In the center of Berlin, between the Brandenburg Gate and Checkpoint Charlie, North Korea is conducting business that helps fund Kim Jong Un's brutal regime and nuclear program.

During the Cold War, North Korea had a sprawling diplomatic compound in East Germany represented by some 100 diplomats. Today, the isolated regime occupies the same property but only has about 10 diplomats.

For nearly a decade North Korea has leased part of its unused property to City Hostel, a low budget travel option where dorm rooms go for as little as 17 euros ($18) a night. Another building on the property is leased out as an event hall.

North Korea earns tens of thousands of euros in hard currency from the rentals every month. It is only part of the pariah state's use of diplomatic posts around the world to get around sanctions, run businesses and conduct clandestine, often illicit, activities to earn much needed hard currency.

The money, according to experts, is used to buy restricted technology, luxury goods and finance diplomatic missions.

Germany now plans to ban North Korea from leasing the embassy property, Germany's Süddeutsche Zeitung newspaper and broadcasters NDR and WDR reported.

"We must increase pressure to bring North Korea back to the negotiating table," said Foreign Ministry State Secretary Markus Ederer. "This means above all that we must consistently apply sanctions that the United Nations and European Union imposed."

"In that regard, it is particularly important that we do even more to dry up the financial resources used to fund the nuclear program," he said. "The German government is in complete agreement and the responsible authorities will now take the necessary steps."

City Hostel leases property from the North Korean embassy in Berlin

According to UN Security Council Resolution 2321 passed in November in response to Pyongyang's fifth nuclear test, countries shall prohibit North Korea "from using real property that it owns or leases in their territory for any purpose other than diplomatic or consular activities."

Relations between North Korea and the rest of the international community have grown tense in recent months as Pyongyang conducts ballistic missile tests and threatens Japan, South Korea and the United States with a nuclear attack.

The United States has said all options including military force are on the table to stop North Korea's nuclear program. It has also upped pressure on countries, especially China, to enforce UN resolutions and cut financial sources for the regime in North Korea.