International sanctions currently in force prohibit the export of apparel manufactured in North Korea. However, recent reports suggest that clothes manufactured in North Korea’s city of Sinuiju are being smuggled to China and from there, exported to South Korea.
“Shipments of clothing worth around 500,000-600,000 KPW are being processed in Sinuiju for shipment to Dandong in Liaoning Province,” a source in China familiar with North Korean affairs reported to Daily NK.
“The Chinese side provide high quality fabric to the North Koreans, who produce the clothes and send them back to China where labels are added before being shipped to South Korea.”
It appears that a South Korean clothing company has contracted out production to a manufacturer in China and the Chinese company has in turn outsourced the work to a North Korean company.
According to the Korea Trade-Investment Promotion Agency’s (KOTRA) report “Trade Trends in Apparel Outsourcing Processes between North Korea and China” published in August last year “apparel exports comprise 34.1% of North Korea’s total exports to China, which is a high proportion […] considering that North Korea cannot independently export apparel due to deficiencies in its textile manufacturing industry, it can be presumed that most of the exported apparel is comprised of imported textiles.”
In response to North Korea’s sixth nuclear test in 2017, UN Security Council Resolution 2375 imposes a complete ban on North Korea’s textile exports including fabric, partial or completed apparel. Therefore, if such reports are true, the Chinese companies involved are in violation of the sanctions.
This is not the first time where North Korea has attempted to bypass sanctions. In 2017, the US State Department issued a “North Korea Sanctions & Enforcement Actions Advisory” stating that North Korea has been receiving subcontracts from third parties, and obscuring the country of origin prior to export.
The most recent UN Panel of Experts report cite revealed extensive sanctions violation and evasion activity by North Korea and foreign intermediaries.
In October last year, Daily NK reported that the Chinese authorities intercepted a Chinese smuggling ship loaded with sanctioned goods including apparel and electronic appliances from Sinuiju, heading for China.
A separate source in China noted that this time North Korea used the same trick to bypass the sanctions, adding that Chinese and North Korean traders are often trading sanctioned goods at sea.
“They transfer about 300 tons per transaction but this is considered a small amount…There’s a break for ten days every month because of the tide,” he said.
“The profit is divided four ways with the North Korean side, the Chinese company, someone responsible for watching things over from China, and the North Korean border unit each receiving 25%.”
*Translated by Yongmin Lee
