North Korean Sanctions Evasion Techniques

The United Nations imposed increasingly restrictive sanctions on North Korea after each of the six nuclear weapons tests that it conducted between 2009 and 2016. However, enforcement of those sanctions has been mixed.

In this report from RAND Corporation, author King Mallory, describes the origins of North Korea’s hostility toward the West in the Korean War, the behaviors that led that country to continue to be regarded as hostile and aggressive, and the multilateral arms control mechanisms available and sanctions regimes imposed on North Korea to contain its proliferation activities and bring that country back into compliance with international law. The author then details the various entities involved in North Korean sanctions evasion activities and proceeds to use case studies to illustrate North Korea’s principal sanctions evasion techniques in four general areas of sanctions evasion activity: hard-currency generation, restricted and dual-use technology acquisition, covert transport, and covert finance. The report is intended as a reference and learning tool for the wide variety of practitioners who form touch points with the global North Korean sanctions evasion ecosystem.

Key Findings

North Korea has become adept at evading sanctions that the international community has imposed on it

  • North Korea engages in four types of sanctions evasion: activities that generate hard-currency income, activities using the hard currency acquired to buy essential raw materials and dual-use and restricted technologies, covert transportation of goods that obfuscates North Korean involvement, and movements of hard currency, precious metals, and jewels internationally without North Korea’s beneficial ownership of those funds becoming known.
  • Four types of entities are 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 feed its overriding need for hard currency to maintain the incumbent political regime and fund nuclear weapon and ballistic missile programs

  • Those programs threaten international security and have destabilized and supported insurrection in most of the Sahel countries.
  • Those same activities are launching or have launched a nuclear weapon and ballistic missile arms race in the neighboring Middle East, exposing African nations to the threat of future missile attack.
  • They have also led to the killing of civilians with chemical weapons.

North Korea is active in 38 African countries

  • Its principal sanctions evasion activities take place within just over one-third of those countries.
  • Four of those countries may represent particularly hard cases (Democratic Republic of the Congo, Libya, Mali, and Mozambique).
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