Ghost companies set up in international tax havens could be sheltering the North Korean regime's fortune, an investigation by South Korean journalists suggests.
The Korea Center for Investigative Journalism (KCIJ) has identified four shell companies that it believes are linked to Pyongyang. All based in the British Virgin Islands, one is registered to a North Korean address and the others have names related to North Korea.
While there is no confirmation that the companies are tied to the North Korea regime, the KCIJ's report has prompted speculation that they could be tools for managing the slush fund accumulated by former North Korean leader Kim Jong Il, who was long been suspected of stashing his wealth overseas.
Alternatively, the shell companies may have enabled North Koreans to evade the international financial sanctions that are supposed to prevent money-laundering and stymie trade.
North Korea is the most heavily sanctioned nation in the world, with the state bank the main target of the latest round of United Nations sanctions passed in February. Even though embargoes apply mostly to what governments call "dual-use" products, or products that can be used for both civilian and military purposes, legitimate businesspeople avoid North Korea altogether because of its stigma.