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North Korea finding new ways to evade sanctions, secret U.N. report reveals

Trump in Vietnam for North Korea summit

North Korea is using increasingly sophisticated technology to evade sanctions while continuing to raise money by selling arms to Syria, according to a confidential United Nations report obtained by CBS News.

The 67-page draft document was assembled by experts for the U.N. Security Council's sanctions committee and circulated to members at the end of January. It's expected to be finalized and possibly made public in early March after President Trump returns from his summit with North Korean leader Kim Jong Un in Vietnam, according to a diplomatic source. The source said the findings in the draft are not expected to change but recommendations and annexes will be added in the final version.

Mr. Trump landed in Hanoi on Tuesday and is set to meet with Kim on Wednesday for their second summit in eight months.

The U.S. and the Security Council have for years pressured North Korea by sanctioning virtually every sector of its economy, but "financial sanctions remain some of the most poorly implemented and actively evaded measures of the sanctions regime," the report found.

Over the last year, the report notes "a massive increase" in illegal purchases of oil and coal on the high seas by North Korean ships in disguise.

North Korea's financial deceptions seem to have ensnared the U.S. financial system as well. The report says North Korea duped an unidentified U.S. bank into unwittingly helping to finance payment for oil.

"North Korea's illicit capabilities around the world aren't getting worse. They're getting better," says Jung Pak, a senior fellow at the Brookings Institution and former senior CIA official.

"The biggest danger is that the pageantry of the summit is making it harder to punish North Korea for their bad behavior that is being downplayed amid the hoopla," Pak said. "The question is, why would North Korea change its approach if they perceive that we are willing to look the other way? North Korea is highly unlikely to abandon their nuclear program or their illicit activities, given the current context."

Since Mr. Trump's first meeting with Kim in June 2018, North Korea has continued to violate the arms embargo, the report says, particularly by arms deals with Syria. "The Syrian Arab Republic was one of [North Korea's] two most lucrative markets for arms-related goods and services" late last year, the report says.

Syrian nationals have also been "engaged in arms brokering on behalf of [North Korea] for attempted sales to a range of Middle Eastern and African States, reportedly offering conventional arms and in some cases ballistic missiles, to armed groups in Yemen and Libya."

North Korea has long employed cyberattacks to sabotage enemies and collect intelligence, but the report says Pyongyang is now using more sophisticated techniques to generate revenue for the regime. 

"Cyberattacks involving cryptocurrencies provide [North Korea] with more ways to evade sanctions," according to the report, "given that they are harder to trace, can be laundered many times, and are independent from government regulation."

Not long before departing for the summit in Hanoi, Mr. Trump said he has developed a "very interesting" relationship with Kim. "We've given up nothing," Mr. Trump said. "The sanctions are on, everything's on, but we have a special feeling, and I think it's going to lead to something very good, and maybe not. I think ultimately it will, but maybe not."

Pamela Falk contributed reporting.

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