A team of Bloomberg analysts have this interesting piece on the topic. In sum it is all via a complicated network so that it is difficult to find the trail:
A trail of money stretching from a Panamanian shipping agent to an octogenarian Singaporean to a Chinese bank provides a window on why U.S. efforts to tighten sanctions on North Korea may be harder to achieve than in the case of Iran.
For decades North Korea has built networks of front companies and foreign intermediaries to channel currency in and out, circumventing attempts to isolate it over its nuclear-weapons program. Court documents and interviews with investigators, banks and prosecutors show the cornerstone of those networks is China. “Its geographic proximity, the huge trade volume, having the contacts, and having the historic relationship all contribute to making China the center point for any North Korean initiative to evade international financial sanctions,” said William Newcomb, a former member of a panel of experts assisting the United Nations’ North Korea sanctions committee. “China is a very important piece in making sure that blockages work.”
North Korea relies on China, its biggest trading partner, for food, arms and energy. The countries describe their ties as “friendship forged by blood” during the 1950-1953 Korean War where the U.S. was a common foe. China has criticized North Korea for provocative actions but historically opposed harsh sanctions that might precipitate a regime collapse and a flood of refugees across its 870-mile (1,400 kilometer) shared border.
A case for detailed investigation..