In a recent development, an Italian animation company has agreed to pay the US Treasury Department $538,000 for “apparent violations” of US sanctions against North Korea by conducting business with a North Korean state-owned animation studio, the department disclosed on Wednesday.
This marks the first instance of financial penalties being imposed by the Treasury in connection with sanctions on North Korea’s movie and animation industry. The industry has reportedly been engaging in business with foreign companies for years, providing the isolated and nuclear-armed regime in North Korea with crucial revenue.
The Rome-based animation firm Mondo TV, S.p.a. sent wire transfers through US financial institutions to pay North Korea’s flagship studio, known as SEK, approximately $538,000 for outsourced animation work between May 2019 and November 2021, according to a statement from Treasury.
The payments were processed through “third-party companies” in China and the US with accounts at “several” US banks, as per information from the Treasury. However, the specific names of the US banks involved were not disclosed.
Matteo Corradi, the CEO of Mondo TV Group, declined to provide any comments on the matter.
Established in 1985, Mondo has been responsible for producing or distributing various popular cartoons in Italy, including the adventure show “Sandokan – The Two Tigers.”
While it is common for companies to unknowingly hire North Korean workers, the Treasury Department clarified that Mondo executives were well aware of the entity they were dealing with. The outsourcing contract explicitly mentioned North Korea, and the business relationship between Mondo and SEK dates back to the 1990s, with Mondo subcontracting animation tasks to SEK for different programming, including children’s animation. Additionally, Mondo even facilitated training for SEK animators in Italy.
As North Korean leader Kim Jong Un continues to showcase his nuclear capabilities, US officials have heightened efforts to track and intercept the billions of dollars allegedly stolen or earned abroad by North Korean hackers and IT workers in recent years. Mondo’s use of the US financial system for transactions with North Korea triggered the Treasury’s investigation and the subsequent threat of fines.
CNN has reached out for comment from North Korea’s diplomatic mission in London.
Jenny Town, director of the Korea program at the Stimson Center think tank, expressed surprise at the European company’s actions, particularly in light of UN sanctions imposed on North Korea in 2013. She emphasized that the settlement should serve as a wake-up call regarding the effectiveness of the sanctions regime.
Despite being subjected to heavy sanctions like Russia, North Korea’s animation industry has proven to be a significant revenue source for Pyongyang, according to experts.
Researchers uncovered a collection of animation sketches on a North Korean server last year, indicating that North Korean graphic designers might have contributed to work for US animation studios without their knowledge. Furthermore, Chinese workers may have also been involved in the outsourcing work, as per experts who analyzed the documents.
Reporting for CNN was contributed by Gianluca Mezzofiore.
