North Korea-China rail revival fuels trade surge, sanctions evasion attempts

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A cargo truck is crossing over the Yalu River from Sinuiju, in North Korea’s North Pyongan Province, to Dandong, in China’s Liaoning Province, on a steel bridge known as the Sino-Korean Friendship Bridge.
A cargo truck is crossing over the Yalu River from Sinuiju, in North Korea’s North Pyongan Province, to Dandong, in China’s Liaoning Province, on a steel bridge known as the Sino-Korean Friendship Bridge. (©Daily NK)

Goods ranging from manufactured products to agricultural produce are moving through the newly resumed North Korea-China passenger rail service, with North Korean trading companies also attempting to use the route to export items banned under United Nations sanctions.

According to a Daily NK source in China, more than 80% of passengers aboard the international service are Chinese — businesspeople, traders, and ethnic Korean Chinese. Ordinary North Korean people are virtually absent from the passenger rolls, a reflection of the regime’s strict controls on both domestic and international movement. North Korean trade representatives, select party officials, and diplomatic personnel account for most of the North Korean passengers traveling between Pyongyang and Beijing or Dandong.

The rail link, which resumed service earlier this month after a six-year suspension tied to COVID-19 border closures, has quickly become a conduit for commercial activity. Chinese businesspeople with longstanding cooperative ventures in North Korea are traveling with product samples — bags, shoes, and similar manufactured goods — along with business plans for expanding factory operations inside the country. Traders specializing in construction materials are bringing sample catalogs featuring aluminum window frames, tiles, and interior fittings.

“The resumption of train service has caused cooperative and trade activity between the two countries to accelerate almost instantly,” the source said.

Ethnic Korean Chinese traders who ran small-scale distribution networks into North Korea before the pandemic have also welcomed the resumed service. They are reported to be carrying cosmetics, processed foods, and clothing into the country.

Sanctions-listed goods moving through loose customs checks

North Korean trading companies are moving in the opposite direction, rushing to export goods into China via the passenger trains. Agricultural products — red beans, sesame, perilla leaves, bracken fern, and pine mushrooms — make up the bulk of what is currently being exported. North Korean agricultural products had previously moved through border regions into China; the rail resumption has now opened an additional export channel.

The export of North Korean agricultural products is explicitly prohibited under U.N. Security Council Resolution 2397, adopted in December 2017. Despite this, such goods are reportedly marketed openly in Chinese markets as pesticide-free, organic products.

Beyond agricultural goods, some North Korean trading companies are also reported to be attempting to export high-value minerals, including gold, through the passenger rail route. The export of North Korean minerals, including gold, is banned under U.N. Security Council Resolution 2270. Nevertheless, the source said companies are actively planning to use the passenger service to move these sanctioned items.

The appeal of the passenger rail route lies in its comparatively relaxed customs inspection procedures. Cargo freight trains are subject to more rigorous screening; passenger trains, at least for now, are not.

“Customs inspections on the passenger trains will likely be tightened going forward, but for now, sanctioned goods are moving through relatively easily,” the source said. “Companies are treating this as an opportunity to move items that were previously difficult to export.”

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