February 24, 2024
Analysis

What the Panama Papers tell us about the North Korean economy

Willingness to violate sanctions shows how tempting mining is to potential overseas investors

An investigation by the Australian Broadcasting Corporation (ABC) has led to a report that two Australian businessmen are linked to companies striking mining deals with North Korea. The two Australians have been identified as David Henty Sutton and Louis Schurmann. These efforts by Australian investors seeking access to North Korea’s mining sectors have been known of since 2012. According to a former UN official and the ABC report, these acts warrant an investigation for potential breach of sanctions.

This is because the North Korean mining sector is subject to specific UN sanctions. Complementing the efforts of the UN, the United States Treasury Department also has sanctions on the mining industry. The rationale behind these sanctions can be understood in terms of the role of mining in the North Korean economy. As many North Korea watchers and analysts have reported, there are elements of a free market within that country. However, the development of open trading has not occurred in an even manner. This is due both to how the government of Pyongyang maintains control over key industries and to the famine of the 1990s.