Archive for the ‘International Governments’ Category

Production at Kaesong Industrial Complex up in 2015

Thursday, July 9th, 2015

According to Yonhap:

The value of production made at an inter-Korean industrial park rose 26 percent in the January-April period from a year earlier despite a drawn-out row sparked by North Korea’s unilateral wage hike, government data showed Thursday.

The value of production at Kaesong Industrial Complex in the North reached a combined US$186 million in the first four months of the year, compared with $148 million a year earlier, according to the Unification Ministry.

In particular, the production at the park rose 21.8 percent on-year to $51.1 million in March and gained 19.7 percent to $50 million in April, when a wage dispute between the two Koreas heightened.

In a separate report unveiled in April, the ministry said that the volume of inter-Korean trade hit a record high in 2014 on growth in exchanges at the industrial park despite Seoul’s punitive sanctions on Pyongyang.

The value of inter-Korean trade reached $2.34 billion last year, up 106.2 percent from a year earlier, it said.

Here is coverage in Arirang News.

Read the full story here:
Production at joint industrial park rises 26 pct in Jan.-April
Yonhap
2015-7-9

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DPRK’s 2015 drought (UPDATED)

Wednesday, July 8th, 2015

Lake-Yonphung-2014-4-7

Lake-Yonphung-2014-9-12

Pictured above in Google Earth: (Top) Lake Yongphung 2014-4-7 (Bottom) Lake Yongphung 2014-9-12

UPDATE 23 (2015-7-15): Writing in 38 North, Randall Ireson asks if the drought is over…

After a month of concern, DPRK farmers have received substantial rains in the last few days, which will at the very least break the current drought. Except for Sinuiju on the Chinese border, weather stations in the western farming region have reported between 3.5 and 7.5 inches of rain between July 10 and 14, with similar amounts falling in Kangwon province.

This is very good news, and will provide adequate moisture for the main crops for the immediate future. The next week is expected to be dry, but another smaller weather system is expected over the weekend. If rainfall for the remainder of the year is at or near normal amounts, adverse effects of the recent dry months will be limited. But July rainfall is still less than half of normal, and crops will need substantial rain into August to insure normal development.

Read the full story here.

UPDATE 22 (2015-7-10): The South Korean Ministry of Unification reports that the drought has eased. According to Yonhap:

The Unification Ministry said Friday that a severe drought that hit North Korea appears to have considerably eased since June as rainfall has almost reached last year’s level in many areas.

North Korea has been grappling with what it called the worst drought in 100 years, sparking concerns about food shortages. South Korea earlier predicted that the North’s crop production could fall by as much as 20 percent if the lack of rain continues into early July.

The ministry said the dry spell seems to have eased in North Korea though several areas in the northeast and midwest provinces are still suffering from the drought.

“North Korea had suffered from severe drought across the nation until May. But it seemed that since July, the situation has considerably eased,” Jeong Joon-hee, ministry spokesman, said in a press briefing.

“But some provinces such as Hwanghae and Hamgyeong provinces are still grappling with prolonged drought, which warrants a close watch,” he added.

The ministry said that the average precipitation in May reached 54.5 percent of that recorded a year earlier. But in June, the rainfall increased to hit almost 90 percent of the level recorded in the same period last year.

Seoul earlier said that it is willing to provide support for North Korea in coping with the drought if the country makes a formal request. There has been no request from Pyongyang.

“Currently, the South government is not considering providing food aid to the North,” said a ministry official, asking not to be named.

UPDATE 21 (2015-7-10): VOA reports that food rations have been cut:

Drought-hit North Korea has reduced food distribution, an official of the U.N. Food and Agriculture Organization (FAO) said Thursday.

Cristina Coslet, FAO’s Global Information and Early Warning System officer in charge of Far East Asia, told VOA the North Korean government informed the agency that the country’s food ration for July was 310 grams per person per day, a 25 percent decrease from the previous month. Between January and June 2015, the average food ration was 410 grams per person per day.

Coslet said a severe drought is affecting the country’s crop production.

“We assume that this is mainly because early planted crops – wheat, barley, potato – decreased considerably,” said Coslet in a phone interview with VOA.

Coslet expected this year’s production of potatoes and winter wheat to drop by more than 20 percent from the previous year.

The FAO official said the early season harvest is relatively small, but it is an important food source for North Koreans.

“Spring crops are vital for food security, being an important food source for the lean season, which stretches from May to September,” said Coslet.

Coslet added, however, that it is still too early to estimate the final harvest, as rainfall in the coming weeks is crucial.

Despite the dismal forecast, the communist country is not known to have sought food assistance from U.N. agencies or Western countries.

UPDATE 20 (2015-7-9): Stephan Haggard offers analysis here.

UPDATE 19 (2015-7-9): UNICEF is worried about the impact of drought. According to the AFP:

A serious drought in North Korea requires urgent action to prevent the deaths of children already weakened by widespread malnutrition, the U.N. children’s fund, UNICEF, warned Thursday.

“The situation is urgent. But if we act now — by providing urgently needed expertise and pre-positioning supplies — we can save lives,” said UNICEF East Asia Regional Director Daniel Toole.

“If we delay until we are certain of crop failures, it may well be too late to save the most vulnerable children,” Toole said in a statement.

North Korea is currently suffering what its official media described last month as the “worst drought in 100 years.” It has severely impacted main rice-growing areas.

According to the U.N. World Food Program, early-harvest crops, mainly wheat and barley, have already been affected.

UNICEF said its personnel had recently met with local health officials in affected provinces who confirmed reports of significant increases in diarrhoea among children.

“Lack of rain reduces access to clean water and undermines effective hygiene, putting children’s lives at risk,” Toole said.

Concern about the impact of the drought is heightened by the existing poor nutritional status of many children in North Korea.

A 2012 study showed one-quarter of all North Korean children had symptoms of chronic malnutrition — a condition usually caused by a combination of unsafe water and poor sanitation, low food intake, and inadequate access to health services.

