Archive for October, 2011

Koryo Bank unveils new debit card

Wednesday, October 12th, 2011

Dr. Bernhard Seliger of the Hanns Seidel Foundation writes in to notify us about the DPRK’s new Koryo Bank (고려은행) debit card.

Click image above to see the front and back of the card.

There is an information flyer available in the DPRK:

According to the translator this is what it says:

Electronic Paying Card (Debit Card)

1. Introduction
* Electronic Paying Card is a cash card with which cardholders can make a payment when buying a merchandise or receiving a service instead of money. We provide the very best customer service, convenience and security.
* Cardholders (including foreign cardholders) can freely make a payment in foreign currency at electronic paying card affiliates.

2. Instruction
*Issuing a card and making a deposit: Card is issued at Koryo card issuing branches. Foreign currency is converted into equivalent North Korean won at a current exchange rate (purchasing price) when cardholders or to-be make a deposit. Issuing a new card is free of charge. Issuing a card, cardholders should register a private password to prevent use of a third party. Using the card cardholders should remember the password to verify identity.

*Procedure of the payment: Card holders are allowed to purchase goods and services within the available balance of the account. Card payment machine verifies identity by crosschecking with the password you enter. If the information is confirmed to be correct upon identification, merchants or acquirers proceed to make the payment. After purchasing, the balance is diminished by the payment.

*Cash Withdrawal: Cardholders who want to withdraw a part or the entire of the remaining balance can be served at Koryo Bank Card issuing branches. The exchange rate is the current selling price.

3. Notice: Cardholders observe the followings as regards to using the card.
*Due to its delicate electronic procedure while the card is to be used, it is recommended not to damage the electronic part of the front.
*Remembering and entering the password correctly is important, since the payment procedure is suspended after 3 times of password errors.
*If the card is destroyed or lost, cardholders should go to the Koryo bank where the card is issued and report the loss and the damage.
*With verifying identity and the balance of the card, a new card is issued.
*Cardholders shall remain liable for the loss incurred by their negligence.

4. Questions and hot line
*When there is a question, a loss, duplication or a lost electronic paying card, Call 462-6315.

Koryo Bank

This is not the only debit card available to foreigners in the DPRK. Dr. Seliger also wrote in earlier this year to inform us of the DPRK’s Narae (나래) debit card.

Here are previous posts on Koryo Bank.

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GPI launching November DPRK business delegation

Wednesday, October 12th, 2011

In an email from Paul Tija:

In the current financial and economic situation, companies face many challenges. They must cut costs, develop new products and find new markets. In these fields, North-Korea could be an interesting option. It is opening its doors to foreign enterprises, its labor costs are the lowest of Asia, and its skilled labor is of high quality. It established free trade zones to attract foreign investors and there are several sectors, including textile industry, agro business, fishing, shipbuilding, logistics, mining/rare metals and Information Technology that can be considered for trade and investment. Most of the North-Korean trade is currently taking place with its neighbours and the amount of production of the South-Korean factories in North-Korea continues to increase. The trade between North-Korea and China jumped from US$1,97 billion in 2007 to $3,47 billion in 2010. A growing number of European firms are exploring the country as well – for example companies currently producing in China, and where the wages are rising fast.

In early November, I will lead a Dutch business mission to North-Korea (already fully booked), but a second mission will take place as well, from 13 – 19 November. Do you want to explore new business opportunities for your company? Then join me on this unique trade and investment mission. The program includes individual matchmaking, company visits, network receptions and dinners. Furthermore, we will meet European business people who are working and living in North-Korea. At the beginning of the tour, in Beijing, we will take part in the seminar: “Doing business with DPRK” (tentative). After the trip to Pyongyang, we will return to Beijing, where you can take a connecting flight or extend your stay in China.

The program of this mission has been attached. In case you are interested to participate: please contact us as soon as possible, so we can start the visa-application procedure. If you are not able to join, then it is also possible for us to do marketresearch and to take part in local meetings in Pyongyang on your behalf.

See the Brochure and itinerary here (PDF).

