North Korea bought at least $640 million in luxury goods from China in 2017, South Korea lawmaker says

By Hyonhee Shin

SEOUL (Reuters) - North Korea imported at least $640 million worth of luxury goods from China last year, in defiance of U.N. sanctions outlawing such trade over North Korea's nuclear and missile programmes, a South Korean lawmaker said on Monday.

The United States has urged strict implementation of sanctions as part of a "maximum pressure" campaign which Washington has credited with bringing impoverished North Korea to the negotiating table.

But there have been signs the campaign has been losing steam since North Korea suspended nuclear and missile tests and leader Kim Jong Un vowed steps towards denuclearisation at a U.S.-North Korean summit in June - and as China and Russia called for relaxed sanctions.

"Kim has bought lavish items from China and other places like a seaplane for not only his own family, and also expensive musical instruments, high-quality TVs, sedans, liquor, watches and fur as gifts for the elites who prop up his regime," opposition lawmaker Yoon Sang-hyun said in a statement.

"With the growing loophole, Kim would be able to near his goal of neutralising sanctions soon without giving up the nuclear weapons."

Last year, North Korea spent at least $640 million on luxury goods from China, according to Yoon.

China does not provide breakdowns of its customs figures. Yoon compiled data based on a list of banned items crafted by Seoul in line with a 2009 U.N. resolution.

Beijing's customs agency did not immediately respond to a request for comment. Beijing has said it strictly abides by international sanctions against North Korea.

The 2017 luxury trade volume was down from the 2014 peak of $800 million, but was only a 3.8 percent drop from $666.4 million in 2016, according to Yoon.

The luxury items accounted for 17.8 percent of North Korea's entire imports from China last year which totalled $3.7 billion, Yoon said.

Purchases of electronic products such as high-end TVs made up for more than half of the total transactions, worth $340 million, followed by cars with $204 million and liquors with $35 million.

China's trade with North Korea from January to August this year tumbled 57.8 percent from the year-earlier figure to $1.51 billion, China's customs agency said last month.

But Yoon's analysis also shows North Korea funnelled more than $4 billion into luxury shopping in China since Kim took power at the end of 2011.

Yoon accused China of loosening enforcement of sanctions, and criticised South Korea's recent request for U.N. and U.S. exemptions to restart inter-Korean economic cooperation.

When asked on Monday about the possibility of discord with the United States over sanctions, a senior official at South Korea's presidential office said the two countries would "eventually be on the same path" towards denuclearisation though there might be a "procedural difference".

Last week, Singapore charged a citizen, a North Korean and three companies with supplying prohibited luxury items to North Korea. The charges involve hundreds of thousands of dollars worth of perfumes, wines and watches, court documents seen by Reuters show.

(Additional reporting by Stella Qiu in BEIJING; Editing by Nick Macfie)