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.