As a United Nations report revealed earlier this month, North Korea continues to dodge international sanctions and raise money for its nuclear weapons program, despite attempts to bar it from the global financial system. The report from the panel of experts charged by the U.N. Security Council with overseeing enforcement of U.N. sanctions on North Korea conclusively shows how Pyongyang capitalizes on an old method of sanctions-busting—smuggling—and a much newer one: hacking. In both cases, its tactics are getting more innovative.
When it comes to smuggling, North Korea’s use of ship-to-ship transfers continues to circumvent sanctions “unabated,” including through previously unreported methods. North Korea has been so successful in importing refined petroleum that the U.N. report said there are no current shortages of gasoline or diesel fuel within the country. Meanwhile, Pyongyang has used increasingly sophisticated cyberattacks “to steal funds from financial institutions and cryptocurrency exchanges,” the report warned, allowing it “to evade financial sanctions and generate income in ways that are harder to trace.” In both cases, North Korea relies on jurisdictions that lack either the will or the ability to stop it.
Despite the Trump administration’s claims of a stringent, international campaign of “maximum pressure” on North Korea, Kim Jong Un’s regime can still shield itself thanks to Russia and China. Both major powers objected to some details in the U.N. report, in part out of fear that it would implicate Russian and Chinese nationals in helping North Korea evade sanctions. North Korea, in a demonstration of what is at stake, launched two projectiles into the sea a week after the report’s release.