Chinese and U.S. officials are said to be investigating a Chinese business with ties to North Korea.

The business is suspected of helping the North Korean government avoid international sanctions. Those measures are meant to punish the North for seeking to expand its nuclear weapons program.

Liaoning Hongxiang Group is a large conglomerate, made up of many companies. It operates six companies that reportedly sold aluminum bars and chemicals to North Korea. Experts say the bars and chemicals have possible military uses.

Coal brought from Siberia is ready to be loaded onto a ship bound for China in the North Korean special economic zone of Rason.

The companies are suspected of operating 10 ships involved in North Korea's mineral trade, including coal. They also operate a hotel linked to a group of North Koreans who attack computers overseas.

Go Myong-Hyun is a researcher with the Asan Institute for Policy in Seoul. He said the companies "are actually selling to the North Koreans dual use goods, which are explicitly forbidden by the United Nations sanctions."

Go is one of the writers of a report about Liaoning Hongxiang Group and its activities in North Korea. The Asan Institute released the report on Monday.

Chinese business group linked to banned trade

The researchers studied blacklisted individuals and companies. They said private businesses like Liaoning Hongxiang Group helped companies on the United Nations sanctions list do business in North Korea.

The value of the trade between the conglomerate and North Korea is estimated to be over $500 million. The report said the trade could provide financing for the North's nuclear development program.

Part of the conglomerate, Dandong Hongxiang Industrial Development Co., imports almost all of its goods from North Korea.

The report also points to satellite pictures of a ship linked to the group at a North Korean port where coal and iron is exported. Most mineral exports from the North are banned under U.N. sanctions. However, trade in coal or iron not linked to government organizations is permitted as a humanitarian exception.

A company linked to Liaoning Hongxiang Group has ties to a hotel suspected of being the base for a North Korean cyber-attack group.

The Wall Street Journal newspaper reported Monday that police in China's Liaoning province are investigating the conglomerate.

The Asan report says Liaoning Hongxiang Group also has done business with at least 15 American companies. Lawyers with the U.S. Department of Justice visited Beijing last month to discuss possible legal action against the group.

North Korea has continued its nuclear and long-range missile programs in violation of strong U.N. sanctions.

On September 9th, the country carried out its fifth nuclear test, the second this year. And on Tuesday, North Korea's state media reported that a test of a new rocket engine was successful.

The reports said leader Kim Jong Un ordered preparations for a satellite launch as soon as possible.

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Words in This Story

sanctions – n. measures against a country to cause it to obey international law

conglomerate – n. a large business that oversees a number of other companies often in different kinds of industries

allegedly – adv. said to have happened, but not yet known

forbidden – adj. not allowed

blacklisted – adj. placed on a list of people or groups that should be avoided