Toole said responding to the current drought crisis was difficult given North Korea’s isolation and the lack of funding for children-focused programs in the country.

But UNICEF has released pre-positioned emergency supplies to help those in the worst-affected provinces, including water purification tablets, water storage containers and health supplies for children with acute malnutrition.

UPDATE 18 (2015-7-9): A visitor to North Korea has sent this third drought poster. This poster was never published in Rodong Sinmun or KCNA. I have worked to translate it as best as possible, but still not quite there:

z2015-Drought-poster-3z

물절약형농법=An Agricultural Methods to Save Water
밍른봉 얕은갈이=Shallow tillage in early spring
영양알모재배 (?)=Cultivation methodology?
물원전학보관리 (?)=Management of water resources?
간단물대기=Simple irrigation
농업생산에서 일대 전환을!=A complete change/shift through agricultural production!

UPDATE 17 (2015-7-3): Associated Press covers drought in Unpha.

UPDATE 16 (2015-7-1): UN OCHA posts this document on the drought.

UPDATE 15 (2016-6-26): Associated Press covers drought in Hwangju County:

The protracted drought is heightening worries about North Korea’s ability to feed its people. Two-thirds of North Korea’s 24 million people faced chronic food shortages, the United Nations said earlier this month while asking donors for $198 million in humanitarian aid for the country.

Even in South Phyongan and North and South Hwanghae provinces, which are traditionally North Korea’s “breadbasket,” thousands of hectares (acres) of crops are withering away despite good irrigation systems, local officials said.

Reservoirs are drying up, creating irrigation problems for farmers, said Ri Sun Pom, chairman of the Rural Economy Committee of Hwangju County.

A group of female soldiers with yellow towels tied around their heads fanned out across a farm in Kohyon-ri, Hwangju county, North Hwanghae province, with buckets to help water the fields. An ox pulled a cart loaded with a barrel of water while fire engines and oil tankers were mobilized to help transport water.

The North Korean villages of Kohyon-ri and Ryongchon-ri were among several areas that journalists from The Associated Press visited in recent days.

Pak Tok Gwan, management board chairman of the Ryongchon Cooperative Farm in North Korea, said late last week that the farm could lose half its corn without early rain.

Mountainous North Korea, where less than 20 percent of the land is arable, has relied on outside food aid to help make up for a chronic shortage since natural disasters and outmoded agricultural practices led to a famine in the 1990s. North Korean farmers still face shortages of fuel, tractors, quality seeds and fertilizer, the U.N. said in a report earlier this month. Many irrigation systems rely on electrically powered pumping stations in a country with unstable power supplies, the report noted.

On Tuesday, North Korean state media reported record-high temperatures in Pyongyang and other cities in the southwest.

UPDATE 14 (2015-6-25): Yonhap offers a comprehensive story on the drought:

N. Korea claims worst drought in 100 years

SEOUL (Yonhap) — North Korea has claimed again it is suffering from the worst drought in 100 years, while some foreign experts expressed skepticism, saying that the North may be exaggerating the situation in hopes of getting international aid.

The (North) Korean Central News Agency (KCNA) said on June 16 the worst drought in 100 years continues in the country, causing great damage to its agricultural fields.

The KCNA said rice-transplanting has been finished in more than 441,560 hectares of paddies across the country as of June 8, but at least 136,200 hectares of them are becoming parched.

The granaries in North and South Hwanghae provinces and South Pyongan and South Hamgyong provinces have been badly damaged, it claimed.

“Drought dries up rice-seedlings in nearly 80 percent and 58 percent of paddy fields in South and North Hwanghae provinces,” the North’s mouthpiece said, adding that the water level of reservoirs is at its lowest, while rivers and streams are getting dry.

North Korea experts expect the country’s grain production this year to drop substantially if the drought continues through July, which could deal a further blow to its chronic food shortage problem.

A severe drought may reduce North Korea’s rice harvest by 12 percent this year from a year earlier, a report by the Food and Agriculture Organization of the U.N. showed on June 20, warning of the worsening food shortage in the impoverished country.

The latest FAO report put North Korea’s rice production at an estimated 2.3 million tons for this year, compared with the country’s rice harvest of 2.6 million tons a year earlier.

The estimated production may be less than the average amount of rice produced annually over the past five years, it added.

About one-fourth of North Korea’s total 544,000 hectares of rice paddies are being affected by the drought, the report also noted.

The drought may also eat into the country’s production of double crop products, like potatoes, wheat and barley, according to the report, which put the estimated amount at 277,000 tons this year.

North Korea’s North Hwanghae Province, which accounts for a majority of crop production, is sustaining severe damage from the drought, the report said.

North Korea is also reported to be suffering from severe electricity shortages as power generation in hydro power plants, which account for more than 60 percent of the North’s electricity generation, has been hit hard by the drought.

Reuters reported on May 30 that many hydro power plants in North Korea have suspended operation, reducing the nation’s power generation by half.

According to the U.S. Energy Information Agency, North Korea’s electricity generation stood at 19 billion kilowatts in 2012, less than 5 percent of South Korea’s electricity generation in the same year.

There are also reports that North Korea’s claim of the “worst drought in 100 years” was exaggerated.

The drought now gripping North Korea is not yet a “catastrophe,” a U.S. agricultural expert said on June 18, suggesting that the socialist country may be exaggerating the situation.

The report came days after the South’s unification ministry forecast that the North’s grain production will likely drop by up to 20 percent this year from 2014 if a shortage of rainfall continues until early July.

“We need to be a bit cautious before anticipating a new disaster,” said Randall Ireson in an article carried by the website 38 North, citing previous examples in which the North warned of a disaster, but the situation later improved.

“Early last year, the DPRK government also warned about a drought crisis, but later rains allowed a recovery — while rice production fell about 10 percent from 2013, maize production hit a new high,” he said.

In 2012, the North also claimed another “worst drought in a century,” but ultimately a harvest of 4.92 million tons of grain equivalent, which is consistent with the surrounding years, ensued, the expert said.

