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The North Korean restaurant accused by a think tank of using software sales to bypass sanctions



Inside, waitress meander about serving cold noodles and kimchi to customers. However, online records show the restaurant could also be a cover for a company selling high-tech facial recognition software.

"Our understanding is that programmers who work abroad are generating as much as hundreds of thousands of US dollars for the regime every year, so they have a disproportionate capacity to raise funds overseas, "said Jason Arterburn, an analyst specializing in North Korea and China at the Center for Advanced Defense Studies, which is better known by its C4ADS acronym

Furthermore, experts warn that North Korean software designers who create and sell these products online could be building hidden back doors for Pyongyang's well-trained hackers to exploit

Profits through software

North Korea is barred from selling arms abroad – that country is still trying to do so – but it is not clear if high-tech software that is not used for military purposes is subject to that arms embargo.

Facial recognition software could provide a loophole in existing sanctions that seek to limit Pyongyang's ability to make money overseas.

"(Information technology) services are not covered by United Nations sanctions," said Cameron Trainer, an analyst studying North Korean illicit finance at the James Martin Center for Nonproliferation Studies (CNS). "It's still a way North Korea can buy a currency that is then funneled to its nuclear program."

The UN Panel of Experts' annual report alleges that North Korea's operations abroad are meant to escape sanctions and earn money for the country to contribute to North Korea's bottom line.

Experts say the Hanoi restaurant's alleged software sales raise concern that other North Korean restaurants around Asia could also be used to sidestep sanctions. Police and investigators usually detect sanction evasions at points of entry, like harbors. Customs Lopez, a former member of the UN panel charged with investigating North Korean sanctions enforcement and efficacy, said officials from countries in the region did not track online sales software. "

" And that, I think, is, "said Lopez.

" And that, I think, is

The 'Future Tech Group'

The link between the restaurant in Hanoi and the sales of high-tech software was detailed in the report by Arterburn at C4ADS.

19659015] Both the C4ADS and the CNS found that a software company called Future Tech Group had ties both to the restaurant and a mysterious Malaysian company called Glocom, which the UN has long said North Korea has used to conduct illicit arms sales. The Future Tech Group

Future Tech Group appears to have removed its website, but a cached version shows the company's advertised face recognition
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That's how Future Tech Group and Glocom appear to be connected. However, Future Tech Group's connection to the restaurant in Hanoi is a bit more complex

Vietnamese business records list and North Korean national named Kim Jong Gil as the owner of a catering and restaurant company in Vietnam called Mudo Vina. It is the same street address as Koryo Restaurant in Hanoi.

Kim is tied to the Future Tech Group through a series of online profiles for software experts, Arterburn explains. The profiles appear on various freelancer websites, where the users advertise themselves as software developers and facial recognition software experts. The profiles used variations of the username kjg197318. Kim Jong Gil was born on 01/08/1973, according to Mudo Vina's Vietnamese business filings. Some of the freelance profiles included work samples that were found on the cached website of Future Tech Group, Arterburn said.

"Essentially, what we see is that owners registered at the restaurant address also appear associated with freelance profiles used to sell advanced facial recognition technology to clients around the world, "Arterburn said.

" We feel with pretty high confidence we were looking at agents within the same network engaged in a range of commercial activities, including both North Korean restaurants in Vietnam) and high-tech technology sales. "

CNN visited the Koryo restaurant in March and an employee confirmed that Mudo Vina owned the restaurant.

"Software doesn 't say whether Kim Jong Gil worked there

" Software doesn' t say that the software was being sold on the premises, but that did not mean it was not happening, "

'The most visible part of a larger, syndicated structure'

On the surface, you have to be physically handed over, it can be produced in remote locations and you would not really know it. it does not make sense to house a restaurant and a facial recognition technology company under the same roof

But analysts say the move fits North Korea's tendency to group multiple businesses together. Arterburn said it was helpful to understand such restaurants as "overseas commercial outposts" rather than just places to eat

"It makes sense that they would house a number of commercial activities in the same location," he said. ] UN sanctions imposed in 2017 are supposed to effectively shutter these restaurants. Countries were supposed to bar North Koreans from working abroad and banned North Korean joint ventures or cooperative entities from operating in foreign countries, but the Koryo restaurant in Hanoi remains open. Vietnamese Ministry of Foreign Affairs

North Korean restaurants are some of the country's best-known exports abroad, especially in China and Southeast Asia, despite the sanctions. There are dozens in Asia, with the majority in China, according to experts.

They are popular with tourists because they provide a rare opportunity for people to interact with North Koreans, as the vast majority of people inside the country are barred from leaving.

Most of the waitresses at the restaurants are women who are trained performers and musicians. They are selected for their talent, looks and regime loyalty, according to many North Korean defectors.

But these establishments pose legal and ethical dilemmas for the countries that allow them on their soil – and the customers who dine there

Pyongyang has been accused of treating its overseas workers as slaves, restricting their freedom of movement and

Many defectors, however, say that waitresses abroad have better lives than they would back home.

But the fact that the Hanoi restaurant remains open highlights the limitations of the UN's control over North Korea's over-indebtedness, assets around the world.

Lopez, the former UN investigator, said regulators were concerned about what he called "the law of numbers."

One North The Korean restaurant may not make that much money, even if it could be a front for more lucrative – and potentially illegal – dealings.

"This is the most visible part of a larger, syndicated structure in which not only citizens are repatriating money, but the enterprise that they are part of has also other tentacles and is helping "It is a growing monster."

"If this is the only part of this you see, you better cut it off right away and see where the other parts are, because it's a growing monster."
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