With best regards, Paul Tjia (director)
GPI Consultancy, P.O. Box 26151, 3002 ED Rotterdam, The Netherlands
E-mail: [email protected]
tel: +31-10-4254172
fax: +31-10-4254317
Website: www.gpic.nl
Twitter: twitter.com/PaulTjia
LinkedIn: nl.linkedin.com/pub/paul-tjia/1/445/958

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On “8.3 couples”

Wednesday, October 12th, 2011

A recent story in the Donga-Ilbo asserts that prostitution and other forms of “adult business” are on the rise in the DPRK. Of course the article mentions neither when this specific trend became noticeable (from last year or from five years ago) nor does it mention the locality or magnitude of the trend.  Of course the claim is impossible to determine with any precision since such comprehensive time-series data is not available from the DPRK.  We do not even have good data on prostitution arrests, which would certainly understate the actual size of the industry. I believe it is fair to assume from the abundance of open sources, however, that prostitution has increased significantly in the DPRK since the arrival of the Arduous March.

Though we do not have any hard data, an interesting anecdote in the Donga-Ilbo  story (which I believe might be true) points not only to a general unofficial public acknowledgement of prostitution, but also shows a “North Korean sense of humor” about the situation:

Rumors say the term “8/3 couple,” meaning people engaged in extramarital affairs, is spreading widely. 8/3 refers to the day in August 1984, when then North Korean heir apparent Kim Jong Il instructed authorities “to use by-products from factories or workplaces to produce daily necessities for people.” The term is changed to sarcastically mean “pseudo” and “fake.”

From the interviews I have done with North Korean defectors, I have learned that “8.3” references are a “common” put-down…meaning either “fake” or “low-quality”. It is entirely plausible to me that this term has made the transition to categorizing the prostitution industry as well.

You can read the full story here:
N. Korean women turning to prostitution, porn to earn money
Donga-Ilbo
2011-10-10

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Lankov on CNC technology

Wednesday, October 12th, 2011

Pictured above (Google Earth): a Pre-renovation satellite image of what is now the Huichon Ryonha General Machine Plant, one of two known factories which produce CNC machines.

I have posted several times on the DPRK’s growing use and promotion of CNC technology (here and here). In his most recent column in the Asia Times, Andrei Lankov mentions his exposure to this technology from his younger days in the Soviet Union:

An interesting confirmation of the trend is the current fad for CNC (Computer Numerical Control) technologies – computer automation at factories. The CNC craze is often associated with Kim Jong-eun, the most likely heir to the North Korean throne. Indeed there is good reason to believe that this is the case, but it doesn’t really matter whether this fad is sponsored by Kim Jong-eun or someone else. Rather, what is important is that this naive belief in the power of intelligent machinery that will miraculously transform the North. (See Happiness rolls over us like a wave, Asia Times Online, Feb 26, 2010)

Incidentally, when the present author was a Soviet teenager, back in the 1970s, he frequently read similar stories in the then-Soviet media. The Soviet leadership of the Leonid Brezhnev-era also invested some hope in the miraculous power of CNC technology. CNC is actually quite a sound idea and works very well if used in the right social and economic conditions.

However, such conditions were absent in the Soviet Union of the 1970s and are also seemingly completely absent from North Korea of today.

So, Pyongyang’s expectation for CNC, mobiles and computers are unfounded. These technologies, or for that matter any other technology, are unlikely to have any serious impact on the future of North Korea as long as the country’s social and political system remains unchanged. However, North Korea’s leadership cannot see or accept this.

The heavy official promotion of CNC stems from what Lankov calls “technological fetishism” (which would be a good band name), a condition he describes this way:

The logic behind technological fetishism is not that difficult to understand. The root cause of economic stagnation experienced by Stalinist regimes is the intrinsic inefficiency of the Stalinist economic model. But the potentates of such regimes as well as their henchmen could not admit such things – at least, openly.

For Stalinist leaders, the social system was perfect, or at least had to be presented as such. Therefore the only conceivable reason for obvious economic difficulties had to be technological issues. Being hard-core modernizers, Stalinists shared the modern belief in the power of technology as a force that could change people’s lives.

So by DPRK official logic, now that the DPRK has overcome imperialist economic blockades of the motherland and acquired vital CNC technology, economic growth lies just around the corner. Unfortunately for the people of the DPRK, real economic progress is always just ahead–but never now.

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South Korea to allow firms to resume Kaesong construction

Tuesday, October 11th, 2011

Pictured above (Google Earth): Kaesong Industrial Zone (Sept. 2009)

According to Reuters:

South Korea said on Tuesday it will allow 120 of its firms to restart building a joint industrial park with North Korea, a fresh sign of tensions between the rival countries easing.

Construction of five factories can resume, and work to build seven new ones can go ahead, South Korea’s Unification Ministry said, 17 months after stopping activity in protest at what the South said was an attack by the North on one of its ships.