“The KCNA article claims that no rain has fallen in South and North Hwanghae provinces. That is hyperbole,” he said, adding that precipitation data show a total of 181 millimeters at Haeju and 102 mm at Sariwon since March.

“While substantially below the historical average (330 mm for Haeju, unavailable at Sariwon), it is hardly ‘no rain,'” he said.

Rain has also fallen in the last few days in what could be the beginning of an annual monsoon season, he said.

“So while one has a right to be concerned, it’s not yet a catastrophe. If the rains of the last few days presage the arrival of the monsoon, then all may turn out fine. If there’s no change in the next couple of weeks, then we should start to worry,” he said.

The U.S. State Department also has ruled out a plan to give aid to North Korea in relation with the current drought.

The Voice of America reported on June 3, quoting a department spokesman, that the department has no plan to offer aid to North Korea at present and North Korea has not asked the U.S. for help yet.

Meanwhile, South Korea said it is ready to support North Korea, Seoul’s pointman on inter-Korean affairs has said.

Unification Minister Hong Yong-pyo said on June 24 that Seoul is willing to offer the necessary support to the North if the North’s situation deteriorates, but added that the South will wait for Pyongyang’s request.

“At a time when the two Koreas are coping with drought, I think that this situation can be a chance to promote cooperation,” Hong said in a meeting with a group of reporters. “If North Korea faces tougher situations, South Korea is willing to provide the necessary support to North Korea.”

He did not elaborate on the kinds of support.

Seoul, however, does not have any immediate plans to make such a proposal to the North pre-emptively, he said, hinting that Seoul needs Pyongyang’s request for help.

“The South is carefully reviewing how to approach this matter,” he added.

In 2014, the North reported its lowest amount of rainfall in 15 years and the United Nations has warned that North Korea is likely to suffer from serious food shortages this year.

The North has relied on international handouts since 1995 to help feed its people in the face of chronic food shortages.

A U.N. report showed that about 70 percent of North Korea’s 24.6 million people suffer from food shortages and 1.8 million, including children and pregnant women, are in need of nutrition.

Meanwhile, Hong expressed regret over the North’s boycott of the upcoming Summer Universiade in South Korea due to political reasons, saying that the sports competition could be a good chance for dialogue.

The North issued a rare statement on June 15 that it is ready to hold dialogue with Seoul if certain conditions are met, including the suspension of the South’s joint military drills with the United States. North Korea, however, took tough measures less than 10 days after the dialogue proposal, including the boycott of the Universiade and sentencing two South Koreans it has detained to lifetime compulsory labor, accusing them of spying for South Korea’s intelligence agency.

UPDATE 13 (2015-6-23): Associated Press publishes images of drought in Nampho.

UPDATE 12 (2015-6-22): Anna Fifield reports in the Washington Post that the chances of a famine returning are slim.

UPDATE 11 (2015-6-22): Marcus Noland offers analysis here.

UPDATE 10 (2015-6-20): Drought may cut N. Korea’s 2015 rice harvest by 12 pct: FAO. According to Yonhap:

A severe drought may reduce North Korea’s rice harvest by 12 percent this year from a year earlier, a report by the Food and Agriculture Organization of the U.N. showed Saturday, warning of the worsening food shortage in the communist country.

The recent FAO report put North Korea’s rice production at an estimated 2.3 million tons for this year, compared with the country’s rice harvest of 2.6 million tons a year earlier.

The estimated production may be less than the average amount of rice produced annually over the past five years, it added.

About one-fourth of North Korea’s total 544,000 hectares of rice paddies are being affected by the drought, the report also noted.

The drought may also eat into the country’s production of double crop products, like potato, wheat and barley, according to the report, which put the estimated amount to 277,000 tons this year.

North Korea’s North Hwanghae province, which accounts for a majority of crop production, is sustaining severe damage from the drought, the report said.

UPDATE 9 (2015-6-19): The Daily NK is reporting in an article price information that is different than its exchange rate/rice price table. Here is a small table that shows the difference:

DailyNK-price-discrepancy-2015-6-19

The exchange rate and rice price differences are not all that significant, and could be related to variations in when they were collected. However, the article text implies that potatoes are the only crop seeing more significant price increases at the moment (and only in Hyesan):

 

According to an inside source, the cost of potatoes in Yangkang Province’s Hyesan Agricultural Market is approximately 2,000 KPW per kg. This represents a massive 1,300 KPW rise when compared to last year’s prices. It’s quite rare to see the cost of potatoes shoot up to the 2,000 KPW mark. This has sent residents into a minor panic. For the same price, it would have been possible to buy about three times as many potatoes this same time last year. This is putting a strain on many residents’ ability to put together a nutritious meal. At the Hyesan jangmadang, corn is selling for 1,800 KPW per kg. Next to that figure, it’s plain to see that the relative cost of potatoes is exorbitantly high. Residents can protest, but at the end of the day, they don’t have any better options.

The article lists other prices, but does not explain any price changes, so I do not know if they have significnatly increased:

Moving along, the cost of 1 kg of corn was 2,400 KPW in Pyongyang and Sinuiju and 2,600 KPW in Hyesan. One kg of pork was selling at 14,000 KPW in Pyongyang, 14,300 KPW in Sinuiju, and 15,000 KPW in Hyesan. Gasoline was trading at 9,450 KPW per kg in Pyongyang and Sinuiju and at 8,450 KPW per kg in Hyesan. Finally, 1 kg of diesel fuel was selling at 5,100 KPW in Pyongyang and 5,200 KPW in Sinuiju and Hyesan. This has been a weekly rundown on North Korea’s latest market prices.

And if you noticed in the above two quotes, the article gives two prices for the price of corn in Hyesan (1,800 and 2,600), so I am not sure what to make of that.

UPDATE 8 (2015-6-18): Marcus Noland offers analysis here and here.

