In response to North Korea’s nuclear weapons tests and other destabilizing activities, Congress has passed several bills over the past few years to impose sanctions on North Korea, including the Countering America’s Adversaries by Sanctions Act and the Otto Warmbier North Korea Nuclear Sanctions and Enforcement Act. The United Nations, European Union, and several foreign governments have also sanctioned North Korea. However, North Korea has become adept at evading sanctions that the international community has imposed on it.
New RAND research provides a detailed examination of four North Korean sanctions evasion techniques and examines the various entities involved in these activities. The report is intended to serve as a guide to North Korean sanctions evasion methods.
The author explains that North Korea engages in sanctions evasion in four general areas of activity:
activities that generate hard money income;
activities using the hard money acquired to buy basic raw materials and dual-use and restricted technologies;
covert transportation of goods that obfuscates North Korean involvement (smuggling); and
movements of hard money, precious metals, and jewels internationally without North Korea’s advantageous ownership of those funds becoming known (money laundering).
The report finds that there are four types of entities involved in North Korea’s sanctions evasion:
North Korean government officials accredited to North Korea’s embassies;
North Korean overseas workers;
front and shell companies; and
trusted third-party intermediaries.
Sanctions evasion allows North Korea to satisfy its overriding need for hard money to continue the incumbent political regime in strength and fund nuclear weapon and ballistic missile programs. Those programs threaten international security, particularly in Africa, where North Korea is active in 38 of 54 countries.
Despite the large number of African countries indicated, the challenge posed by North Korean sanctions evasion activities in Africa is not impossible to conquer. The author finds that the North Korean sanctions evasion-related entities and sanctions evasion-related activities causing the greatest possible harm were concentrated in eight African countries. If the governments of those countries, nearby countries, and the international community realize the dangers that cooperation with North Korea creates and then decide to enforce sanctions, they could have a meaningful impact on reducing the security risks produced by North Korea.
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