"North Korea Funds Nuclear Development Through Non-Financial Businesses"

Hypersonic missile launched on the 5th (left) and Hwasong-8 launched last year (right) [Image source=Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] Despite international sanctions, North Korea has been securing funds necessary for nuclear weapons development by utilizing non-financial sector businesses such as real estate.

According to a report released on the 5th (local time) by the UK security think tank Royal United Services Institute (RUSI), an analysis of 87 cases of sanctions evasion and proliferation financing related to North Korea revealed that North Korea raised foreign currency funds through precious metals procurement and sales, as well as overseas real estate businesses. Proliferation financing refers to the act of raising funds used for the manufacture, acquisition, possession, or development of weapons of mass destruction.

The report indicated that from 2008 to 2017, North Korea earned revenue by leasing the North Korean embassy site in Berlin, Germany, to private businesses.

In 2017, North Korea established a construction and development company in Zambia, Africa, which is believed to be a shell company. Additionally, it created complex distribution routes in various countries and imported luxury cars, whiskey, perfume, yachts, and other items into the country.

Cases using casinos and online games to obscure the tracking of funds were also discovered. Tens of millions of US dollars were reportedly sent through casinos to places such as Sri Lanka and the Philippines.

The institute stated, "International sanctions, including those by the Financial Action Task Force (FATF), focus on banks and financial institutions, which has made it difficult to properly detect North Korea’s activities."

Sasha Erskine, a research analyst at RUSI and author of the report, said, "North Korea has become increasingly adept at evading financial sanctions by utilizing non-financial sector businesses and experts. Urgent measures are needed to address this."

The institute expressed concern that the newly revealed blind spots could also affect international sanctions against corrupt politicians or regimes that violate human rights.

Sanctions against North Korea, led by the United States, have been in place for 15 years and were strengthened after North Korea’s intercontinental ballistic missile (ICBM) test launches in 2017, which could strike the US mainland.

Nevertheless, North Korea continues to accelerate its nuclear and missile development. It announced that it conducted hypersonic missile test launches in September last year and on the 5th of this month.

This content was produced with the assistance of AI translation services.