UPDATE 7 (2015-6-18): China Says it is willing to help drought-hit North Korea (Reuters):

China’s Foreign Ministry said on Thursday that the government was willing to help drought-stricken North Korea, after the isolated country said it was suffering its worst drought in a century.

“Our sympathy goes out to the People’s Republic of Korea that is suffering from extremely serious drought, and it is our hope that the government and people will overcome the disaster as soon as possible,” spokesman Lu Kang told a daily news briefing, using North Korea’s official name.

“China is willing to provide the aid that is needed by the Democratic People’s Republic of Korea,” he added, without providing details.

The US says it has no plans to assist the DPRK in the event of a drought. According to Yonhap:

The United States said Wednesday it has no plans to provide food aid to North Korea amid concern food shortages in the impoverished communist nation could significantly worsen due to what the country calls the worst drought in a century.

“I’ve seen the reports about the drought. I don’t have any specific information about the validity of the drought,” U.S. State Department spokesman John Kirby said at a regular briefing in response to a question about the North’s report.

Asked if the U.S. would consider providing food aid, Kirby said, “I’m not aware of any such plans. No.”

UPDATE 6 (2015-6-18): In 38 North, Randall Ireson reports we should take a care when assessing the impact of North Korea’s drought.

The KCNA article claims that no rain has fallen in South and North Hwanghae provinces. That is hyperbole. Precipitation data show a total of 181 mm at Haeju and 102 mm at Sariwon since March. While substantially below the historical average (330 mm for Haeju, unavailable at Sariwon), it is hardly “no rain.” In both locations there were substantial rains in the last several days (61 mm in Haeju, 48 mm in Sariwon). Other locations show a similar pattern of sharply lower rainfall than average, but a recent uptick: Pyongyang has had 143 mm since March, 27 mm in the last week, compared to a March-June average of 230 mm. Anju reported 202 mm since March, 78 mm last week, against a March-June average of 320 mm.[7] So while one has a right to be concerned, it’s not yet a catastrophe. If the rains of the last few days presage the arrival of the monsoon, then all may turn out fine. If there’s no change in the next couple of weeks, then we should start to worry.

Read the full report here.

UPDATE 5 (2015-6-18): The Daily NK reports that the price of rice is basically constant in Pyongyang and Sinuiju this year, though the price shows significant variation in Hyesan:

 Daily-NK-2015-food-prices

UPDATE 4 (2015-6-16): KCNA reports drought this year:

The worst drought in 100 years continues in the DPRK, causing great damage to its agricultural field.

According to data available, rice-transplanting has been finished in over 441 560 hectares of paddy fields across the country as of June 8, but at least 136 200 hectares of them are parching up.

The granaries including North and South Hwanghae provinces and South Phyongan and South Hamgyong provinces have been badly damaged.

Drought dries up rice-seedlings in nearly 80 percent and 58 percent of paddy fields in South and North Hwanghae provinces.

According to the State Hydro-meteorological Administration, no rainfall has been witnessed in North and South Hwanghae provinces.

Water level of reservoirs stands at the lowest, while rivers and streams getting dry.

Other crops are planted in paddy fields of drought-stricken areas as part of the campaign to reduce damage.

UPDATE 3 (2015-6-11): WFP on standby for possible N. Korea drought. According to Yonhap:

The United Nations food agency is closely monitoring the weather conditions in North Korea in order to send emergency assistance there in case of a protracted dry spell, the agency’s regional director in Asia said Wednesday.

South Korea said a day earlier that food production in North Korea may fall by 20 percent on-year if the current drought continues until early July.

“The concern is going to grow week by week until we get closer to the traditional July harvest,” David Kaatrud of the World Food Program (WFP) told Yonhap News Agency in an interview. “So our role is to not only be vigilant … but also stand ready should assistance be required to change our operation toward relief related to any type of food insecurity.”

Last month, North Korea received less than 60 percent of the average monthly rainfall recorded between 1981 and 2010. Precipitation reached a 15-year low last year, with the U.N. warning of severe food shortages should the dry weather there continue.

The WFP has mainly focused on providing nutrition to the most vulnerable, or about 2.4 million children and women, for the past two years.

It recently extended the two-year project, slated to end this month, through the end of 2015.

“We need enough time to refine the intervention we’re doing now,” he said. “The broad contours of what we will be doing next would be very similar to what you see now — it will continue to be focused on a targeted nutrition intervention because that’s what’s required there.”

He reiterated that the WFP was ready to shift its targeted intervention to a more widespread one in case of a severe food crisis.

“But we don’t have any indications (of that) yet,” he said.

The North has relied on international assistance since 1995 to help feed its people in the face of chronic food shortages.

About 70 percent of its people lack food and 1.8 million, including children and pregnant women, are malnourished, according to U.N. data.

The WFP is the U.N.’s largest humanitarian aid arm, accounting for more than 60 percent of the world’s food assistance.

South Korea’s contributions to WFP operations globally reached US$31 million last year.

The two sides held their first annual consultations Wednesday, cementing their commitment for the Zero Hunger Challenge pioneered by U.N. Secretary-General Ban Ki-moon. The challenge aims to ensure that every person has a right to adequate food.

UPDATE 2 (2015-6-9): N. Korea’s crop production may fall 20% in drought. According to Yonhap:

North Korea is likely to see its food production fall by up to 20 percent this year from 2014 if a shortage of rainfall continues until early July, a Unification Ministry official said Tuesday.

In May, precipitation in North Korea reached 57 percent of the average rainfall recorded between 1981 and 2010, according to the official.

In 2014, the North reported its smallest rainfall in 15 years and the United Nations has warned that North Korea is likely to suffer from serious food shortages this year due to drought.

North Korea’s crop production could decline by 15 to 20 percent this year compared to last year if it continues to see a rainfall shortage until early July, the official said.

The North is expected to see its food production fall by only 5 to 10 percent if the lack of rainfall continues into early June. In that case, North Korea is believed to be focusing on producing maize as an alternative to rice.

