North Korea defied global sanctions to earn nearly $200 million in 2017 from illicit trade in goods like coal, oil and arms, in part by borrowing tactics from the golden age of piracy, says the leader of a UN panel of experts that issued a report on North Korea Friday.
According to the report, despite four new sets of UN sanctions in 2017, the isolated nation has continued to earn hard currency through increasingly evasive shipping practices, like transferring petroleum from ship to ship at sea, manipulating locator signals, and changing vessel identifiers in the middle of a journey.
"It's a bit like the pirates of the 18th century," said Hugh Griffiths, leader of the UN Panel of Experts on North Korea. "They're renaming the ships. They're disguising their nationality. They're painting false names on the ships to suggest that these ships come from other countries."
The report says North Korea "is already flouting the most recent resolutions by exploiting global oil supply chains, complicit foreign nationals, offshore company registries, and the international banking system."
Griffiths told NBC News that sanctions are working, but the North Koreans are also getting smarter.
Last month, the U.S. Treasury Dept. published a sanctions advisory outlining the types of deceptive shipping practices North Korea employs and a list of the 24 tankers capable of executing ship-to-ship transfers of petroleum and other banned items. A number of those tankers feature in the new UN report.
In December, a tanker flying the Sierra Leone flag lingered in the East China Sea alongside a North Korean tanker called the Chon Ma San for an illegal ship-to-ship transfer of petroleum products. To avoid detection, the Chon Ma San's North Korean flag was painted over and the 3's in its international identification number changed to 8's.
This January, a ship-to-ship transfer of petroleum products between the North Korean-flagged tanker Rye Song Gang 1 and the Dominica-flagged Yuk Tung took place at night. The panel said the nighttime transfer shows North Korea "is adapting its evasion tactics."
Catherine Dill, a senior research associate at the Middlebury Institute of International Studies, agreed with the panel's assessment. "Part of the reason we focus on this is because ship-to-ship transfers are so dangerous," she said. "You have to have the right conditions. If you have rough seas it can be hazardous for the crew."
North Korean technicians at Syrian chemical weapons plants
The regime also benefited from military cooperation in several countries, including Syria, Myanmar, Eritrea, Sudan, and Tanzania, according to the report.
At least four groups of North Korean weapons technicians visited Syria between April 2016 and March 2017, and a UN member state reported that technicians continue to operate at chemical weapons and missile facilities in the cities of Barzah, Hama, and Adra.
During an August 2016 trip to Syria, a delegation of North Korean technical experts gave Syria special resistance valves and thermometers that the report says are "known for use in chemical weapons programs."
"When we asked the Syrian government about what all these North Koreans are doing in Syria," Griffiths said, "the Syrians told us that the only North Koreans in Syria were there to conduct sporting activities."
"We asked the Syrian government for the names, the passport numbers, the contracts of all these North Koreans and their sporting activities in Syria at this time of war. That was more than five months ago and we haven't heard back from Damascus," Griffiths added.
The UN experts are also investigating two interdicted shipments to Syria containing acid resistant bricks from the Chinese company Cheng Tong Trading Co. because a member state "had reasons to believe the consignments were related to a KOMID contract." KOMID is North Korea's primary arms dealer. The bricks aren't a banned export, but a member state pointed out that they could be used to construct the interior walls of a chemical factory.
China declined to provide the panel more information on Cheng Tong Trading, citing insufficient proof that the shipments were connected to North Korea.
As part of an ongoing arms relationship with Myanmar, the report cites evidence that North Korea sent the country ballistic missiles, rocket launchers, and surface-to-air missiles.
KOMID even hosted military technicians from Myanmar in North Korea, according to a member state. The government of Myanmar has stated that it "has no substantive bilateral relations with the Democratic People's Republic of Korea other than those related to normal diplomatic ties."
In Sudan, two KOMID operatives who were deported from Egypt in 2016 are now "the center of the new connection" between Sudan and North Korea, according to the investigators.
North Korea uses embassies as hubs for arms smuggling
The report also shows how North Korea has continued to utilize its diplomats and citizens abroad to facilitate business and to access the international financial system.
Griffiths said North Korean embassies around the world are being used to generate foreign currency for Pyongyang, "but it's more than that. We have found in our report that a whole host of North Korean embassies—in Africa, in the Middle East, in Asia-Pacific, in Europe—are essentially used as logistics hubs for sanctions evasion purposes, including arms smuggling."
In South Africa, the report identified a North Korean Embassy secretary named Ri Chang Su as the point person for North Korea's military cooperation with Mozambique.
Jon Chol Young, a North Korean diplomat based in Angola, "who had previously engaged in prohibited arms-related activities" and was featured in last year's report, is still in Angola, according to the panel.
Angola provided documentation to the panel showing that Jon's visa expires later this month, and admitted it considers the amount of North Koreans in Luanda "to be excessive in numbers," adding that it would work with North Korea "to gradually reduce it."
Several countries were also slow to implement a 2016 UN Security Council resolution mandating that member states prohibit North Korea from using its embassies' property for non-diplomatic purposes.
The panel is actively investigating alcohol smuggling out of North Korea's diplomatic properties in Pakistan, where Reuters reported in November that a North Korean diplomat's Islamabad residence was robbed of thousands of bottles of wine, liquor, and beer.
In Germany, a hostel located at the North Korean Embassy in Berlin is still operating.
After the German Foreign Ministry stepped in last spring, the Embassy finally terminated City Hostel's lease, but the hostel refused to vacate the property, and announced in May that it had stopped paying rent to the North Koreans.
Web history from the Internet Archive shows that the hostel has been located on the Embassy's grounds since at least 2008.
Officials from the German Foreign Ministry said the hostel's continued use of the property is the subject of a legal dispute, but couldn't comment any further. The director of City Hostel was unwilling to answer to answer questions and hung up on NBC News.
Griffiths acknowledged that a number of countries — particularly in Africa and Asia — made strides in their sanctions implementation, but said, "The bottom line in our report is that in order to denuclearize the Korean peninsula, member states have more work to do, and some of the member states named in our report have to do more work than others."