Switzerland has blocked a deal to sell ski lifts to North Korea. Expanded sanctions on luxury exports to North Korea were cited by a government agency.
Heavy rains and landslides have already delayed the project and North Korean leader Kim Jong-un has ordered the army to complete the resort by year's end.
The BBC reports he has repeatedly visited the Masik ski resort site and promoted it as an attempt to enhance the lifestyle of the nation's citizens.
But the State Secretariat for Economic Affairs in Switzerland said the resort is a "prestigious propaganda project for the regime".
"It is inconceivable that this resort will be used by the general public," SECO spokeswoman Marie Avet said.
It is thought Kim Jong-un learned to ski in Bern, where he attended secondary school without revealing his true identity.
The BBC reports the ski lift deal with Bartholet Maschinenbau is valued at more than $US7 million (5.2 million euros). It is reportedly the third to fall through due to sanctions.