The South Korean firms employ about 46,000 North Korean workers at the Kaesong industrial park to make clothes, utensils and watches, taking advantage of cheaper labour and property than is available in the South.

According to the Choson Ilbo:

[The Ministry of Unification] will also build a fire station and hospital at the complex, repair a highway linking the city of Kaesong with the industrial complex, and add 45 buses to shuttle North Korean workers to and from the facility.

Previous posts on the Kaesong Zone can be found here.

Read the full story here:
S.Korea allows work at factories in North to restart
Reuters
2011-10-11

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Pyongyang fireworks

Tuesday, October 11th, 2011


On October 8, 2010, the DPRK held a large-scale fireworks show on the Taedong River.  The current Google Earth imagery of Pyongyang, taken on October 6, 2010, shows the infrastructure used in the fireworks show:

Click the image to see a larger version in a different window. On the left side of the river near Kim Il-sung Square is a series of new water jets (water cannons) these are used to shoot decorative patterns of water through the air (accompanied by colorful lasers!). The system is approximately 117 meters long, and according to satellite imagery, was installed sometime between December 19, 2009 and October 6, 2010—though footage on Youtube dates to July 18, 2010).  It appears to be a permanent installation which supplements the previously-built dual water cannons that were already in the Taedong River.

In addition to the new water jets, we can see three floating platforms (barges) from which the fireworks were launched. These are temporary structures which can be assembled and disassembled with relative ease. Each platform is approximately 119 meters long. Given available satellite imagery it is unclear where these barges are kept for the remainder of the year.

If any readers have the time or interest in finding out what this kind of hardware would cost in the US, I would be interested in knowing.

This new fireworks system is apparently made possible by the productive powers of CNC technology.  According to KCNA:

New Fireworks Developed

Pyongyang, October 6 (KCNA) — More than 100 kinds of new fireworks have been developed in the Democratic People’s Republic of Korea.

They, based on the three elements of the modern fireworks technology — software, ignition control device and firecrackers — have reached a high level in color, brightness and formative artistry.

All the technologies and materials needed for the new fireworks have been developed and made in Korea.

The fireworks, multi-dimensional in fire cycle, rhythmic display and bursting point and scope in the air, fully represent the feelings of the Korean people.

Meanwhile, a CNC-based fireworks displaying system has been established and a device developed to definitely guarantee fireworks display in any atmospheric conditions.

The new fireworks, which have been successfully tested on several occasions, will make their debut in the forthcoming holiday of the Korean people.

Here is what KCNA had to say about the fireworks show which tookplace two days after this picture was taken:

Firework galas celebrating the 65th anniversary of the founding of the Workers’ Party of Korea were held here Friday evening.

The bank of the River Taedong facing the Party Founding Memorial Tower and the plaza of the Mangyongdae Schoolchildren’s Palace, the venues of the firework galas, and other areas of Mangyongdae District and different parts of the capital city were crowded with Pyongyangites who came to watch the nocturnal sky in October to be beautifully decorated with fireworks.

Speeches were made by Kim Ki Nam and Choe Thae Bok, who are members of the Political Bureau and secretaries of the Central Committee of the WPK.

The speakers said that the firework galas would be a festival of glory in glorifying the long history and immortal exploits of the party and a grand canvas of victory stirring up the pride and self-esteem of the service persons and people of the DPRK working fresh miracles and exploits in the era of Songun as befitting the descendants of President Kim Il Sung.

They noted that the firework galas would be held by use of Korean style modern means for displaying fireworks developed in such a unique manner as to ensure formative artistic effect as required by the Korean people’s ideological and emotional desire and sentiment.

Fireworks were displayed in succession in the air over the Party Founding Memorial Tower and the Mangyongdae Schoolchildren’s Palace, gorgeously adorning the nocturnal sky of the capital city while songs “Long Live the Workers’ Party of Korea” and “Under the Banner of the Party” reverberated far and wide.

The spectacular sceneries presented by fireworks in the sky represented the highest glory extended by all the servicepersons and people to General Secretary Kim Jong Il.

An endless fire went up depicting the logo of the WPK to the tune of songs including “We Sing of the Party” and “The Care of the Party Is the House We Live in,” “The Workers’ Party Is Our Guide”.

Fireworks were ceaselessly displayed in the sky presenting fantastic sceneries demonstrative of the high level of formative art, adding to the festive atmosphere.

