LONDON - A new report says the Chinese border city of Dandong continues to provide a vital lifeline for North Korea’s economy, despite United Nations sanctions that have been in place since Pyongyang conducted a nuclear missile test three years ago, an incident that many thought could have led to war on the Korean peninsula.
Researchers from Britain’s Royal United Services Institute say businesses based in Dandong are importing coal and minerals from North Korea to sell on global markets, while also procuring goods to send back into North Korea that could be used for Pyongyang’s nuclear and missile programs.
Dandong sits across the Yalu River from the North Korean town of Sinuiju and has long been a major hub for cross-border travel.
Dandong’s financial infrastructure plays a crucial role in sustaining North Korean trade. Research from the Royal United Services Institute shows that between 2014 and 2017, almost a quarter of North Korea’s total trade moved through only 150 Dandong-based companies, with a value of $2.9 billion.
Report co-author Joe Byrne, who spoke to VOA in an interview Monday, says much of the trade would now be prohibited by U.N. sanctions.
“For example, the U.S. Treasury has designated in previous years many entities that are based in Dandong that have been active in illicit trade,” Byrne said.
Just 10 of the 150 companies accounted for nearly two thirds of all the reported trade during the period in question. Of these, five have since been sanctioned by the U.S. Treasury for their links to the North Korean government and its nuclear and missile programs. All are still active, says the report.
In September 2017, after Pyongyang carried out its sixth and largest nuclear test to date, the United Nations Security Council imposed broad sanctions on the North Korean economy, including on the export of coal and minerals. Those sanctions were backed by China.
But the report authors say there’s strong evidence that the Dandong-based companies are continuing to import materials from North Korea.
“[Such as] revenue generation through coal exports,” says Byrne. “That would then be funneled through front companies in Hong Kong which shared identifiers with Chinese companies, such as phone numbers and locations, office locations... Some of these companies would send items to Syria, Iran, Myanmar – countries that have had previous reported military relationships with North Korea. And then those companies would then procure items and send them to North Korea.”
“There’s a whole range of things and it’s difficult to say what is for certain for the nuclear program and ballistic missile program, and what is not. In terms of illicit trade going on right now, it is hard to say because the trade figures have stopped being reported by China,” Byrne told VOA.
The report authors say Dandong-based companies are enabling North Korea to evade sanctions, raising serious questions about China’s implementation of measures that Beijing itself supported at the U.N. Security Council.