“This year, the supply of fertilizer is not smooth, compared with last year,” said the official, asking not to be named.

The North has relied on international handouts since 1995 to help feed its people in the face of chronic food shortages.

A U.N. report showed that about 70 percent of North Korea’s 24.6 million people suffer from food shortages and 1.8 million, including children and pregnant women, are in need of nutrition.

Last year, the North suffered from a severe drought in the spring, but managed to produce crops at a level similar to that of 2013 due mainly to the use of preserved water.

The official said that the North’s agricultural reforms might have helped it maintain the food production last year, but this year’s situation may bode ill, given that fertilizer availability is worse.

In 2012, the North announced the so-called “6.28 measures” that centered on allowing farmers to keep 30 percent of their production quota plus any excess over the quota. Last year, it unveiled a new set of reforms that call for raising the farmers’ portion to 60 percent.

UPDATE 1 (2015-6-3): KCNA reports that two posters have been produced to instruct/motivate people to overcome hardships brought on by drought:

KCNA-2015-6-3-Drought-posters

According to Anna Fifield at the Washington Post, the posters say  “Everybody fight against the drought!” and “Let’s all fight powerfully against the drought!”.

ORIGINAL POST (2015-5-31): On 2015-5-11 I reported in Radio Free Asia that many of North Korea’s reservoirs have shown a fall in water levels from 2012 to 2014. This was more evidence of a drought that had struck the country in 2014, and that if it continued, it could affect food and electricity production.

On May 30, Reuters reports that the UN is warning of another drought:

A drought in North Korea could lead to huge food shortages this year, the top U.N. official in the country told Reuters in an interview.

Rainfall in 2014, the lowest in records going back 30 years, was 40-60 percent below 2013 levels, and reservoirs are very low, said Ghulam Isaczai, the U.N. resident coordinator.

“We’re extremely concerned with the impact of drought which will affect the crop this year severely. And we might be faced with another major incident of food availability or even hunger,” said Isaczai. “It is going to create a huge deficit between the needs and what is available.”

If El Nino weather conditions bring more drought this year, the situation in 2016 could be even worse, he warned.

“This is currently the rice-planting season. Normally they submerge the land almost a week or two in advance. But this year, I’ve seen it myself – they’re doing it in the dry, actually planting rice. So what we’re hearing right now is that they’re switching to maize and corn because that requires less water.”

Some farmers, already struggling with a shortage of fuel and equipment, have resorted to using buckets to water seedlings, he said. The effect of North Korea’s lack of agricultural infrastructure such as irrigation systems was visible on the border, where “dry and harsh” North Korean land met green fields in China.

A famine in the 1990s killed as many as 1 million North Koreans but recently many international donors have been reluctant to help because of Pyongyang’s restrictions on humanitarian workers and international concerns over its nuclear ambitions.

“Let’s not make aid political,” Isaczai said.

ELECTRICITY HIT

The United Nations provides nutritional supplements to schools and hospitals but does not have the funds to supply rice for North Korea’s 24.6 million population, 70 percent of whom are already classed as “food insecure”.

“How are they going to fill this gap? I think they have reached out to some countries – to India, to China, to Russia,” Isaczai said.

The lack of water has dried up rivers and streams and has also hit electricity supply, which was at its worst in winter when hydroelectric power was restricted to reserve water for the rice-planting season.

“What the government confirmed to me is that they’re operating at 50 percent of capacity in terms of power generation. A lot of it is now related to water,” the U.N. official added.

Blackouts in Pyongyang last anything from 8-9 hours to a whole 24 hours and many hospitals are unable to operate.

Isaczai said he thought the food situation would not be as bad as in previous major droughts, since communities were now more resilient and might have some reserves.

New farming rules – which allow smaller, family-sized teams to run farms – meant more efficiency and ownership, he said, with families allowed to keep livestock and farmers able to keep surplus crops.

“Also there are small markets emerging in rural areas, like kind of farmers’ markets where people can barter or trade or sell things.”

Some people were also selling food on the street, which might be a few eggs or apples, enabling families to supplement the food they get from the national ration system.

The reforms may not be fast or widespread, Isaczai said, and the impact may take three to five years to be felt.

The government also set a target last year of building 20,000 greenhouses, he said, which would make more vegetables available and diversify diets, but the country needs help to build them.

Read the full story here:
U.N. warns of coming hunger in North Korea
Reuters
Tom Miles
2015-5-30

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DPRK emigration numbers in 2015

Sunday, July 5th, 2015

According to Yonhap:

The portion of female North Korean defectors topped 80 percent this year, government data showed Sunday, apparently because North Korean women are under less severe scrutiny by the communist country.

The number of female North Koreans who came to the South reached 444 in the January-May period, accounting for 83 percent of the 535 North Koreans who came to the South, according to the unification ministry.

The data was compiled tentatively as the government’s background checks for North Korean defectors have not been completed, it said. Around 30,000 North Koreans have defected to South Korea in search of freedom so far.

Since the portion of female North Korean defectors topped the 50 percent mark for the first time in 2002, the weight has been on the rise, the data showed.

In particular, since North Korean leader Kim Jong-un took office in late 2011, the portion has increased above the 70 percent mark. The corresponding data reached 75.6 percent in 2013 and came in at 78.2 percent in 2014.

Experts said that it might be easier for women to flee the communist country as they are relatively less scrutinized by North Korean authorities.

Meanwhile, the number of North Koreans who defect to the South has been on the decline since 2011, the data showed.

In 2014, the number of defectors reached 1,396, down 48.4 percent from 2011, it said.

“Regardless of sex, the number of North Korean defectors has been falling,” a unification ministry official said. “The trend is likely to continue this year as well.”

While the number of North Koreans coming south has been on the decline since Kim Jong-un came to power, there has been a flurry of media reports recently that indicate that the number of high-level defectors leaving the country is on the increase.

According to the Chosun Ilbo (2015-7-2):

About a dozen senior North Korean officials have defected in recent years because they feared for their lives in leader Kim Jong-un’s purges, a source said Wednesday.