Watching the firework galas were senior officials of the party, army and state, chairpersons of friendly parties, delegates participating in the national celebrations of the 65th birthday of the WPK, anti-Japanese revolutionary fighters, officials of the party, armed forces and power bodies and working people’s organizations, servicepersons of the Korean People’s Army and the Korean People’s Internal Security Forces, officials in the fields of science, education, culture and arts, public health and media, heroes and heroines, those related to the anti-Japanese revolutionary struggle, bereaved families of the revolutionary martyrs, persons of merit and other working people.

Invited there were members of congratulatory groups of overseas compatriots, delegations and visiting groups of Koreans from different parts of the world including the congratulatory group of Koreans in Japan, the chief of the Pyongyang mission of the Anti-Imperialist National Democratic Front, delegations and delegates of groups for the study of the Juche idea and diplomatic envoys of different countries, representatives of international organizations, members of the military attaches corps and other foreign guests here.

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Korean revolutionary history museum under renovation

Tuesday, October 11th, 2011

UPDATE 1 (2012-1-13): A reader sent in a picture taken from the recently published Architekturführer Pjöngjang (Order from Amazon here, and more on the book here and here). The book was published in May 2011, but inside is a picture containing the already renovated Mansu Hill Revolutionary History Museum.  You can see the picture here:

The caption on the photo reads  “Wall painting of Pyongyang from a birdseye view in the Paektusan Institute (photo taken 2007)”.

Thanks to a reader for sending this to me!

ORIGINAL POST (2011-10-11): A recent visitor to the DPRK took the following picture of the Korean Revolutionary History Museum on Mansu Hill:

See original photo here.  If you compare it with the photo I took in 2004, you can see that there appears to be some serious renovations going on:

I wonder what new revolutionary feats are being added to the museum’s displays?

Additionally, the Kim Il-sung statue is no longer under wraps, so it appears that it was covered for its protection from construction debris, not because it was being altered in any substantial way.

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2011 DPRK emigration statistics

Sunday, October 9th, 2011

UPDATE 4 (2011-10-9): According to Yonhap, only 20 North Korean defectors are working as public servants in South Korea:

Only 20 North Korean defectors work as public servants in South Korea, an opposition lawmaker said Sunday, the latest sign that North Koreans are struggling to join mainstream South Korean society.

The figure represents just a small fraction of the more than 22,000 North Korean defectors in South Korea.

In June, Cho Myung-chul, a former economics professor at the North’s elite Kim Il-sung University, was appointed to lead a government body in charge of educating citizens on unification with North Korea.

Cho is the first North Korean defector to become a senior government official in South Korea.

Nineteen others work in the Unification Ministry, which handles inter-Korean affairs, in the Seoul Metropolitan Government, and in Incheon city, as well as in Gyeonggi Province, which surrounds Seoul, according to Park Joo-sun of the opposition Democratic Party.

Separately, 38 North Korean defectors are temporary workers in the central and local governments under a program aimed at expanding employment of North Korean defectors, Park said, citing the Unification Ministry.

A recent survey showed the unemployment rate of North Korean defectors stood at 9.2 percent, about three times higher than that of other South Koreans.

UPDATE 3 (2011-9-23): Yonhap reports that DPRK student defectors increase 3.5-fold since 2006:

A total of 1,681 elementary, middle and high school students fleeing from the communist country reside here in 2011, up 235.9 percent from 475 in 2006, according to the report by the education ministry and submitted to parliament for a regular audit.

Elementary school students accounted for 60.7 percent of the defector students below college level, followed by high school students with 22.2 percent and middle school students with 17.1 percent, the report showed.

The total number of North Koreans defecting to the South surpassed the 20,000 mark in November last year for the first time, almost double from around 10,200 in 2006, according to the Unification Ministry data.

Meanwhile, the dropout rate of North Korean defectors in schools here has gradually decreased over the past few years, from 10.8 percent in 2007 to 6.1 percent in 2008 to 4.7 percent in 2010, according to the report, a sign that efforts to help support young North Korean defectors paid off.

Reasons for their withdrawal from the regular schooling include adjustment failure, responsibilities for housework and taking a school qualification exam instead of completing high school for entering college, the report showed.

UPDATE 2 (2011-9-19): Yonhap reports that 378 N. Korean defectors under protection of S. Korea’s overseas missions.  According to the report:

“As of the end of July, a total of 378 North Korean defectors are under the protection of overseas missions and the ministry is working with relevant nations and international organizations to swiftly transfer them to South Korea,” the ministry said in a report to the National Assembly.

