Due to extensive international sanctions, North Korea's official exports are heavily restricted and limited primarily to China. However, the country also exports a significant amount of goods illicitly by evading sanctions.
Officially recognized exports (primarily to China) Based on trade data for May 2025, the Observatory of Economic Complexity (OEC) reports that
North
Korea's official top exports to China were:
· Fake hair: This
includes wigs, false beards, and eyelashes, and is a major export product for
generating foreign currency. Sanctions classify these as "light
industrial," making them a loophole for the regime.
· Ferroalloys: These
are iron alloys used in manufacturing.
· Prepr binder for foundry: A preparation used for creating industrial molds.
Illicit
and potentially sanctioned exports
Experts
and reporting from 2025 also indicate that North Korea exports many goods that
violate international sanctions, often using sophisticated methods to conceal
the transactions. These include:
· Minerals: Natural
resources like coal, magnesite, zinc, and iron ore.
· Weapons and military
equipment: North Korea has a history of illegally exporting arms,
including large-caliber artillery, missiles, and related parts.
· Textiles and
machinery: Some reports highlight the export of textile products,
machinery, and electrical devices, which are prohibited by UN Security Council
sanctions.
· Cyber-activities: The
regime's state-sponsored hackers steal cryptocurrency and other financial
assets, effectively functioning as an illicit export of services to generate
revenue.
· IT services: North Korean IT workers abroad generate revenue that is channeled back to the regime.
Methods
of sanctions evasion
To
continue its exports despite sanctions, North Korea employs multiple
strategies:
· Using front and shell
companies to conceal the true origin and destination of goods.
· Illicit ship-to-ship
transfers at sea to move goods like coal and petroleum without using
official ports.
· Manipulating shipping
information using GPS spoofing and fake registrations to disguise maritime
activity.
· Exploiting
loopholes in international law, as seen with fake hair products, which
fall outside some specific sanctions.
· Leveraging lax enforcement by some countries, particularly Russia and China, which allows for more overt trade.
Due to extensive international sanctions, North Korea's official exports are heavily restricted and its main reported legal trade is limited to a small number of goods. However, the country engages in significant illicit export activities to generate revenue. China is by far its most important trading partner for both legal and illegal trade.
Reported
legal exports (primarily to China)
Based
on trade data for 2025, North Korea's legal exports are centered on a few
commodities.
· Fake hair: This
includes wigs and other hair products.
· Ferroalloys: These
are iron alloys used in the production of steel.
· Binders for foundries: This refers to materials used in metal casting.
Illicit exports
North
Korea conducts a wide range of illegal export activities to circumvent
sanctions and fund its military programs.
· Munitions and
arms: The country exports large quantities of artillery, rockets, and
other military equipment, primarily to Russia as of 2025.
· Cybercrime: State-sponsored
hackers steal cryptocurrency and engage in ransomware attacks to generate
illicit revenue.
· IT services: North
Korean IT workers are dispatched abroad to generate revenue for the regime.
· Minerals and other
sanctioned goods: Despite UN bans, North Korea illegally exports goods
like minerals, textiles, and seafood. A Chinese firm was found to be openly
promoting listings for potentially sanctioned North Korean goods as of August
2025.
· Counterfeit goods: The regime engages in the trafficking of counterfeit goods and currency.
Factors
influencing North Korean exports
· International
sanctions: The UN has implemented numerous, wide-ranging sanctions since
2006, banning or restricting exports of weapons, military equipment, metals,
seafood, textiles, and luxury goods.
· Chinese
trade: China is the primary destination for both official and unofficial
North Korean exports, making China's enforcement of sanctions the most
significant factor in controlling North Korea's trade.
· Dissolution of the UN
Panel of Experts: Russia's veto in March 2024 dissolved the UN body that
had monitored sanctions enforcement. This has allowed North Korea to increase
its illicit trade with countries like Russia.
· Third-party actors: To evade detection, North Korea increasingly relies on third-party companies, including those from China, to handle the logistics and brokering of illicit shipments.
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Comments
The UN needs to remove Russia’s veto powers in response to its continued invasion of Ukraine.
N Korea’s Nominal GDP was estimated at $32.4 billion in 2016. It appears that N Korea’s GDP is now significantly higher.
Norb Leahy, Dunwoody GA Tea Party Leader
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