Korea 51 Trading Corporation are looking to renew labor contracts for the next 10-years. Korea 51 Trading Corporation appeared in the August 2020 Panel of Experts report for sending 292 DPRK nationals in January 2020 and 190 in August 2019 to work for a clothing comoany called Dandong Manch’o’p Clothing Cooperative Ltd. The panel noted that Korea 51 may be using a different name. As part of the contract we have been made aware of, 900 North Korean laborers will be sent to two Chinese corporations– we have been informed that one of the corporations to receive the laborers are China Yanbian Jinyang Industry Co., Ltd (延边金洋实业有限公司).

Yanbian Jinyang Industry Co., Ltd are a company located in Kaishantun Town, Longjing City, Yanbian Prefecture, directly next to the DPRK border. The company is involved in many different businesses according to listings online including contracting, construction, mechanical processing, chemicals, metals, glass and processing and sales of clothing. The executive director listed as Li Yang (李洋). In addition to the 900 North Korean laborers, another 1,000 workers already in the area of Longjing would be transferred to work for the Chinese corporation.

The labor market

Recent reports suggest that the labor market has tightened recently due to the ongoing effects of the COVID-19 pandemic as demand for workers increases. A recent radio free Asia article reports on North Korean placement officials demanding more money and incentives which in turn leads to potentially even more money for the regime.

China are not the only country that is still breaking UN sanctions. During our investigation we have come across more information about a contract whereby UN sanctioned DPRK laborers would be working in the clothing industry in Nigeria. It appaers that The DPRK Nigerian Representative Office of an entity named Chinson General Co., Ltd and a Nigerian clothing manufacturing company called Purple Firm located in Lagos, are working on a 3-year labor contract. Details are very limited but Pyongyang Papers will continue to explore and expose any additional details we uncover.

Stopping the problem

Instances of North Koreans working abroad to fund the regime are easy to find and our investigation proves that the problem isn’t going to be resolved anytime soon. Countries like China use poor excuses to avoid thoroughly investigating evidence that suggests sanctions breaking activity is happening within their borders. Until all members of the UN unite and enforce the resolutions they have agreed to then the DPRK regime will continue to make large sums of money by exploiting its own citizens.

As always, if you have any information on sanctioned North Korean activity please get in touch with Pyongyang Papers.

Information given to Pyongyang Papers indicates that in excess of 350 sanctioned DPRK workers and their families are still residing in Republic of Congo (ROC), despite UN sanctions.

Since 2006, the UN Security Council has passed a number of sanctions to try and deter North Korea from continually developing and testing their nuclear & ballistic weapons, money laundering, cyber attacks and human rights violations. These sanctions have had a heavy toll on North Korea’s economy but have been undermined by failure of some countries to enforce them, and in some cases break them.

Africa relationship

Historically, North Korea helped Africa in condemning the European colonialism in Africa by providing military and civil support in revolutionary movements across the continent and in return were successful in making sure South Korea couldn’t join the Non-aligned Movement, the largest grouping of states outside of the UN. Since then, North Korea and Africa have maintained a close relationship to achieve political goals, even if it means Africa is undermining UN sanctions!

The presidential palace in Windhoek is one of many monuments in Africa designed and constructed by North Korea.

Republic of Congo

Pyongyang Papers has been informed of trouble for two North Korean doctors contracted to a local government hospital in the Republic of Congo by the DPRK Ministry of Public Health. This is not the first time that Pyongyang Papers has reported on North Korean doctors illegally working in the ROC, and it seems clear they show no signs of stopping.

The doctors were severely reprimanded by the manager from the DPRK Ministry of Public Health representative office located in the Republic of Congo. The reprimand was due to misconduct involving illegally selling traditional oriental medicine, known as Koryo medicine, at local governmental hospitals as well as openly fighting each other over who would treat patients!

Korea Moranbong Medical Cooperation Center

An organization who consistently appear to be involved in sanction evasion activity is the Korea Moranbong Medical Cooperation Center. Pyongyang Papers have already shed light on their previous involvement in brokering deals to facilitate North Korean doctors working in Africa. You can read more about Moranbong activities in our articles ‘DPRK doctors operate around sanctions‘ and ‘North Korean doctors remain in Africa‘

A representative of the Korea Moranbong Medical Cooperation Center in the Republic of Congo has made a request to the authorities of Congo for a visa extension for two doctors located in a joint DPRK-Congo medical clinic located in the market area of Pointe-Noire. We are still currently looking into the visa extension request to see if there are anything else we can uncover!

Pyongyang Papers have also been made aware that officials from DPRK and Republic of Congo have been in discussions and have agreed to issue residency visas to 38 DPRK laborers.

Some progress?

In better news, Pyongyang Papers have found out that not all African countries are so relaxed about breaking UN sanctions placed on North Korea. Chad is a landlocked country at the center of Africa that has a strong relationship with the US who established diplomatic relations with in 1960 after Chad’s independence from France.

Pyongyang Papers has recently been informed that the Government of Chad have postponed a contract with a Chad based company called Groupe Awlad Abdelmouti due to concerns over the current sanction’s situation. Awlad Abdelmouti is a deign and engineering company based in the capital of Chad, N’Djamena. The company is involved in architecture and building projects. They also operate in the trade industry and appear to sell hardware and building materials and order some of their products from Turkey.

Groupe Awlad Abdelmouti had been contracted by Presidential Department of Chad to construct the Martyr’s Museum, which in itself isn’t the problem, the problem is that the company is using sanctioned DPRK laborers.

This is good news and shows that there are serious attempts to stamp out sanctions evasion involving the DPRK. If Africa were to stand united and follow in Chads footsteps then maybe some real progress would be made in bringing much need stability to the region and help end Kim Jong Un’s pursuit of nuclear weapons. If you have any information relating to sanctions evasion by the DPRK please contact Pyongyang Papers!

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.