Benjamin Katzeff Silberstein
A little over a week after the?Kyodo News interview, Washington Post has also talked to Ri Jong Ho, the former official from Bureau 39 who now lives in Washington DC. The main takeaway from the interview I think, from an economic point of view, is just how far the North Korean economy has gone in its adaptation to its international environment. Rigidity through flexibility, one could call it:
?We were never in pain or hurting in our trade business because of the sanctions. Instead, we conducted our first nuclear test in 2006,? Ri said in an interview near Tysons Corner.
The 59-year-old, whose job had been to raise money for the North Korean regime, and his family live in Northern Virginia, having defected to South Korea at the end of 2014 and moved to the United States last year.
?I used to be sanctioned, as a North Korean who led trade at the front line, but I never felt any pain from the sanctions. The sanctions were perfunctory,? Ri said.
He described being able to send millions of U.S. dollars to North Korea simply by handing a bag of cash to the captain of a ship leaving from the Chinese port city of Dalian, where he was based, to the North Korean port of Nampo, or by giving it to someone to take on the train across the border.
In first the nine months of 2014 ? he defected in October that year ? Ri said he sent about $10 million to Pyongyang this way.
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?Unless China, Russia and the United States cooperate fully to sanction North Korea, it will be impossible to hurt them,? Ri said.
China?s interest in North Korea is well known, but?Russia?s role?in supporting the former Soviet client state?is often overlooked.?Amid calls for China to limit oil exports to North Korea, Russia has dramatically increased the amount of oil it has sent ? some reports suggest exports have quadrupled ? to North Korea this year.
North Korea?s financial networks, moreover, are? intentionally murky. The U.S. Treasury has sanctioned more and more North Koreans and North Korean companies by name to try to cut them off from the American financial system, but few, if any, have any exposure to the United States.
For this reason, Ri?s insights are widely sought after in Washington, where successive administrations have been trying to find North Korea?s pressure points.
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Ri said he worked as president of a shipping company?and was chairman of Korea Kumgang Group, a company that formed a venture with Sam Pa, a Chinese businessman, to start a taxi company in Pyongyang.?Ri suppled a photo of him and Pa aboard a jet to Pyongyang.
He was awarded the title ?hero of labor? in 2002 for his efforts, and said he lived the good life in Pyongyang, with a color TV and a car. ?I was very loyal to Kim Jong Il, so I was rewarded by him,? he said. ?I was rich.?
His last position was running the Dalian branch of Daeheung, a trading company involved in shipping, coal and seafood exports, and oil imports.?The company was given targets to meet in terms of profits, he said, declining to go into details.
But?in 2014,?Ri grew?increasingly?disillusioned after?Kim Jong Un suddenly denounced his uncle, Jang Song Thaek, as a ?traitor for all ages? and had him executed at the end of 2013.
Jang had been leading economic cooperation efforts with China, and dozens of people who worked for him were also purged at the time, Ri said. He worried that his family would be next. They escaped to South Korea before moving to the United States, where his two children, now in their 20s, plan to go to college.
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Ri said North Korea has repeatedly found ways to circumvent whatever sanctions are imposed on it.
?North Korea is a 100 percent state enterprise, so these companies just change their names the day after they?re sanctioned,? he said. ?That way the company continues, but with a different name than the one on the sanctions list.?
Ri?s Chinese counterparts weren?t bothered, either, he said.
?My partners in China also want to make a profit, so they don’t care much about sanctions,? he said. ?When the Chinese government orders them to stop, they stop for a few days and then start up again.?
Growing impatient with Beijing, Washington is increasingly targeting Chinese companies that help North Korea?with what are called ?secondary sanctions.??At the end of last month, the Trump administration blacklisted the Bank of Dandong, located on the border between the two countries, for its dealings with North Korea.
But without knowing how to really hurt North Korea and teaming up to do it, it will be ?impossible? to change Pyongyang?s calculus on the nuclear program, Ri said.