The defectors were working in China and Southeast Asia, some charged with earning hard currency for the regime.

Several have already arrived in South Korea while others are staying in a third country.

Early this year, a mid-ranking official who had been dispatched to Hong Kong from Room 39, a Workers Party office that handles Kim’s slush funds, sought asylum in South Korea with his family.

He reportedly told investigators here he was terrified of Kim’s draconian purges, which saw senior officials executed by anti-aircraft gun, and that officials left in North Korea find it almost impossible to flee because of tight controls but those working overseas can find some opportunities to defect.

Last year, a senior official of Taesong Bank, who had handled Kim’s slush funds in Siberia, fled to South Korea with millions of dollars. Even a senior official of the State Security Department fled the North and arrived here. According to the National Security Service here, the defection particularly upset Kim.

An army general has been staying in a third country since he fled the North recently, according to sources. The general was reportedly involved in the two inter-Korean summits in 2000 and 2007.

The defections highlight the climate of fear among senior apparatchiks since the brutal execution of Kim’s uncle and one-time eminence grise Jang Song-taek, as well as that of former armed forces minister Hyon Yong-chol.

In a report to the National Assembly, the NIS claimed that the North executed more than 70 senior party, government and military officials by firing squad since Kim took power.

And According to Yonhap (2015-7-6):

North Korea may continue to see its officials desert the communist country to settle abroad down the road, but the exodus is not likely to lead to the collapse of the regime, experts said Monday.

North Korea is believed to be coping with an increased number of defections by government officials as of late with frequent fears of purging and punishment haunting North Korean officials under leader Kim Jong-un.

About 10 North Korean military and party officials have reportedly fled the communist country recently in their pursuit of asylum in South Korea or in a third country.

Those defectors reportedly included a mid-ranking North Korean party official who sought asylum in the South with his family early this year while he was managing slush funds in Hong Kong for leader Kim.

Another high-ranking military official also reportedly has been staying in a country outside of South and North Korea since fleeing the communist country.

The recent outflow may continue in the future as more officials terrified of Kim’s “reign of terror” are likely to renounce their allegiance to the communist country, experts noted.

“For the time being, North Korean officials are likely to continue to flee the communist country or seek asylum, which would weaken the regime of the North’s leader Kim Jong-un,” said Chang Yong-seok, a researcher at the Institute for Peace and Unification Studies at Seoul National University.

Kim Yong-hyun, a professor of North Korean studies at Dongguk University, also noted, “Desertion by these people may take place intermittently in the process of solidifying the Kim Jong-un regime and securing the regime’s stability.”

Since taking power in late 2011 after his father Kim Jong-il’s sudden death, the junior Kim has resorted to unusually brutal means to solidify his power base.

In late 2013, Jang Song-thaek, the husband of Kim’s aunt and once the country’s second most powerful official, was executed on charges of treason, along with many other officials with close ties with Jang.

Former defense chief Hyon Yong-chol was also purged in late April apparently due to his disloyalty to Kim.

Still, experts stressed that the terror-driven exodus may not immediately lead to a collapse of the Kim regime although it is likely to resort to military provocations outside the country in order to quell potential political instability inside.

“If Kim’s reign of terror prolongs, his governing style could bring about an instability in the communist country,” said Jung Sang-don, a research fellow at the Korea Institute for Defense Analyses (KIDA). “Then, there is a possibility that North Korea could make provocations in a bid to tide over its internal problems.”

Yang Moo-jin, a professor at the University of North Korean Studies, also dismissed the view that a series of defections by officials meant instability in Kim’s regime, saying that there have been no signs of abnormal activities among the North Korean military power or other citizens.

Here is coverage in the Korea Times.

Read the full story here:
Portion of female N. Korean defectors tops 80 pct this year: data
Yonhap
2015-7-5

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Kaesong Complex outlet opens in Seoul

Saturday, July 4th, 2015

According to the Joong Ang Ilbo:

Despite the fact that personal exchanges between North and South Koreans are rare, products made by North Korean laborers can easily be found here in the capital area.

Kaesong Joint Industrial Complex Cooperatives, which sells men’s clothing and textiles produced at industrial facilities in the North, opened a branch June 17 in Jongno District, central Seoul, with donations from 12 companies, at the inter-Korean venture park.

The joint industrial complex was established in 2004 in Kaesong, the most southern city in North Korea. Currently, 124 companies from South Korea run operations there, with 60 percent related to textiles.

The entrance to the new store is designed to appear like a rail road stop, with a sign to its right reading: “To the world, along the rail road.”

“It shows our dream to reach Europe by train with our products after unification,” said Lee Jong-deok, the store’s deputy chief director.

Products from the joint industrial complex can already be found in other stores in South Korea; however, the 12 companies reportedly decided to run their own shop in an attempt to dispel negative public opinions surrounding the industrial complex, the last remaining symbol of inter-Korean cooperation.

“We designed the inside of the store with light white colors to do away with this unfavorable image around Kaesong,” said Je Jeong-oh, the operations director.

According to Je, the industrial complex is the only place where both Koreas can truly cooperate with each other, and despite the wage issue, the employees from the South and North employees are hospitable toward one another.

The store sells products without retail margin, with prices much cheaper than market value. A coat made of 100 percent cashmere, for instance, can be purchased for 299,000 won ($267) in the store.

When the JoongAng Ilbo inquired about a similar product at a department store, an employee there answered that the asking price would be at least 700,000 won.

“The quality of the fabrics is good, and most of all, the needlework on the products is perfect,” said one shopper, Sin Mi-yeong, 61. “I’m surprised by how low the prices are here.”

Unification Minister Hong Yong-pyo visited the store on opening day and reportedly purchased some clothing.

“I see it as a place where visitors can physically experience a sense of unification,” he said at the time.

And even with its fledgling status, the store already has regulars. Choe Beom-jin, who runs a supermarket next to the shop, remarked that he would only buy his clothes there from now on.

