North Korean trade in sanctioned goods continues with China
Despite UN resolution, coal, gold and kerosene transactions still occurring
The newest UN resolution against North Korea continued to have little effect on trade in May, with potentially sanction breaking imports and exports flowing across the DPRK’s borders, Chinese trade figures from the Korea International Trade Association show.
Previous NK News analysis on data from the first quarter of the year indicates that despite the stricter controls on iron, coal and gold exports contained in Resolution 2270, shipments of these commodities from the North to China have remained stable.
Further investigation shows that Chinese exports of kerosene to the DPRK have also continued since the passage of the resolution in March.
UN member states are currently prohibited from shipping the fuel to North Korea, as it could be put to use in the country’s weapons and missile programs.
North Korean gold, kerosene, aviation gasoline and rare earths currently bear some of the strongest trade restrictions covered in Resolution 2270.
“(All) States shall prevent the sale or supply, by their nationals or from their territories or using their flag vessels or aircraft, of aviation fuel, including aviation gasoline, naptha-type jet fuel, kerosene-type jet fuel, and kerosene-type rocket fuel, whether or not originating in their territory,” paragraph 31 of the UN document reads.
While the volumes of kerosene heading across from China are small – worth only few hundred thousand dollars’ a month – they have remained steady since the passage of Resolution 2270 and Beijing’s implementation one month later.
Figures for April show that despite the new legislation from China’s Ministry of Commerce, North Korea actually increased its jet fuel buys from China. April totals were nearly double the volumes shipped the previous month before dropping again slightly in May.
Resolution 2270 does allow North Korean civilian flights to refuel in foreign countries, however it is unclear if such refuelling would come under import and export data collected by China’s customs agency.
Figures for April show that despite the new legislation from China’s Ministry of Commerce, North Korea actually increased its jet fuel buys from China
The small volume of exports each month would also likely not constitute enough to account for Air Koryo’s (North Korea’s national airline) fuel needs.
Previous NK News investigations into the DPRK’s fuel imports noted how low North Korea’s demand for Chinese kerosene has remained in recent years. The last sizable buy was made in early 2014 and since then jet fuels have been mostly absent from Chinese customs data.
In terms of the DPRK’s non-sanctioned fuel shipments, North Korea this year continued to import relatively high levels of gasoline and diesel. Exports of both fuels increased sharply in April, to over 12,000 tonnes each, ahead of the 7th Workers’ Party Congress that took place the following month.
Exports of Chinese crude oil so far this year remain at zero, continuing a long running trend which many experts treat with skepticism.
Chinese trade figures also continued their tension with the UN’s and Beijing’s recent legislation against importing North Korean gold. Resolution 2270 makes no exceptions for some DPRK exports, including gold, titanium and rare earths.
While exports of North Korean refined gold products are zero, the data indicates that gold ore continued to move across the Chinese-North Korean border in May.
Gold ore continued to move across the Chinese-North Korean border in May
Despite shipments dropping sharply between March and April, the trade did not fall to zero. Since the passage of Resolution 2270 in March China has continued apparent monthly imports of 500 tonnes of gold ore.
This is not the same as importing 500 tonnes of refined gold, as each tonne of ore will only contain small traces of the valuable metal, but nonetheless Chinese traders still paid nearly $250,000 in both April and May for the now sanctioned commodity.
Beijing’s more pliant attitude to North Korean sanctions made headlines back in April, when it rapidly acted on UN resolutions by issuing a list of DPRK goods that were either banned or would require additional clearance to prove revenues weren’t heading to North’s weapons programmes.
The legislation targeted the DPRK’s most valuable exports, which make up a large percentage of the country’s trade revenues. If enforced, the subsequent hole in North Korea’s balance sheet would be noticeable, even to outside observers.
“If coal and iron exports were indeed cut off by China, and there weren’t easy black market alternatives to exporting those goods (not a given), then I would expect that the resulting loss of income would affect the DPRK pretty quickly, since those exports are an important part of the overall trade balance,” David Von Hippel, senior researcher at the Nautilus Institute for Security and Sustainability told NK News.
The volume of iron exports from North Korea to China increased by nearly 100 percent from April to May
So far Beijing’s trade figures show that traders have for the most part either managed to shrug off sanctions, successfully file their livelihood exceptions, or are seeing out existing contracts.
Iron traders in particular seem resistant to the new measures. The volume of iron exports from North Korea to China increased by nearly 100 percent from April to May. The jump meant that revenues from the trade also doubled to $10 million, the highest monthly figure since 2014.
The month in the which the UN passed Resolution 2270 was also the busiest on record for Chinese and North Korean coal traders. But since then, DPRK exports of anthracite have also remained at levels higher than their pre-sanctions equivalents.
China’s trade figures for coal imports in May also increased, though only by 30,000 tonnes. The small increase netted the DPRK $74 million last month, $2 million more than in April.
The figures indicate that while traders at the border will no doubt take time to work through laws handed down from the capital, the first three months of Resolution 2270 has so far had a minimal impact on North Korea’s trade balances.
- 01What to make of Kim Jong Un’s impromptu visit to Mount Paektu this week
- 02On party founding anniversary, North Korea bolsters Kim Jong Un’s leadership
- 03Fueling the country: tracking North Korea’s growing number of gas stations
- 04North Korea reinforces ideological education against “bourgeois” values
- 05“New ways of calculation”: Kim Myong Gil’s Stockholm press conference, in full
- 06The DPRK foreign ministry’s readout of Stockholm talks: key takeaways
- 07Why U.S.-North Korea talks in Sweden fell apart — and what might happen next
- 08N. Korea’s new submarine-launched ballistic missile: unpacking the Pukguksong-3