It was May of last year when Lucas Kuo and Lauren Sung noticed something strange: more than 100 ships gathering in the waters near Haeju, North Korea.
As part of their work at the Washington-based Center for Advanced Defense Studies (C4ADS), a nonprofit that analyzes and investigates security issues using big data, the two analysts keep an eye on traffic in North Korean waters and further afield in Northeast Asia.
They do this because Pyongyang has been accused of selling coal and other valuable goods, sometimes in very big quantities, on the high seas to get around the prying eyes of customs officers, who must enforce United Nations sanctions on North Korea. Instead of moving goods into a port before trading, North Koreans supposedly just move them from one ship to another at sea and lie about their origins.
These “ship-to-ship transfers” can rake in tens of millions of dollars for Kim Jong Un’s cash-strapped regime, depending on what’s sold.
They are meant to be fast and discreet, and usually involve a few ships at most. But Sung and Kuo kept seeing dozens of ships mysteriously sailing to North Korea.
What Kuo and Sung went on to discover was a massive operation allegedly worth millions of dollars involving 279 ships which appeared to be skirting international sanctions on North Korea.
But these ships weren’t being used for running guns, dealing drugs, offloading counterfeit cash or trafficking endangered species, crimes North Korea is notorious for worldwide. They weren’t even carrying coal, Pyongyang’s most profitable export.
They were being used to dredge and transport sand. That may seem innocuous, but North Korea is barred from exporting earth and stone under United Nations sanctions passed in December 2017. Trading North Korean sand is a violation of international law.
Despite those measures, North Korea raked in at least $22 million last year using “a substantial sand-export operation,” UN investigators said in a report released in April. One unnamed country supplied the Panel of Experts on North Korea, as the investigators are formally known, with intelligence claiming that Pyongyang sent one million tons of sand abroad from May 2019 until the end of the year.
The scheme was prominently featured in the panel’s annual report. Alastair Morgan, who coordinates the UN panel that monitors sanctions on North Korea, said in an email that the report’s authors decided “the large scale and the significance” of the operation warranted top billing.
The UN report didn’t cite C4ADS’ data. Morgan said his team submitted their draft in February, before Kuo and Sung published their research in March.
Kuo and Sung watched the ships for several weeks before noticing a pattern. All of those showing up in North Korean waters had a link to China. Some were flying Chinese flags. Others had Chinese names.
Ship-to-ship transfers usually involve vessels registered to small countries where regulation is cheap and oversight is lax — boats flying a so-called flag of convenience.
But maybe these weren’t ship-to-ship transfers, the pair thought. They realized they needed more information before they could come to any conclusions.
So they turned to satellite imagery, perhaps the most important tool among the growing open-source intelligence community. The photographs they got their hands on showed clouds of sand under what appear to be dozens of barges and dredgers, evidence that earth was being pulled up from the bottom of the sea en masse in North Korean waters.
Sung did some research into North Korea’s history of sand sales and dredging, and everything quickly clicked.
“We found plenty of reports from the early 90s to the present indicating that rather than this kind of being anything new, North Korea has always been exporting sand to a lot of its neighboring countries,” Sung said.
Sung said it now appeared “there was a conscious effort to do this under the radar.”
Neither Sung or Kuo knows what happened to the million tons of sand after it was shipped to various Chinese ports across the country’s coast. Sand smuggling is a major issue in China and the trade is notoriously opaque.
Modern civilization is built on different types of sand. It’s a key ingredient in concrete, glass and even the processors that power the electronic device you’re reading this on. Humanity consumes about 50 billion tonnes of sand per year — more than any other natural resource on the planet except for water.