Coal, slaves and hackers

Where does North Korea get the money?

US President Donald Trump says he is ready to cope with the growing nuclear threat from North Korea with or without China. But, if he will need to cut the profits sources for dictatorship of Kim, hr will need help of Chins. It is more than 80% of North Korea’s foreign trade turnover.

For many years, the US and its allies have been controlling the revenues of the North Korean government, but so far Pyongyang has only demonstrated the ability to withdraw from sanctions.

John Park, director of the working group for Korea at the Harvard School of Kennedy, says: “We have stopped with sanctions in the relationship of the North Korean regime – now this is a senselessly bloated tool.” In his view, the US needs to persuade China to restrict trade with its neighbor within the framework of international agreements, other proposals, so that Washington tries to pressure specific Chinese companies that help Pyongyang to trade. The North Korean regime will be the central theme of the first meeting between Trump and Chairman of the People’s Republic of China Xi Jinping, which is taking place these days. Hard coal Reuters is assumed that the largest source of foreign currency is millions of tons of coal sent to China every year. In 2015, they accounted for about a third of official exports. How China manages the world commodity market in February, this article was in question, because China, which for the rest of the year stops the import of coal from North Korea.

Stefan Haggard, visiting researcher at the Peterson Institute for International Economics, believes that “the purpose of the ban on coal imports was clearly not to overthrow the North Korean regime.” Analysts believe that traders on both sides of the border have a lot of ways to circumvent this ban – these can be “black” deals or weakened control by the authorities. North Korea exports to China and other commodities and raw materials, including iron ore, seafood and clothing.  Even assuming that China takes a tough line on trade with Pyongyang, the dictatorship is believed to have large reserves accumulated during the active coal trade against the backdrop of the recent surge in world commodity prices. Park says that, in his estimation, the North Korean authorities keep in China “very large sums” and can use them for the development of military programs.

The storage of money in a neighboring country allows to circumvent the sanctions aimed at excluding the country from the world financial system. According to Park, Pyongyang’s access to this money depends on “the political will of the Chinese authorities to track these funds in accordance with the laws of the country.” UN investigators and their American counterparts also found evidence that North Korea is gaining access to the international banking system through a network of shell companies. Anthony Ruggiro, a senior fellow at the Foundation for the Defense of Democracy, believes that one of the possible levers of the US government is the pressure on Chinese banks to help North Korea avoid sanctions. Raggiro writes: “A major fine [one of the banks] will become a signal to the Chinese financial system, and other Chinese banks may reconsider their positions on this issue.”

Since the beginning of last year, North Korea has a new source of income: hacking banks. According to a recent report from Kaspersky Lab, at present the country is associated with attacks on financial institutions in 18 countries. Park says: “The North Koreans have become very sophisticated crackers, and in the future this can become a significant source of income.” In March 2016, there was a high-profile crime – the Central Bank of Bangladesh was robbed and traces of the crime were conducted to North Korea – according to analysts from Kaspersky Lab, similar thefts were also committed in Costa Rica, Poland and Nigeria.

This source of income Pyongyang discovered recently – and before, as it is supposed, the North Korean authorities earned the illegal trade in weapons and drugs. The sale of forced labor The North Korean capital elite lives richly, but most of the citizens of the country are beggars, and until recently hunger reigned here. This is one of the most closed economies in the world, but it is quite possible to squeeze funds out of the population from the population.

According to the UN report of 2015, another way to earn money is sending thousands of North Korean workers abroad: to China, Russia and the Middle East, where they work in slave conditions in mining, logging, textile production and construction. And according to Curtis Melvin, a researcher at the American Institute of Korea at Johns Hopkins University, the government also creates department stores and sells cell phones for pumping money out of the population. However, according to experts, some North Koreans manage to accumulate hard currency by trading on the black market inside the country or by smuggling goods from China.