DANDONG, China — Cai didn’t know what he was bringing into North Korea, and he didn’t dare ask.
Whenever the 49-year-old truck driver crossed the bridge into North Korea, the cargo was carefully wrapped so he couldn’t see what was inside.
For all he knew, the packages contained agricultural tools, baby clothes, umbrellas, food, rice cookers or toaster ovens. Or they might have contained materials for making nuclear bombs.
His boss was a well-dressed, well-spoken woman, Ma Xiaohong, who he said “had a special connection with the Chinese government.”
“I started to suspect she was doing illegal trading,” said Cai, who asked to be quoted by only his surname because of the sensitivity of the situation. After six months driving in 2015, he quit.
His suspicions were confirmed when Ma and three associates were indicted in September in U.S. District Court in Newark, N.J., on charges of conspiracy to evade sanctions against North Korea.
Her company, Dandong Hongxiang (the latter part of the name translates to “Flying High”), at one point handled an estimated 20 percent of North Korea’s trade with China, according to company documents filed with the court.
Ma since has disappeared and is unlikely to stand trial, given the lack of an extradition treaty with China, but the charges have effectively closed her operation.
Borrowing a technique used against suppliers to the Iranian nuclear program, the U.S. government filed an unusual petition seeking forfeiture of at least $1.9 million from an affiliated company, Mingzheng International, through Chinese banks that do business in the United States.
“It is a novel approach that underscores the U.S. commitment to target the illicit North Korean trade,” said Aaron Arnold, a former adviser to the FBI on nonproliferation, who refers to the tactic as “weaponizing the courts.” While the U.S. government previously has been reluctant to go after Chinese companies and banks for fear of retaliation against U.S. companies working with China, he said, that has changed. “Now, from what I understand, the gloves are off.”
The case is likely to be a template for future government action against North Korea with the hope that lawsuits and sanctions — a safer course than military action — can slow the North Koreans’ completion of a weapon that can reach the United States. The Trump administration has been scrambling to respond to North Korea, which since June has conducted two tests of intercontinental ballistic missiles capable of reaching the United States.
A tough new sanctions resolution unanimously approved Aug. 5 by the U.N. Security Council bars North Korea from exporting $1 billion of its most profitable commodities, including coal. On Monday, China announced that it would ban imports of North Korean coal, iron and lead ores, and seafood, beginning Sept. 5. Yet, as with past sanctions, their bite will depend on how thoroughly the Chinese enforce them.
In the past, sanctions have been largely ineffective because they targeted only North Koreans, not Chinese and others — such as Malaysians and Singaporeans — who have helped North Korea buy what it needs.
“The Chinese economy is a globalized marketplace. Anything the North Koreans want, they can procure within the Chinese market,” said John Park, an expert in Chinese-North Korean trade at Harvard University.
China accounts for 90 percent of North Korea’s trade volume. Dandong looms large in this equation. The city of 2.4 million is the largest on the 850-mile border between China and North Korea and was the crossing point when Chinese communist troops came across the Yalu River during the Korean War.
Like other Chinese cities today, it has been transformed by a pell-mell of glitzy high-rises and shopping malls. It draws Chinese tourists who stroll on a riverfront promenade, gawking at a country across the way that looks frozen in an earlier era — with dingy mid-rises, a few rusty cargo ships, a Ferris wheel that never revolves. Visitors buy nostalgic souvenirs, North Korean currency, traditional North Korean dresses and North Korean liquor, beer, pickled eggs.
But that’s only for the small players. The serious trading is carried out by large government-owned North Korean trading companies that operate with greater sophistication. North Korea “is flouting sanctions through trade in prohibited goods, with evasion techniques that are increasing in scale, scope and sophistication,” reported the U.N. Panel of Experts, which oversees the enforcement of sanctions against North Korea. The panel said that North Korea is “using agents who are highly experienced and well-trained in moving money, people and goods, including arms and related materials, across borders.”