Chinese-North Korea Joint Venture Revealed to Be Circumventing Sanctions

A front-page Wall Street Jour­nal arti­cle today reported on a joint ven­ture between the Chi­nese state-owned enter­prise (SOE), Limac Corp., and North Korea’s Ryon­bong Gen­eral Corp.  It was orig­i­nally estab­lished in 2008 to mine tan­ta­lum, nio­bium and zir­co­nium, min­er­als used in the man­u­fac­tur­ing of nuclear reac­tors and mis­siles (as well as phones and com­put­ers).

Ryon­bong was sanc­tioned by the U.S. in 2005 and by the UN in 2009, both alleg­ing that the com­pany was involved in pro­duc­ing weapons of mass destruc­tion.  Only some six weeks ago, the Trump Admin­is­tra­tion added three Ryon­bong employ­ees to the sanc­tions list of indi­vid­u­als.

Limac Corp. report­edly has a U.S. affil­i­ate in Hous­ton through which it seeks “invest­ment oppor­tu­ni­ties.”  Limac man­u­fac­tures and trades nuclear-energy and other indus­trial machin­ery.  It imported Cana­dian nuclear-power equip­ment to China in 2013 via the United States, accord­ing to cus­toms records.  U.S. leg­is­la­tion report­edly requires the White House to sanc­tion enti­ties doing busi­ness with black­listed North Korean com­pa­nies — or provide an expla­na­tion for not doing so.  Accord­ing to the Jour­nal, “Ryon­bong is the trad­ing arm of a com­mit­tee in North Korea’s rul­ing party that over­sees its defense indus­try.”

This rep­re­sents another case of Chi­nese SOEs pro­vid­ing life-sup­port to the North Korean regime, this time in the very win­dow of Beijing’s pledge to tighten the screws on the North Korean econ­omy.  This raises some ques­tion about whether other undis­cov­ered joint ven­ture arrange­ments may also be presently under­way.