The number of defectors arriving in South Korea via its diplomatic missions totaled 2,423 last year, 2,927 in 2009, 2,089 in 2008, 2,544 in 2007 and 2,018 in 2006, according to the report.

From January to August this year, 1,797 defectors arrived in the South via the diplomatic missions, it said.

UPDATE 1 (2011-7-4): According to Yonhap:

The number of North Korean defectors to South Korea has exceeded 1,400 [1,428] in the first six months of the year, up 14 percent compared to the same period last year, a government official here said Monday.

The Choson Ilbo also reports on the emigration numbers:

The Unification Ministry on Monday said 52 percent of the 1,428 North Koreans who came to South Korea in the first half of this year took a year or less to complete the journey, significantly more than the 30 percent in 2009 and 39 percent in 2010.

After a sudden 19-percent drop last year, the number of North Koreans who come to the South is growing again. It steadily increased until 2009 to hit 2,927. But amid growing unrest, the regime cracked down on defectors and it seems asked China to help. But the Chinese crackdowns simply hastened defectors’ move to South Korea, so the figure skyrocketed again this year and is likely to exceed 3,000 by the end of this year, according to the ministry official.

Meanwhile, 47 percent of the new arrivals in the first half of this year had family members already living in the South, up from 36.4 percent from last year. Those who were accompanied by their families also took up a bigger share with 49 percent, up 10 percent from last year. The official said the reason is that many whole families are escaping as they see no hope in the isolated country and plan to go to South Korea from the start. “It’s not just because of economic hardship,” he added.

There are a total of 21,788 North Korean defectors in the South, of whom 75 percent are between the age of 20 and 49, and 72 percent women.

ORIGINAL POST (2011-6-13): According to KBS:

The number of North Korean defectors who entered South Korea this year numbered around eleven-hundred at the end of May.

This is up 14 percent from the same time last year.

A Unification Ministry official on Monday told reporters that the rise is considered unusual given the North has tightened border security.

Read the full story here:
Seoul says flow of N. Korean defectors likely to continue
Yonhap
2011-7-14

No. of NK Defectors who Enter S.Korea Rises 14%
KBS
2011-6-13

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Jordanian bank tied to DPRK illicit weapons trade

Friday, October 7th, 2011

UPDATE (2011-10-10): According to the Jordan Times, the Bank denies any involvement:

The Arab Bank on Sunday stressed that it has never dealt with the government of North Korea or Tanchon Bank, which the US has accused of being the primary financial agent behind Pyongyang’s weapons programmes. “Based on a review of its customer account and transaction records, Arab Bank does not believe that it has conducted business with the government of North Korea or Tanchon Bank,” a spokesperson from the Arab Bank said.

In a diplomatic cable sent by the US State Department to the US embassy in Amman in August 2007, officials warned that the Arab Bank could be unwittingly assisting proliferation-related transfers between Iran, Syria and North Korea. “We are concerned that Iran, Syria and DPRK [Democratic People’s Republic of Korea] proliferation entities are using the Arab Bank network to process what may be proliferation-related transactions,” read the cable, released by WikiLeaks on its website at the end of August and viewed by The Jordan Times.

According to the cable, the US knew that as of 2007, North Korea’s Foreign Trade Bank mission in Tripoli, Libya (FTB Libya) had expanded its role in North Korea’s banking network and was helping Tanchon Commercial Bank, the banking arm of North Korea’s primary weapons trading firm, KOMID, to move funds from both Syria and Iran.

It added that in 2007, FTB Libya provided assistance to Tanchon in making remittances from funds from the sale of unspecified, probably proliferation-related goods in Syria.

“Our information indicates that Tanchon is establishing this new arrangement because Tanchon could no longer remit funds through a route it had previously used. FTB Libya arranged remittance routes for Tanchon from Syria and other locations via intermediary banks… We have information that Tanchon’s financial transfers are conducted surreptitiously by using either aliases or front companies,” the US State Department said in the cable.

The US reportedly claimed that the transfers, which were probably proliferation-related, occurred inside the Arab Bank network and involved both Arab Bank branches and the Arab Tunisian Bank, of which, according to the US, the Arab Bank is a 64.2 per cent stakeholder.

“By processing these transactions, Arab Bank could be unwittingly assisting proliferation-related activities,” read the cable.

