A trail of money stretching from a Panamanian shipping agent to an octogenarian Singaporean to a Chinese bank provides a window on why U.S. efforts to tighten sanctions on North Korea may be harder to achieve than in the case of Iran.
For decades North Korea has built networks of front companies and foreign intermediaries to channel currency in and out, circumventing attempts to isolate it over its nuclear-weapons program. Court documents and interviews with investigators, banks and prosecutors show the cornerstone of those networks is China.
"Its geographic proximity, the huge trade volume, having the contacts, and having the historic relationship all contribute to making China the center point for any North Korean initiative to evade international financial sanctions," said William Newcomb, a former member of a panel of experts assisting the United Nations' North Korea sanctions committee. "China is a very important piece in making sure that blockages work."