What Happened
The North Korean government conducted a series of tests at the Yongbyon nuclear complex between December 2020 and February 2021, Nikkei Asia reported Aug. 6, citing a leaked U.N. report that will be officially released in September. The draft report also detailed extensive North Korean smuggling, including the export of upwards of 364,000 tons of coal from North Korea to China's Port of Ningbo-Zhoushan from February-May 2021, in addition to illicit oil imports and $1 million worth of luxury goods smuggled by Chinese companies into North Korea.

Why It Matters
Amid massive economic hardship, North Korea is continuing to quietly build up its nuclear capabilities while focusing on measures to maintain the flow of foreign currency through coal exports, feed its military machine through energy imports and service the elite through luxury goods. While the administration of U.S. President Joe Biden may use this U.N. report to push for greater sanctions on entities and individuals facilitating North Korean smuggling, the White House is still considering how it’ll approach Pyongyang — namely, whether outreach should include incentives and sweeteners (and not merely more sanctions).

Background
On Aug. 6, U.S. Secretary of State Antony Blinken and South Korean Foreign Minister Chung Eui-yong discussed engagement with North Korea, including the prospect of supplying the North with humanitarian aid.