Meanwhile, the store’s management board has ambitious plans for its line: Products labeled with the store’s name will be on display during Hong Kong Fashion Week, which will run from Monday to Thursday.

Seven more branches are also set to open nationwide by year’s end.

“It takes 90 minutes by car to reach Kaesong from Seoul,” Je said. “It’s just sad we can’t make the trip, even if we wanted to. I hope the store serves as a starting point to unification.”

Read the full story here:
Kaesong items prove a hit in Seoul
Joong Ang Ilbo
Chun Su-jin
2015-7-4

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UK publishes an updated list of sanctioned DPRK individuals/entities

Saturday, July 4th, 2015

You can see the list here (PDF). I have added this to my DPRK economic statistics page.

There is no similar list (as best I can tell) published by the US government (Please correct me if I am wrong). But links to tools created by the different offices in the US government can be found on my DPRK economic statistics page. I suspect a little research on with tools could be used to produce such a list. The closest I have seen to a complete list is here (PDF).

UPDATE: Josh Stanton offers this link.

NK News reports that the European Commission also tightened sanctions on the DPRK.

See Josh Stanton’s summary here.

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North Korean company advertisements appear in World Cup preliminary match

Friday, July 3rd, 2015

Institute for Far Eastern Studies (IFES)
2015-7-3

North Korea has attracted attention after it recently featured a number of corporate advertisements in a preliminary match of the 2018 Russian World Cup.

In the past, North Korea rejected everything related to capitalism. But since Kim Jong Un’s rise to power it appears to be actively using sports and commercial capital in order to attract foreign capital as its market economy rapidly expands.

On June 16, 2015 Korean Central Television (KCTV) broadcast the second match of the Russian World Cup Asian qualifying rounds. The match, in which North Korea and Uzbekistan played, was held at Pyongyang’s Kim Il Sung Stadium, where advertisements by North Korean companies such as Kaesong Koryo Ginseng and the Pyongyang Building Materials Factory appeared in force. Kaesong Koryo Ginseng and Choson Kumgang Group in particular appeared to have spent a lot of money sponsoring the event, as every most ads belonged to one of these companies. Conspicuous among the advertisements were those from companies that have not been well-known in the outside world, such as Malgun Achim (literally ‘clear morning’), a manufacturing company known in North Korea for producing IT products such as computers. Exhibiting numerous ads for North Korean companies at an international sports event and broadcasting the event on TV to the world is rather unprecedented behavior for North Korea.

When the 27th Mangyongdae Prize International Marathon was held in Pyongyang in 2014, not only were there no ads for North Korean companies, but there were no ads for foreign companies either. As a result British contestant Will Phillips, who qualified to participate in the marathon as a foreign amateur athlete, remarked at the time, “It feels like time just stopped in the ‘60s.” However, an article appeared in the January 2015 edition of the Kim Il Sung University Bulletin that emphasized the importance of advertisements in attracting investment and gave specific instructions to heed the publication times of major foreign newspapers and even pay attention to broadcast ratings. Since then North Korea has paid attention to foreign advertisements and has really upped its efforts to attract foreign currency.

As the market economy spreads rapidly in the Kim Jong Un era, this event is viewed as a sign of change in North Korea’s foreign economic policy. The promotion of North Korean companies in a preliminary round of the World Cup, which relatively many foreigners can view, is interpreted as an attempt to ultimately attract foreign capital. At the same time, it appears there is a dimension of inducing competition between North Korean companies to boost domestic demand. This event can also be connected to one of the characteristics of the Kim Jong Un regime, which emphasizes and encourages physical education throughout the state. Such a scene, which seamlessly joins sports with commercial capitalism, is unprecedented for North Korea.

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Rason serves as Hunchun port (again)

Thursday, July 2nd, 2015

Back in 2011, an experimental project saw the shipment of coal from Hunchun (China) to Shanghia via the North Korean port of Rason. Since then, no such effort is known to have been repeated.

Until now, apparently…

According to UPI:

A maritime route that includes the North Korean port of Rajin has enabled Chinese shippers to significantly reduce costs over a more time-consuming land route, South Korean news agency Yonhap reported.

Chinese cargo from the northeastern city of Hunchun has made the journey to bustling Shanghai twice in June, according to Chinese authorities.

Hunchun officials said 38 containers that left the city on June 24 arrived in Shanghai on June 27, and on June 11, 42 containers were delivered to China’s eastern coast – all using Rajin as a key point where cargo could be loaded onto ships.

I have not been able to locate any additional information.

Read the full story here:
China, North Korea cooperate on Rajin shipping route
UPI
Elizabeth Shim
2015-7-2

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Humanitarian aid to DPRK almost flat on-year in H1 2015

Wednesday, July 1st, 2015

According to Yonhap:

The growth of humanitarian aid sent to North Korea stayed almost flat in the first half from a year earlier, a U.N. agency said Wednesday, raising concerns about food shortages in the North.

The global community’s humanitarian assistance to the North amounted to a combined US$21.3 million in the January-June period, compared to $20.6 million in the same period last year, according to data compiled by the United Nations Office for the Coordination of Humanitarian Affairs.

But the figure in the first half marked a 40 percent decline when compared to $35.6 million in the first half of 2013, it showed.

The U.N. and six countries — South Korea, Switzerland, Sweden, Canada, France and Germany — supplied humanitarian aid to Pyongyang this year.

Switzerland was the top donor with $9.17 million, or 43 percent of the total aid, followed by South Korea with $4 million and Sweden with $3.23 million, the data showed.

By type, food and nutrition aid topped the list with $9.64 million worth contributed, followed by healthcare work at $6.2 million, and the supply of drinking water at $2.4 million, it said.

A separate U.N. report showed that about 70 percent of North Korea’s 24.6 million people are suffering due to food shortages and 1.8 million, including children and pregnant women, are in need of nutritional food supplies aimed at fighting malnutrition.

Aid from China and Russia would not appear in this study.