In the cable, the State Department called on Jordan to maintain vigilance with regard to Syrian, Iranian and North Korean financial transactions in its jurisdiction to prevent these countries from using deceptive financial practices to further their proliferation-related activities, urging appropriate authorities to investigate such transactions.

The Arab Bank spokesperson told The Jordan Times that the bank has not found any records indicating that Jordanian government officials provided it with information concerning surreptitious efforts by North Korea to move funds through its network.

Citing the cable’s reference to “deceptive financial practices” by North Korea, the spokesperson emphasised that without knowing the details of these efforts by North Korea to conceal its financial transactions, it is not possible for Arab Bank or any other bank to address these allegations with any more specificity.

“As noted in the US State Department cable, Arab Bank is one of the ‘most respected banks in the Middle East’, with a network that spans 30 countries and five continents. The bank maintains a state of the art compliance programme, works closely with banking regulators in all countries where it operates, and has a long history of providing safe and secure banking services,” the spokesperson stressed.

A US embassy official in Amman told The Jordan Times last week that the embassy’s policy is not to comment on WikiLeaks cables.

ORIGINAL POST (2011-10-7): According to the Wall Street Journal:

As it sought to stop North Korea from spreading its nuclear technology, the U.S. uncovered signs in 2007 that the country was channeling funds through a major Middle Eastern bank based in Jordan, one of its closest regional allies, according to diplomatic cables posted online by document leaking website WikiLeaks.

In the cables, viewed by The Wall Street Journal, U.S. officials warned their counterparts in Jordan that North Korea was using Amman-based Arab Bank PLC to receive money from Syria and Iran, circumventing international sanctions.

The U.S. has said, apart from the cables, that it believes Syria purchased North Korean nuclear technology, including a nuclear reactor that Israel bombed in 2007. The U.S. also believes that Iran has acquired long-range missiles from North Korea.

“We are concerned that Iran, Syria, and DPRK [North Korea] proliferation entities are using the Arab Bank network to process what may be proliferation-related transactions,” read an August 2007 cable from the U.S. State Department to the U.S. Embassy in Amman.

The warnings provide a rare glimpse into U.S. efforts to stop North Korea from spreading arms and nuclear technology to its enemies. U.S. officials have said as recently as last month that North Korea is still aggressively establishing a network of front companies through which to secretly sell its weapons and evade sanctions.

“U.S. efforts have helped to spur isolation, but I think there is still a cat-and-mouse aspect to North Korean illicit financial activity,” Juan Zarate, a White House counterterrorism official until 2009, said Thursday.

In the cables, the U.S. said it was concerned that North Korea helped one of its lenders, Tanchon Commercial Bank, which it describes as the “primary financial agent behind the DPRK’s weapons programs,” to funnel money from Syria and Iran through Arab Bank.

The governments of Syria, Iran and North Korea didn’t respond to calls and emails requesting comment. A spokeswoman for the Jordanian Embassy in Washington declined to comment.

The cables said those transactions “have occurred through Arab Bank PLC, one of the oldest and most respected banks in the Middle East.”

Arab Bank said it didn’t believe it had processed any North Korean funds. “Based on a review of its customer account and transaction records, Arab Bank does not believe that it has conducted business with the government of North Korea or Tanchon Bank,” the bank said.

“In addition, Arab Bank has not found any records indicating that government officials provided information to the bank concerning surreptitious efforts by North Korea to move funds through its network,” it said.

The U.S. cables, which were posted at the end of August, suggest that Arab Bank may have processed the purported North Korean transactions unwittingly. They say that Tanchon was conducting its financial transfers surreptitiously using aliases and front companies.

In interviews, current and former U.S. officials said warnings such as those reported in the cables aren’t unusual and don’t indicate that they viewed Arab Bank as a particular cause for concern.

The bank was fined by U.S. banking regulators in 2005 for lacking adequate safeguards to stop money laundering and terrorist financing. Since then, a U.S. official said, Arab Bank has taken major steps to shore up its internal controls and has emerged as one of the more responsible lenders in the region.

The cables don’t say how large the purported transactions were, or their purpose. Nor do they say what, if anything, was done after the warnings.

Arab Bank is facing several civil lawsuits in a New York federal court dating to 2004 that allege it knowingly helped fund Palestinian terrorist attacks. The suits, brought by family members of those killed or injured in the attacks, allege the bank acted as a conduit for money from Saudi donors that went to families of suicide bombers and terror groups, a charge the bank denies.

