Even Through Decades of Sanctions, North Korea Finds Avenues of Trade

Loopholes Abound

China has kept North Korea’s garment sector off the list of industries targeted by United Nations sanctions, arguing that punishing it would hurt ordinary people and not military programs. It has protected North Korea’s seafood industry using the same argument.

But it is difficult to say who benefits from this trade, in part because even private enterprise in North Korea is overseen by state officials who extract taxes and bribes.

“Whether the proceeds from the textile industry support the nuclear program is an open question,” said Joseph M. DeThomas, a professor at Pennsylvania State University and a former American ambassador involved in sanctions policy. “Money is fungible.”

At least one North Korean enterprise controlled by the atomic energy bureau, the Korea Kumsan Trading Corporation, ran a garment factory that added embroidery and beading to clothing, according to a North Korean government trade website.

And South Korean officials say that the millions paid by Chinese companies to fish in North Korean waters go primarily to firms controlled by the North’s military.

Sanctions also do not cover the organized export of labor. The United States has urged countries to eject North Korean workers, saying their remittances benefit the military, not their families. But China, Russia and other nations continue to hire them.

American sanctions against North Korea began with a near-total economic embargo adopted in 1950, at the start of the Korean War. Over the years, some sanctions were eased and others added, including after the cyberattack on Sony Pictures in 2014 that Washington attributed to the North.

The United Nations Security Council did not impose sanctions until July 2006, when, after a series of missile tests, it banned countries from selling material for missiles or weapons of mass destruction to North Korea.

The North detonated its first nuclear device months later, followed by additional tests in 2009 and 2013, and two in 2016. The Security Council tightened sanctions after each test, as well as after a satellite launch in 2013. It targeted military supplies and luxury goods, shut Pyongyang out of the international financial system and, most recently, banned a range of mineral exports.

But loopholes abound. Resolutions called for searches of vessels carrying cargo to North Korea but have failed to stop its use of ships sailing under foreign flags. And when the Security Council banned its top export, coal, China insisted on an exception for transactions judged to be for “livelihood purposes.”

New measures seek to limit North Korea’s ability to make money through its embassies. In Berlin, for example, the authorities are closing a hostel run out of former diplomatic quarters. But the North has responded to…

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