North Korea Coal Exports Bouncing Back After Virus Lull, UN Says

(Bloomberg) -- North Korea is jump-starting the illegal export of coal after shutting down almost all shipments during the first few months of the year while it sought to block the spread of the coronavirus, according to a confidential United Nations report.

Although activity came to a near-halt between January and March, shipments of coal have resumed. Imports of goods and commodities by road and freight have also restarted, though not at pre-pandemic levels, a panel monitoring the enforcement of sanctions on North Korea said in a report to the Security Council.

North Korea “continued to flout Security Council resolutions through illicit maritime exports of coal, though it suspended it temporarily,” the panel wrote. It cited evidence from one member showing that North Korea offloaded coal in Chinese territorial waters in late March.

The regime also continued to develop its nuclear weapons program as leader Kim Jong Un's talks with U.S. President Donald Trump on curbing it have sputtered, according to the panel. It said some member states believe North Korea probably has developed miniaturized nuclear warheads for its ballistic missiles.

North Korea's economy likely managed to eke out growth last year, but Kim's decision to shut borders in January due to the coronavirus slammed the brakes on the little legal trade the state has, and could send the economy into its biggest contraction in more than two decades, according to Fitch Solutions.

Even though North Korea has so far denied having any confirmed cases. Japanese Defense Minister Taro Kono said last month that he believes the disease may be spreading there and that Kim is keeping to himself to avoid infection.

A coal ban imposed by the UN is intended to deprive the North Korean regime of the cash it needs to develop nuclear weapons, but Pyongyang rakes in hundreds of millions of dollars through illicit ship-to-ship transfers. North Korea has also likely imported more petroleum this year than allowed under United Nations sanctions.

China, which together with Russia has been calling on the UN to ease sanctions, has been accused of looking the other way on sanctions evasion out of fear that a collapse of the Kim government could trigger a humanitarian crisis that would spread over its border.

The continued development of its nuclear program includes “the production of highly enriched uranium and construction of an experimental light water reactor,” the UN panel said. Several member states told the panel that a uranium enrichment facility in Yongbyon is still operating.

©2020 Bloomberg L.P.