In a statement, Arab Bank said it complies with banking laws in all 30 countries where it does business, including the U.S. “The bank abhors terrorism and has not done business with terrorists or terrorist organizations designated by these countries,” it said.

Jordan has interceded on Arab Bank’s behalf in the suits, arguing that the bank is being unfairly punished for failing to turn over what it says are confidential client records. In a November 2010 court brief, Jordan said a set of legal sanctions imposed by the U.S. judge hearing the case could destroy the bank. Because Arab Bank was a crucial cog in the regional economy, that outcome would be “potentially calamitous” for the economies of the Middle East, the brief said.

The appeals court has called a hearing on Nov. 14. However, Arab Bank has asked for it to be postponed as its lawyer cannot make it that day due to a conflict with another case.

While the leaked cables show the U.S. had concerns about illicit money transfers at Arab Bank two years after the 2005 punishment, they also include a U.S. expression of support for the bank. In a July 2008 cable, the U.S. Embassy in Amman said it saw no reason why the U.S. shouldn’t provide financing for Arab Bank and two other Jordanian financial institutions.

“The embassy does not have any information that these banks or their investors have known ties to terrorists, money laundering, corruption, or violations of the law,” it stated.

According to UPI:

A bank in Jordan, a strong U.S. ally in the region, may have unknowingly moved cash for the North Koreans to finance illicit weapons programs, cables suggest.

Sensitive cables distributed by WikiLeaks and reviewed by The Wall Street Journal suggest Jordan’s Arab Bank PLC was used by North Korea to get money from Syria and Iran to help with its proliferation activity.

An August 2007 cable from the U.S. State Department to Washington’s embassy in Amman expressed concern “that Iran, Syria and DPRK (North Korea) proliferation entities are using the Arab Bank network to process what may be proliferation-related transactions.”

Arab Bank, in a statement published by the Journal, said it “does not believe” it carried out business with the North Koreans. The bank was fined in 2005 by U.S. banking regulators for not having mechanisms in place to prevent money laundering and terrorist financing, the newspaper adds.

The cables suggest the Jordanian bank processed the North Korean activity without knowing about it.

The International Atomic Energy Agency, at its regular summer meeting with the board of governors in Vienna, expressed concern about the Syrian, North Korean and Iranian nuclear programs.

I have created  a wikileaks story index which you can see here.

Read the full stories here:
Cables Say Syria, Iran Illegally Moved Cash to North Korea
Wall Street Journal
Thomas Catan
2011-10-7

Jordanian bank tied to illicit weapons?
UPI
2011-10-7

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Japan arrests North Korean on charges of illegal export

Wednesday, October 5th, 2011

Pictured above: An American-made, petrol-guzzling Hummer H2 (MSRP 2008-$53,286; 10 mpg-US;24 L/100 km; 12 mpg-imp) in the parking lot of (I believe) the Yanggakdo Hotel in Pyongyang in September 2010.  The photo comes from here.

UPDATE 2 (2011-10-5): Accoridng to the Mainichi Daily News:

A man standing trial for illegally exporting luxury foreign cars to North Korea was a spy attempting to acquire foreign currency under the guise of a businessman, police allege.

An Sonki, 71, a North Korean resident of Japan, is being tried at the Tokyo District Court on charges of violating the Foreign Exchange Law for exporting three foreign luxury cars to North Korea in 2008.

An traveled to North Korea and China on 40 occasions over the past five years. He is believed to have worked as a broker between North Korea’s state-run companies and foreign firms, while ostensibly working for an electricity-affiliated company in Tokyo almost every day. He managed his own trading company, whose nominal president was a South Korean resident of Japan whom he was acquainted with.

The Metropolitan Police Department (MPD)’s Public Security Bureau had kept track of An since the 1990s because An invited North Korean trade missions to Japan and visited the North Korean passenger-cargo ship Mangyongbong while it was docked at a port in Japan.

The MPD launched a criminal investigation into the illegal export case in June and found that An belonged to a spy agency under the Korean Workers’ Party. An reportedly received instructions from the secretive agency by calling it about once a week from a public telephone.

The MPD also confiscated dozens of contracts and planning documents from locations linked to An. The documents pertained to joint crab and shrimp fishing with Russian companies; the processing and selling of kimchi with Vietnamese companies; scrapping and repairing of ships with Japanese and Chinese companies; cable copper trading with Zambian companies; and importing matsutake mushrooms and snow crabs to Japan.

