The United Nations Security Council is preparing to vote Monday on new sanctions against North Korea, but the sanctions have reportedly been watered down substantially, removing provisions that could have frozen leader Kim Jong Un‘s assets abroad. And one South Korean banker believes those assets could amount to as much as $5 billion.
This “revolutionary fund” is held under pseudonyms in accounts in Switzerland, Hong Kong, and the Middle East, according to Cho Bong-hyun of Seoul’s Industrial Bank of Korea. Cho told Japan’s Asahi Shinbun that the fund has been developed and used by multiple generations of North Korean leadership. Those uses have allegedly included luxury goods, both for the ruling Kim family and for favored North Korean officials, with hundreds of millions of dollars spent each year. A division of the North Korean Workers’ Party known as “Office 39” is reportedly tasked with raising and managing the funds. The recent WannaCry ransomware attack may have been a bungled North Korean fundraising effort.
The secret funds could amount to 17% of North Korea’s annual economic output, which was estimated at $28.5 billion in 2016. That’s a pittance by global standards, trailing not only South Korea’s $1.34 trillion GDP, but also the Democratic Republic of Congo, Costa Rica, and every individual U.S. state.
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North Korea’s GDP may already be sinking further thanks to an earlier round of sanctions, which banned as much as $1 billion worth of the country’s exports. That makes funds abroad even more precious to the regime, both for governance and, potentially, for the continued development of nuclear weapons. North Korea’s nuclear program was the immediate trigger for the new sanctions, but the asset freeze was reportedly removed to ensure Russia and China would not block the proposal.
A North Korean statement threatened the U.S. with “the greatest pain and suffering it has ever gone through” if the sanctions passed, before news emerged that the asset freeze had been rolled back.