While finding itself on the list for the first time since 2008 would be painful, the sting would pale in comparison to the deep wound the People’s Republic of China has inflicted upon Pyongyang when it announced it will not be buying coal from the country for the remainder of the year. Pyongyang is overtly reliant on coal exports to fuel its economy and finance its $800 million negative trade balance, and China buys 90 percent of the North’s exports. Of course, China’s move wasn’t quite so straightforward: just before issuing the ban, Beijing openly breached UN caps on monthly coal imports and bought almost 2 million metric tons (worth $188 million), providing Supreme Leader Kim with a much-needed cash infusion. For the record, according to the latest round of sanctions, North Korea is allowed to export just $400 million worth of coal a year.
But for all the talk of sanctions and vital revenue streams evaporating, Pyongyang doesn’t seem to be taking much notice. This year alone, North Korea tested multiple ballistic missiles, threatened to break ties with Malaysia, engaged in foreign political assassinations, and continued working on its nuclear program. How is the blacklisted regime able to finance all this?
A closer look reveals Pyongyang engaging in an old con game – the Kansas City Shuffle. Coined in the 2006 movie Lucky Number Slevin, it can be summed up as “when everybody looks right, you go left.” With China’s help, North Korea’s derivation of the Shuffle has been to keep the focus on coal sanctions, haranguing the Security Council to obtain export concessions on humanitarian reasons – the so-called “livelihood clause” – while actually reaping bigger rewards from other activities. Indeed, Beijing’s decade-long game of stalling and vetoing any meaningful sanctions at the UNSC has given Pyongyang the time needed to diversify its revenue streams away from conventional sources. Via the ultra-secretive Bureaus #39 and #121, party organizations specialized in illicit activities, North Korea has managed to drastically reduce its dependence on coal exports.
A New Breed of Bank Hacks
Easily the largest operation carried out by North Korea’s secret criminal agencies has been hacking SWIFT, the industry standard allowing banks to process trillions of dollars every day in international transfers. Several reports have identified North Korean hacking group Lazarus (affiliated with Bureau #121) as complicit in high-profile breaches of the worldwide financial network. North Korea’s estimated 6,800 hackers were already bringing in $860 million in dirty money each year via fraud, blackmail, and online gambling, but the SWIFT attacks are a novelty.
The biggest hit so far allowed Lazarus to funnel $81 million from the accounts of the Bangladesh central bank held with the U.S. Federal Reserve in New York. The attack could have netted as much as $1 billion, but for the hackers’ poor spelling. The group has also perpetrated electronic heists on banks in Ecuador, the Philippines, and Vietnam. Another binary break-in at an unidentified Ukrainian bank in December left it $10 million poorer, while Russia’s central bank saw $31 million nicked and Polish banks have been the target of an extensive malware campaign meant to secure access to their accounts.
With the prospect of selling significant amounts of coal to China vanishing for the rest of the year, there’s little reason to think these cyber attacks will slow down. It’s difficult to gauge just how successful North Korean hackers have been, since SWIFT goes out of its way to reveal as few details as possible. Another factor in North Korea’s favor is that the very nature of international banking makes it impossible to block the hacking spree with UN action. While SWIFT has been leaning on its member banks to implement security measures and share intelligence about their security situation, the standard used by SWIFT is simply too old to rescue.
New Tool, Old Kit
The SWIFT attacks are the newest wrench in the Hermit Kingdom’s toolkit, but old fallbacks still pad its bottom lines. North Korea continues to engage in trafficking illicit cigarettes, pharmaceuticals, and ivory. According to a 2014 report compiled by an American human rights organization, smuggling narcotics in diplomatic bags and printing high-quality counterfeit cash has been a mainstay of the country for 40 years.
Not to say the regime has shied away from getting creative. One of its schemes for filling the financial gap consists of selling North Korean citizens into slave labor: according to human rights groups, Pyongyang has a pipeline pumping slaves into several European countries, including Poland, Malta, Germany, Italy, Austria, and the Netherlands. Though North Korean officials vehemently deny it, laborers are reportedly worked six days a week for up to 12 hours each day in shipyards, construction sites, and farms. They are paid, but up to 90 percent of their wages are sent back to Pyongyang. Though numbers are hard to come by, the best estimates have over 50,000 North Koreans working around the world, generating between $1.2 billion and $2.3 billion each year.
