The General Association of Korean Residents in Japan, or Chongryon, helped to establish a firm that jointly invested $20 million in a North Korean trading company, according to a Japanese press report. File Photo by Robert Gilhooly/EPA

Oct. 29 (UPI) -- A company based in Japan might have transferred rare earth extraction technology to North Korea before it disbanded in 2007, according to a Japanese press report.

The Sankei Shimbun reported Monday the trading firm was based in Tokyo and was established under the General Association of Korean Residents in Japan, or Chongryon.


The firm, International Trading, may have worked with a Korean-Japanese scientist at Tokyo University of Technology to transfer know-how to North Korea through a "merged business."

The company was founded in 1987 and disbanded 20 years later. Sources who spoke to the Sankei said it is unclear whether International Trading had ceased operations entirely.

According to documents obtained by the Japanese newspaper, International Trading jointly invested about $20 million with North Korea's Ryongaksan Trading Co. to launch the Korea International Chemical Joint Venture Co., which was the target of United Nations Security Council sanctions in 2016 -- in connection to military procurements.

The Sankei reported International Trading came under suspicion in the course of U.N. and Japanese government investigations and that it would be difficult to confirm whether rare earth extraction technology was transferred to North Korea.

Japanese financial authorities have confirmed the existence of a frozen account connected to the company, but no local laws could penalize the firm's agents, according to the report.

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North Korea is under the heaviest sanctions in its history, but some defectors in the South say embargoes will not lead to North Korea collapse.

South Korean news service CBS No Cut News reported Monday Park Ye-young, a defector who left the North in 2002, said North Korea's markets have strengthened the regime, and sanctions hurt the most vulnerable North Koreans.

Park was speaking at a parliamentary audit on Monday.