North Korea avoids customs duties through state-sponsored smuggling

State-sponsored smuggling remains prevalent in the border regions as the authorities look to secure much-needed foreign currency. The country remains under international sanctions imposed in response to the regime’s nuclear and missile development programs.

“The trading departments in rural areas have permission from up the chain of command to engage in smuggling because revenue is so low through official customs trade routes,” a source in Ryanggang Province close to the operations told Daily NK on August 14.

“Smuggling operations typically involve at least one North Korean customs worker and a Ministry of State Security agent from the region,” he said, adding that other links in the smuggling chain include border guards, additional customs workers, and immigration staff, all with tacit approval by the regime to systematically engage in smuggling.

According to a soldier stationed with the border guards in Ryanggang Province, the Hyesan trade department has, on any recent given night, been smuggling through several loads of North Korean handmade straw hats.

“North Korea’s handicraft industry produces high-quality artisanal products like these hats. In return for the goods, the Chinese traders have provided cars, trucks, and small buses–sometimes even the gas too,” he explained.

As reported by Daily NK in February, North Korea’s intelligence and security agency ordered troops stationed along the Chinese border in Ryanggang Province to engage in smuggling operations following China’s official enforcement of United Nations Security Council Resolutions targeting the regime’s financial lifelines.

Ha Yoon Ah is one of Daily NK's full-time journalists. Please direct any questions about her articles to