Two North Korean businessmen who evaded international sanctions in the Democratic Republic of Congo won more government contracts than previously understood, according to new information reviewed by The Sentry.* Their company, Congo Aconde, had wider access to US dollars through a local bank as they undertook public works projects in at least three provinces in the DRC.* The findings also suggest the pair had closer connections to Pyongyang than first thought. In addition, the two men likely worked in the DRC on behalf of a little-known North Korean government design firm, Korea Paekho Trading Corporation.
These revelations, as well as indications that Korea Paekho Trading Corporation affiliates have operated throughout West and Central Africa, raise significant questions about the enforcement of sanctions on North Korea. In particular, they demonstrate how North Korean actors exploit weak institutional controls and jurisdictions with high levels of corruption, a model other sanctions busters have followed. In the case of the DRC, due diligence shortfalls across private and public institutions may create systemic risk for an economy that relies heavily on access to US dollars through relationships with international banks.
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In order to ensure the effectiveness of institutions at the front line of sanctions enforcement in the DRC and beyond, governments, multilateral bodies, and global banks must provide relevant assistance while also acting against the type of opportunism outlined in this report. In particular, the United States, the Financial Action Task Force (FATF), and global banks should help the Congolese government and local banks improve their ability to tackle illicit finance, in addition to providing support more widely on the African continent.
This alert expands on The Sentry’s August 2020 report “Overt Affairs,” which you can find here.