The Wall Street Journal reports on a report from C4DS – see link below – highlighting that researchers in the US and South Korea have identified a number of business transactions that they say show North Korea’s international finance web is more sophisticated than what was widely known previously.

As an example, the report cites a transaction in which a military equipment supplier run by North Korea’s intelligence agency used a front company in Hong Kong to purchase components from an East Asian electronics reseller.  The payment was cleared through a correspondent account at the Bank of America, according to the report.


The Report itself says that it has found that the financial structure used by the North Koreans networks, surrounding North Korea’s major foreign exchange banks, which is tasked with the management of hard currency, have found themselves serving as a financial lifeline for the regime, but are reliant on a system that North Korea cannot control and is therefore vulnerable to systemic disruption.  The report says it is –

  • is Cash Dependent, the report explores how maintaining a positive flow of hard currency has become an imperative for regime survival and how the regime has gone to great lengths, often by illicit means, to ensure ongoing access to it;
  • is institutionally bottlenecked, the regime, hoping to maintain oversight and security, with limited methods for storing and transacting in foreign currency internationally. The report analyses how North Korea’s policies led the regime to offshore critical portions of its financial system; and
  • Is exposed to disruption, the report looks at how North Korean assets, nested within businesses overseas, are inherently vulnerable. It further explores the potential for international law enforcement action to dismantle critical nodes of the system.

DPRK chain


Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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