A Chinese man has been detained in Australia on suspicion of being involved in a tobacco smuggling scheme that netted North Korea $700m (£570m) in profits.
Jin Guanghua is currently awaiting extradition to the United States, where he will face criminal charges.
He is accused of supplying tobacco to North Korea for about 10 years. It is unclear whether he is contesting the lawsuit.
U.S. authorities allege that the tobacco trade has enabled Kim Jong Un’s regime to manufacture and sell counterfeit cigarettes to finance its weapons programs.
The Australian Attorney General’s Office confirmed Mr Jin was arrested in Melbourne in March last year and his “extradition case” was ongoing.
“This individual is expected to face a range of U.S. sanctions, bank fraud, money laundering and conspiracy charges,” the agency said in a statement Tuesday.
According to U.S. court documents, the scheme in which Mr. Jin is alleged to have been involved was carried out by a number of North Korean “state-owned enterprises” and was financed by its banks.
The documents say it was then used by “Chinese front companies” to process transactions through the U.S. financial system, evade sanctions and funnel millions of dollars into North Korea.
Mr Jin is accused of setting up a number of companies in the UK, New Zealand, the United Arab Emirates and China to “facilitate the purchase of used cigarettes”.
The United States says that proceeds from this program are believed to have supported North Korea’s ballistic and nuclear proliferation programs.
Counterfeit cigarettes have been North Korea’s “major source of income” since the 1990s, according to US officials. They are manufactured in Pyongyang and sold in counterfeit packaging of well-known cigarette brands and are also circulating in countries such as the Philippines, Vietnam and Belize.
According to the US government, illegal trade is considered one of Pyongyang’s biggest sources of foreign currency.
If convicted, Mr. Jin could face millions of dollars in fines and decades in prison.
His alleged co-conspirators are named in court documents as Chinese nationals Qin Guoming, 60, and Han Linglin, 42.
Both men are wanted by the FBI and are suspected of having ties to “China, the United Arab Emirates, and Australia.”
A $498,000 reward is being offered for information that may lead to the arrest and conviction of either man.
For many years, the United States has imposed harsh sanctions on North Korea due to its nuclear and missile activities.
In 2023, British American Tobacco was ordered to pay a $635 million fine to the US government for allowing one of its subsidiaries to sell cigarettes to North Korea.
Officials described the incident as “an elaborate scheme to evade U.S. sanctions.”