Another illicit revenue stream comes from selling weapons on the black market. Despite a stack of UN sanctions condemning the practice, Pyongyang has been identified by human rights groups as selling small arms to buyers in Iran and Syria. Other major buyers include the Palestinian groups Hamas and the Popular Resistance Committee (PRC), to whom North Korea is accused of selling anti-tank missiles, shipping them through Sudan or Egypt. The Namibian government openly admitted last year that Pyongyang has built arms and ammunition factories within its borders and plans to build more military infrastructure.
If history is any indication, world leaders will respond to North Korea’s latest enterprise with more of the same high-minded yet ultimately toothless resolutions against Pyongyang and its coal exports. Judging from the mountain of evidence that points to North Korea engaging in highly lucrative criminal activities that pull in billions of dollars each year, Kim Jong-un and his cronies can rest easy on a bed of their ill-gotten gains.
North Korea hails test of powerful new rocket engine
Step by step, slowly and steadily.
Si Vis Pacem, Para Perkele
I miss when North Korea were a laughing stock rather than a legitimate threat...
More like a genuinely pitied sad creature. Under the second leader was when North was hit with famines and natural disasters and therefore other people remembered the most the average North Koreans suffering under the regime and poverty.
That was also the height of mildly fruitful negotiations among North and other countries.
Beware the Crazy Man.
You know things are bad when we miss Kim Jong Il.
Final Fantasy, Foreign Policy, and Bollywood. Helluva combo, that...
I'm not sure this isn't something that wouldn't be happening under Kim-II. North Korea's basically run out of goodwill from China, which means without a credible deterrent, a "humanitarian intervention" by either the United States or China to replace the regime with one more pliable to their respective interests is going to happen sooner or later, and with every year that goes by their conventional arsenal (and thus the threat they pose to Seoul with said arsenal) becomes increasingly outdated. The possibility of a diplomatic solution seems very unlikely at this time, and a resumption of the Korean war entirely possible, especially given the Trump administration's pressing need for something to distract from its domestic failures.
edited 19th Mar '17 5:58:30 PM by CaptainCapsase
Beware the Crazy Man.
Chinese goodwill disappeared specifically due to Un's actions. His father was better at keeping Beijing happy.
Try some other theory.
Final Fantasy, Foreign Policy, and Bollywood. Helluva combo, that...
Oh, bother.
I've long thought that the main contrast between Un and his departed dad was that daddy was an evil bastard, but he wasn't completely delusional and deep down never forgot he was just a human being. I think Un honestly believes his own hype.
edited 19th Mar '17 10:06:58 PM by M84
Disgusted, but not surprised
Beware the Crazy Man.
Or he's insecure. Unlike his father, he didn't have decades to gradually take the reins from daddy (Kim Il Sung was essentially retired from the 80s til his death in 94), or build his own power base. If he had suffered a famine the way his dad did, he'd have been overthrown. He understands his precariousness and will do anything to maintain power.
Final Fantasy, Foreign Policy, and Bollywood. Helluva combo, that...
That reminds me: How many Kims are actually left that could take over after Un? His father and grandfather weren't the most healthy people and he doesn't look healthy either. I know he has at least one brother, but said brother was overlooked in the last succession because of being "unmanly", if I recall correctly.
Both health problems and Un's tendencies to prune the family tree (his uncle, his brother) might actually accelerate the end of the Kim dynasty.
edited 19th Mar '17 10:13:52 PM by DrunkenNordmann
Welcome to Estalia, gentlemen.
Oh, bother.
![[up]](https://static.tvtropes.org/pmwiki/pub/smiles/arrow_up.png "[up]"){kind=icon}
So either he's A God Am I or suffering from an Inferiority Superiority Complex and overcompensating. Great.
