WASHINGTON, April 22 (Reuters) - North Korean animators

may have helped create popular television cartoons for big

Western firms, including Amazon ( AMZN ) and HBO Max, despite

international sanctions on North Korea, a research report has

found.

Researchers discovered files on a North Korean internet

server that included animations, written instructions and

comments that appear to relate to projects under production for

the foreign studios, the report from the Washington-based 38

North project released on Monday said.

Among those projects were "Invincible," an Amazon Original

animated series produced by California-based Skybound

Entertainment and "Iyanu, Child of Wonder," an anime about a

superhero created by Maryland-based YouNeek Studios and due to

air this year on HBO Max.

U.S. sanctions prohibit almost all commercial activity

between U.S. citizens and North Korean entities.

Michael Barnhart, who works on North Korea issues at

Mandiant, a computer security company owned by Google, and

worked with 38 North on the project, said there was nothing to

indicate the Western companies had knowledge of the

arrangements, which appeared to involve subcontracting of work

to China.

"There's no way that anyone could have known it, except for

the operational security error which exposed it," he said.

Amazon ( AMZN ) spokespersons declined comment and referred Reuters

to Skybound Entertainment.

Skybound said it had no knowledge of any North Korean

companies working on its animation, but took the allegations

seriously and had initiated a thorough internal review to verify

and rectify any potential issues.

"We have also notified the proper authorities and are

cooperating with all appropriate bodies," its head of corporate

communications Hannah Cosgrove said.

HBO Max and YouNeek did not respond to requests for comment.

The report said that after discovering the files, two

researchers kept watch on the server and observed traffic

throughout January.

"Each day, a new batch of files would appear that included

instructions for animation work and the results of that day's

work," the report said.

"Often the files contained editing comments and instructions

in Chinese, presumably written by the production company, along

with a translation of those instructions into Korean," it said.

"This suggests a go-between was responsible for relaying

information between the production companies and the animators."

The report said the identity of the person, or persons,

uploading the files could not be determined, nor of the North

Korean entity involved.

WESTERN ANIMATION PROJECTS

North Korea's premier animation house is the Pyongyang-based

April 26 Animation Studio, also known as SEK Studio, which has

worked in the past on international projects. In 2016, the U.S.

Treasury Department designated it a North Korean state-owned

enterprise and put it under sanctions.

The report noted that in 2021 and 2022 the U.S. government

also imposed sanctions on Chinese companies that have worked

with the studio or acted as a go-between.

38 North said files found on the server related to a range

of projects, including Season 3 of "Invincible." The report said

a document on the server carried the name of the series and

"Viltruminte Pants LLC," part of the Skybound group.

Working with Mandiant, the researchers examined access logs

for the server, which included three internet addresses in

China.

Two of the latter were registered to China's Liaoning

Province, which neighbors North Korea and where there are many

North Korean-operated businesses and North Korean IT workers.

Mandiant's Barnhart told Reuters he assessed "with high

confidence" that the animation contracts had been outsourced to

North Korea by a front company, apparently in China.

China's Washington embassy said Beijing strictly implemented

U.N. prohibitions on dealings with North Korea but added that

sanctions were not a solution to the North Korea issue. North

Korea's U.N. mission did not respond to a request for comment.

BETTER PAY IN CHINA

Choi Seong-guk, a North Korean defector web cartoonist who

worked at SEK Studio between 1996 and 2002, told Reuters the

studio had a team assigned for joint work with foreign studios.

Choi, who quit the state-run studio over low pay, said some

fellow North Korean cartoonists also left and went to work

overseas, mostly in China, where they were construction workers

on paper but in reality created animation for Chinese clients.

"By doing that in China, they are paid $100 per month ...

compared to $1 back home," he said.

In 2022, the U.S. Departments of State and Treasury and the

Federal Bureau of Investigation issued an advisory warning

businesses about the risk of inadvertently hiring North Korean

IT workers and said this could put them in violation of U.S. and

U.N. sanctions.

A spokesperson for the U.S. Treasury said it does not

comment on "potential investigations or sanctions violations as

general practice" but North Korea's efforts to generate revenue

for its weapons programs through cybercrime and abuse of

contractors was a concern.

(Reporting by David Brunnstrom; Additional reporting by Ju-min

Park in Seoul

Editing by Don Durfee and Lincoln Feast.)