FIRST AIRED: April 24, 2017

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00:00:01
>> As the US weighs up more sanctions for North Korea, the world's only one-star airline is expanding. Visitors say the national carrier Air Koryo is diversifying its business, making money on everything, from cigarettes and cola to gas stations and taxi fares. North Korea has been hit with waves of heavy sanctions over its nuclear program and major international flight routes were dropped last year.
00:00:24
Now branching into retail could be a way to plug a financial hole. Air Koryo has never been directly targeted for sanctions itself, but that may change as Washington looks for new ways to squeeze Kim Jong Un's regime. Reuters' James Pearson explains why the airline is in American crosshairs.
00:00:40
>> The UN has said that there's basically no distinction between Air Koryo and the North Korean air force. It is a military run conglomerate, effectively. So that does raise some sort of issues. I mean, if you go to North Korea as a tourist, if you buy a can of Air Koryo Cola, are you therefore breaking sanctions by giving money directly to the North Korean military, which would then be free to spend it on whatever they want, including the nuclear program?
00:01:03
>> It's already illegal to sell jet fuel to North Korea, but Air Koryo's civilian flights have remained exempt from sanctions, despite wide suspicion over how the airline's 15 planes are used.>> So far, there's not been any sort of larger, big move from the United Nations to ground the fleet.
00:01:18
And that's considering that the United Nations has said on several occasions that they suspect Air Koryo to be involved in smuggling of illicit goods.>> So why have there so far been no direct sanctions on Air Koryo itself? The answer lies, at least in part, with Russia and China.
00:01:33
As well as being the only two remaining countries that the airline is able to fly to, their cooperation is central to any new sanctions from the UN, and both have a history of stepping in and making things difficult for Washington when it wants to pile even more pressure on North Korea.