An’s activities were apparently aimed at brokering joint ventures between North Korean state-run companies and foreign companies, as well as bringing supplies to North Korea. Investigators suspect that An was helping with North Korea’s acquisition of foreign currency and the improvement of power supply in the North.

An was reportedly living a frugal life, renting a six-tatami mat apartment room without a bathroom for 40,000 yen a month. The apartment was not equipped with an air conditioner or television. There was hardly any living ware in the apartment, except for a rice cooker and a compact refrigerator. His lunch box he brought to his company contained only rice and pickled vegetables. He always wore a suit, which was left by a deceased acquaintance. He rarely contacted his separated wife and child.

“I never thought of my own interests but acted in accordance with the agency’s instructions,” An was quoted as telling investigators.

An has not revealed much about the flow of his money. Investigators confiscated 1 million yen in cash and wads of receipts from traveling abroad, but the origin of those funds is unknown.

“His activities are shrouded in mystery. We suspect that the importance of secret agents like him has been increasing in North Korea, which is under economic sanctions,” said a senior MPD official.

During the first hearing of the trial on Sept. 9, An demanded that all charges in the indictments be withheld. How much of his secret activities will be revealed depends on the questioning of the defendant during the ongoing trial.

UPDATE 1 (2011-7-7): According to the Mainichi Daily News:

A North Korean man under arrest for illegally exporting luxury foreign cars to Pyongyang by way of South Korea allegedly disguised the cars as destined for foreign embassies, it has been learned.

An Sonki, 71, a North Korean resident of Tokyo’s Bunkyo Ward, was earlier arrested by the Metropolitan Police Department (MPD) on charges of violating the Foreign Exchange Law for exporting luxury foreign cars to North Korea from Kobe in 2008 under the instruction of the Workers’ Party of Korea’s undercover agency.

According to the latest revelations, the North’s undercover agency instructed An to make the Indian Embassy in Pyongyang one of the final destinations of the exported cars apparently to prevent South Korean authorities from uncovering irregularities when the cars went through the South. The MPD is trying to work out all the facts of the case.

An is suspected to have exported three fancy foreign cars to Pyongyang on two separate occasions in 2008, ferrying the cars from Kobe Port. The export was undertaken by a Tokyo-based trading company called “Godo Holdings,” which is effectively managed by An. The MPD suspects that An is a North Korean agent.

According to the MPD’s Public Security Bureau, An had declared to Japanese customs that the consignee of the luxury cars was a delivery company in Seoul. However, the vehicles were ultimately shipped to North Korea by way of the South, where the items were re-registered as transit cargo. It is believed that the cars were declared as destined for the embassies when they cleared South Korean customs.

Investigators have confiscated from An’s home documents that described a plan to make the Indian Embassy and a Middle Eastern embassy in Pyongyang the final destinations of the cars.

“I was told to make the embassies the nominal destinations of the cars,” An was quoted as telling investigators.

Investigators have also confiscated a North Korean passport, a seal with the name of the undercover agency engraved, as well as a document describing a plan to establish routes to distribute the North’s agricultural and marine products to Japan, the United States and Europe. It has also emerged that An had traveled to South Africa in order to procure rare metals, according to investigators.

An reportedly belonged to a section of the North’s undercover agency that was in charge of Japan.

More on the interesting business dealings of the North Korean embassy in India below.

ORIGINAL POST (2011-6-21): According to KBS:

Japanese police have arrested a North Korean citizen on charges of selling luxury foreign cars to the North through South Korea.

Japanese media said that the North Korean man, who resides in Tokyo and was identified only by his surname “Ahn,” is charged with violating Japan’s foreign currency law.

Ahn is accused of illegally exporting three used Mercedes-Benz cars to North Korea without the Japanese government’s permission. The cars were shipped to the communist country from Japan’s Kobe port via South Korea’s Busan and Incheon between September and December 2008.

This is the first uncovered illegal export scheme to use South Korea as a stopover between Japan and North Korea. China is generally the popular channel for illegal exports between the two nations.

Japanese police also believe that Ahn is a North Korean spy.

Back in May, the DPRK detained two Japanese men for drug smuggling in Rason, and North Korean Embassy officials in India came under investigation for involvement in a luxury car smuggling case worth W100 billion (US$1=W1,091).

Read the full story here:
Japan Arrests N. Korean on Charges of Illegal Export
KBS
2011-6-21

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