More recently, North Korea's nuclear program and human rights have come under tighter sanctions.
"In fact, many of the country's human rights abuses underwrite its weapons program including forced labor, through mass mobilizations, political prisoners and overseas labor contracts, and food distribution policies that favor the military and lead to chronic malnourishment among its citizens," said Tom Malinowski, assistant U.S. secretary of state for democracy, human rights and labor. Both Malinowski and Kirby made the comments last week at the Center for Strategic & International Studies in Washington.
The Obama administration, meanwhile, believes it must address both Pyongyang's nuclear ambitions and human rights violations that have received more attention since the groundbreaking U.N. investigation. The report by the U.N. commission of inquiry accused the North Korean government of multiple offenses against its citizens, and concluded "the gravity, scale and nature of these violations reveal a state that does not have any parallel in the contemporary world."
And one key nation in the cross hairs of security and human rights is China, by far North Korea's largest financial ally. China has long sought engagement with North Korea. But Pyongyang's recent activity is testing its relationship with Chinese leadership.
China provides North Korea with the "lion's share" of financial access, said Daniel Glaser, assistant U.S. treasury secretary for terrorist financing. He made the comments in January 2015 at a House Foreign Affairs Committee briefing on North Korea's potential cybersecurity threats after the Sony data breach in 2014.
Read MoreTargeting North Korea's financial allies
On Thursday, the U.S. and China agreed on a draft resolution that would expand U.N. Security Council sanctions against North Korea, diplomats told Reuters.
"I think the Chinese are very frustrated with Kim Jong Un's behavior," Victor Cha, a longtime Korea watcher, told CNBC.com. "They don't want the regime to collapse. Saying they're caught between a rock and a hard place would be underestimating how difficult it is for them," said Cha, senior advisor and Korea chair for CSIS.
The North's economy has actually expanded under Kim — a young ruler who has been in power for roughly four years. And that's mainly due to the influx of Chinese currency.
Most average North Korean citizens rely on large black markets as a key source of food and other staples including rice, beer and school supplies. Some markets are quite large and have become fixtures in the economy. In open markets, people use Chinese yuan for transactions.
"The [North Korean] economy has grown, but that is not a function of reform," said Cha, a Georgetown University professor. "That's largely a function of Chinese money."