North Korean vessels cash in on drug runs between Southeast Asia and China

North Korean vessels are reportedly generating substantial profits through illicit drug smuggling between Southeast Asia and China in 2026, according to an insider with ties to the country. "North Korean ships are transporting illegal goods from Southeast Asia to China and earning shipping fees from Chinese traders," the source claims.

Much of the cargo consists of narcotics such as cannabis and methamphetamine, along with restricted medicines and counterfeit products. Chinese smugglers predominantly use North Korean vessels to avoid inspections, owing to their proficiency in evading detection. North Korean crews typically disable their automatic identification system (AIS) or provide false ship details to circumvent surveillance.

They also employ clandestine ship-to-ship transfers during late-night hours or in challenging-to-monitor waters. This evasion strategy has been linked to circumvention of sanctions, particularly in oil and coal shipments. The absence of international monitoring has proven beneficial for Pyongyang. The UN Security Council's Panel of Experts on North Korea, which once monitored suspicious ship movements, ceased operations in April 2024 after Russia blocked its extension.

South Korea, the United States, Japan, and eight other nations subsequently established the Multilateral Sanctions Monitoring Team to fill the void. However, this group operates independently of the UN and lacks its formal authority. Once illicit cargo reaches China, it is reportedly stored in North Korean-managed warehouses approved by Chinese authorities.

These facilities are rarely subjected to inspections or control by Chinese authorities, rendering them a blind spot for law enforcement. Drug smuggling deals often result in substantial profits for North Korean crews, with a single run reportedly earning them tens of thousands of dollars. "The foreign currency earned by North Korean ships through drugs, undeclared medicines, and other illegal goods is considerable," the source notes.

Consequently, more North Korean vessels are increasingly engaged in such shipping operations. Due to the clandestine nature of these deals, North Korean crews occasionally steal cargo for themselves, disappearing before reaching the agreed destination. One such incident occurred recently when a Chinese trader lost a large shipment of cannabis worth approximately 4 million Chinese yuan (about $560,000) after the North Korean crew seized the goods and vanished.

North Korean ships typically charge around 10% of the shipment's value for their services. Since the trader was involved in narcotics smuggling, he was unable to report the theft and had to bear the entire loss. Illicit shipping has become one of the primary methods for the Kim Jong Un regime to generate hard currency despite sanctions.

Other sources of income include cryptocurrency theft by state hackers and dispatching overseas workers to China and Russia.