The German government said on Wednesday it will shut down a Berlin hostel after it emerged that the site is North Korean embassy property and had been leased in violation of UN rules.
The Süddeutsche Zeitung (SZ) along with public broadcasters NDR and WDR first reported the government's plans on Tuesday, citing the Foreign Ministry as saying that sanctions should be imposed due to North Korea's “unceasing, nuclear threatening actions that cause us great worry”.
According to the media reports, North Korea has rented space on land belonging to its embassy since 2004 to Cityhostel Berlin and a convention centre, walking distance from tourist hotspots like Checkpoint Charlie, Gendarmenmarkt, and Potsdamer Platz.
Experts say that North Korea uses its revenues generated from such embassy ventures to fund the operation of its embassies as well as to finance rocket and atomic programmes.
"Any kind of commercial activity on the site of the embassy or in relation to the embassy is prohibited," said Foreign Ministry spokesman Martin Schäfer.
"Cityhostel in Berlin constitutes neither a diplomatic nor consular activity of a North Korean foreign representation," he continued, adding that the government will move to "shut down the financial source to the North Korean regime as quickly as possible".
“All Member States 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,” Resolution 2321 states.
"In particular we must consider that we must more systematically dry up the financial sources of this nuclear programme."
North Korea's nuclear testing has caused alarm across the international community and led to upping of sanctions from the United Nations. This in combination with its development of long-range missiles - which may have the potential to reach the United States - has led to countries increasing their sanctions, with US President Donald Trump's warning of a “major, major conflict” with North Korea.
Over the past 11 years, the Security Council has imposed six sets of sanctions on Pyongyang - two adopted last year - to significantly ramp up pressure and deny the North Korean regime the hard currency revenue needed for its rocket and atomic programmes.
But UN sanctions experts have repeatedly told the council the measures have had little impact because they have been poorly implemented.
Sources within government circles further told the German media outlets that the North Korean delegation in Berlin has long been a problem. Supreme Leader Kim Jong-un's diplomats around the world have been implicated in criminal schemes to procure foreign currency for the regime, including drug trafficking and arms dealing. According to defectors, at least one such criminal case occurred in Berlin in the past.
North Korean representatives are also often under observation due to concerns that they may try to procure materials for their country's nuclear programme, SZ reports.
Correction: This article previously incorrectly stated a number of North Korean ventures banned under a UN resolution.