N. Korea's overseas financial network squeezed by US: report

North Korea's intricate overseas financial network is creaking under the strains of Washington's economic screws on the impoverished nuclear armed regime, a research report said. The United Nations, United States, European Union and several individual countries have slapped multiple sets of economic sanctions on the North for its menacing nuclear and ballistic missile programmes, forcing Pyongyang to come up with illicit ways to evade them. The North operated a complex offshore financial network to maintain the flow of hard currency, said a report by Washington-based security research group C4ADS and the Sejong Institute in Seoul. But doing so meant Pyongyang had lost control of its assets, it added. "By nesting its illicit activity in its overseas networks, North Korea has maintained its access to the international financial system, but its assets are inherently vulnerable," the report said. The report, citing findings by the US Department of Justice, said a network of China-based firms had raked in billions of dollars for the North Korean regime for years through the coal trade -- with Washington estimating 95 percent of the funds were probably funnelled to the weapons programme. From 2013 to 2016, four Chinese companies -- Dandong Hongxiang Industrial Development Co. (DHID), Dandong Zhicheng Metallic Material Co. Ltd (DZMM), Dandong Tianfu Trade Co., and Jin-Hou International Holding Co. Ltd. -- accounted for 30 percent of the North's coal exports, the report found. "During this four-year period, these imports would have provided an estimated $1,331,024,223 to the North Korean military and WMD program," it said. DZMM -- the top importer of North Korean coal to China from 2014 to 2016 -- followed the general business pattern of "moving coal out of North Korea and moving illegal goods -- including military munitions and items -- into North Korea", it added. But the North's strategy of offshore finances may backfire in the face of stronger sanctions. Washington has been filing civil forfeiture complaints against funds held by North Korea-linked companies since September last year and confiscated $84 million from DHID funds across 25 bank accounts and 12 banks alone. "The Department of Justice's seizures since September 2016 amount to three times what was frozen in 2005 from Banco Delta Asia," the report said. The US Treasury Department placed restrictions on the Macau-based institution in 2005 under suspicions that it was laundering millions for North Korea. The Macau government subsequently froze roughly fifty accounts held in the bank by Pyongyang.