He has two siblings, younger brother Kim Jong-chul and younger sister Kim Yo-jong. Then there's technically his murdered brother's son Kim Han-sol, but I'm sure that bridge was burnt. His wife is also speculated to have wielded a disproportionate amount of power in the party, possibly by design.
In regards to the insanity that North Korea is blaring across the peninsula, they seem to be aiming for the simple and cruder variant of MAD. SK/US attacks them, the peninsula, China, Russia and Japan will pay for it with fallout, refugees and plenty of dead people. East Asia will be in chaos for decades.
edited 19th Mar '17 11:34:30 PM by TerminusEst
Si Vis Pacem, Para Perkele
A procrastination in of itself
Un is belvie to have a daughter and there's also the splits in the family tree to consider, Kim Il-sung had six kids, both sons from his first marriage are now dead and the status of the daughter is unknown, but the three sons from his second marriage survive from what I can tell, plus there's suspected illegitimate children on top of that.
Time have a family tree that I was able to find, but it's missing the generation born after Un, all of whom would have possible claims.[1]
Kim Pyong-il (son of the first Kim via his second wife, so half uncle of the current leader) is the North Korean ambassador to the Czech Republic and seems to now be the biggest threat to Un, he's basically been kept out of the country for years due to resembling his father (Un's grandfather).
But honestly, we don't know how many Kim's there are, we know that Un executed one uncle (the one married to his dad's sister) and his aunt (the sister I just mentioned) might be dead, but who knows the status of the other two sons from Sung's second marriage or if they have/had any descendants of their own.
![[down]](https://static.tvtropes.org/pmwiki/pub/smiles/arrow_down.png "[down]"){kind=icon}
Give a man a change to edit. 
edited 20th Mar '17 12:31:07 AM by Silasw
"And the Bunny nails it!" ~ Gabrael "If the UN can get through a day without everyone strangling everyone else so can we." ~ Cyran
You meant "resembling his father", right?
Beware the Crazy Man.
Kim Han Sol may not be so out of the picture, if Beijing has anything to do with it.
Final Fantasy, Foreign Policy, and Bollywood. Helluva combo, that...
He would be an ideal puppet, and he'd be more than willing to go along with a Chinese back purge of the guys who killed his dad with chemical weapons.....
But on the other hand, apparently his father wasn't too into the whole dictatorship (or at least the Juche crap) thing, and he's spent a lot of time abroad. So he might not be politically reliable.
Politics is the skilled use of blunt objects.
A procrastination in of itself
Considering the Chinese I wouldn't be surprised if they have one of Kim Il-sung's missing sons (or a son of one of them) hidden away somewhere, just in case.
"And the Bunny nails it!" ~ Gabrael "If the UN can get through a day without everyone strangling everyone else so can we." ~ Cyran
Or even a decent fake...
Politics is the skilled use of blunt objects.
North Korea test fires missile, explodes after seconds.
Guess we can breathe easily a bit longer, assuming they really are stupid and crazy enough to actually start a war once they got the technology.
Kalma International Airport huh?
Oh North Korea, always getting so close to looking like an actual threat only to have an Epic Fail and go back to being a joke. Guess they were lucky that missile wasn't nuclear.
edited 22nd Mar '17 12:02:50 PM by Bat178
Homicidal Editor
You know that you live in one hell of a dark time when North Korea is acting as the world's comic relief.
Only an experienced editor who has a name possesses the ability to truly understand my work - What 90% of writers I'm in charge of said.
North Korea were the world's comic relief long before this time. Take a look at some of their numerous humiliating failures in the 90's, 2000's and Early 2010's, and satire articles on North Korea before 2017. They only started to look like an actual threat this year, but have now botched it up spectacularly and are back to being the laughingstock of the world.
edited 22nd Mar '17 3:32:37 PM by Bat178
Homicidal Editor
I know that, but Un takes it to the whole new level. His father is nothing compared to him. If his goal is to surpass his father, I think that he already succeeded.
http://www.rojakdaily.com/news/article/1957/malaysian-embassy-staff-in-pyongyang-are-safe
Looks like Malaysian embassy staff are ordered to get rid of incriminating stuff.
"Exit muna si Polgas. Ang kailangan dito ay si Dobermaxx!"