Read the full story here:
Humanitarian aid to N. Korea almost flat on-year in H1
Yonhap
2015-7-1

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US group seeks to seize Mudu-bong

Tuesday, June 30th, 2015

According to the Jerusalem Post:

Shurat Hadin – Israel Law Center on Tuesday requested that Mexico permit it to seize an impounded North Korean ship to satisfy a $330 million it won against Pyongyang in April in a US civil damages trial for wrongful killing of a Christian priest.

Mexico impounded the 6,700-ton Mu Du Bong for illegal weapons smuggling on its way from Cuba to North Korea following notification by UN sanctions monitors that the ship belonged to a blacklisted firm. The ship ended up accidentally landing on the Mexican coast and North Korea has protested Mexico’s continuing to hold on to the ship.

The Tel Aviv-based NGO hired Mexican lawyer Alberto Mansur to request that Mexico honor and enforce the US court ruling as part of its obligations to honor foreign judgments under the Hague Convention.The April judgment, which also included findings by a US federal court in Washington that North Korea had kidnapped, tortured and killed South Korean-American Rev. Kim Dong Shik, included $15m. each to Shik’s son and brother as well as $300m. in punitive damages.

Dong Shik, a South Korean who was a permanent resident of the US and had spent seven years providing aid and proselytizing to North Korean defectors who tried to escape via China, was abducted in China in 2000. In 2005, a South Korean court convicted an ethnic Korean of his abduction in concert with North Korean intelligence.

Shurat Hadin said that it hoped that the context of the requested seizure, the North Korean outlaw regime ignoring weapons smuggling laws and flouting UN resolutions, would help its case since it tied into Pyongyang’s massive human rights violations in abducting and murdering innocent persons, which was at the heart of the Dong Shik judgment.

The judgment was a default judgment in which the defendant, North Korea, did not even appear at trial, leading most to predict that it would go unenforced since default judgments are notoriously hard to collect on, especially with a regime such as North Korea, which has few connections to the West.

After the April judgment, Shurat Hadin said the family was investigating all the possible avenues to collect the judgment against North Korean assets including seizing bank accounts, property and shares in foreign companies in the United States and abroad.

But even Shurat Hadin admitted that Mexico’s seizure of the ship was a shocking gift and unexpected opportunity to collect on the judgment. The NGO’s President Nitsana Darshan- Leitner said that “North Korea should know that we are actively tracking its assets and looking to seize them everywhere in the world. This outlaw regime must be taught that it cannot abduct and murder foreign citizens and that eventually there will be a price to pay.”

“There is no reason why this boat which clearly belongs to North Korea cannot be used to satisfy our judgment,” she said.

In the April judgment against North Korea, the court said that the two $15m.

and the $300m. damages awards were consistent with comparable cases against North Korea and Iran for other similar wrongful actions and recognized the tremendous suffering by Dong Shik’s family members.

In December 2014, Shurat Hadin convinced a US federal appeals court to grant default judgment against North Korea on liability, paving the way for April’s massive damages award by the lower district court.

The ruling by the US Appeals Court for the District of Columbia, written by Judge David S. Tatel, reversed an earlier district court ruling that had dismissed the case, despite North Korea failing to defend itself, on the grounds that the plaintiffs had failed to present any direct evidence of what happened to Dong Shik.

The appeals court based its ruling on proof that Pyongyang kidnapped Dong Shik, a wealth of information about it torturing and killing prisoners, its systematic attempts to block direct evidence from emerging and its failure to counter the plaintiffs’ claims.

The ruling was also significant because it allowed a case to go forward based on the “terrorism exception” to the US Foreign Sovereign Immunities Act, which somewhat broadens the paths and precedents open to suing foreign nations for terrorist acts.

Read the full story here:
NGO seeks to seize N. Korean ship to pay off $330 m. US judgment for killing of priest
Jerusalem Post
Yonah Jeremy Bob
2015-6-30

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DPRK and FATF (UPDATED)

Monday, June 29th, 2015

UPDATE 8 (2015-6-29):  FATF says member states should pay “special attention” to financial transactions with North Korea. According to VOA:

The Paris-based Financial Action Task Force last week reaffirmed its earlier decision to put the community country on its watch list because of North Korea’s “failure to address the significant deficiencies in its anti-money laundering and combating the financing of terrorism,” the task force said in a public statement released on its website. It said that failure poses “serious threat … to the integrity of the international financial system.”

The task force had a plenary meeting last week in Brisbane, Australia.

“The FATF reaffirms its 25 February 2011 call on its members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with the [Democratic People’s Republic of Korea], including DPRK companies and financial institutions,” it said.

The group also expressed concern about the North’s noncompliance with its recommendations to fight money laundering.

In an apparent attempt to ease financial sanctions by the United States and the United Nations, the North promised steps to address money laundering concerns. In July 2014, Pyongyang announced it had joined the Asian affiliate of the anti-money laundering body as an observer. Later, the North sent a letter to the FATF indicating its commitment to implementing actions recommended by the group.

The FATF, created in 1989, has 36 members, comprising 34 member countries and territories and two regional organizations.

UPDATE 7 (2015-3-16): Following the FATFs statement regarding the DPRK on February 27, the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a new advisory.

Read the full advisory here (PDF)

Here is coverage in Yonhap.

UPDATE 6 (2015-2-17): The FATF has issued another statement on North Korea:

The Financial Action Task Force (FATF) is the global standard setting body for anti-money laundering and combating the financing of terrorism (AML/CFT). In order to protect the international financial system from money laundering and financing of terrorism (ML/FT) risks and to encourage greater compliance with the AML/CFT standards, the FATF identified jurisdictions that have strategic deficiencies and works with them to address those deficiencies that pose a risk to the international financial system.

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/FT) risks emanating from the jurisdictions.

Iran
Democratic People’s Republic of Korea (DPRK)

Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction, as described below.

Algeria
Ecuador
Myanmar

———–
Democratic People’s Republic of Korea (DPRK)

Since October 2014, the DPRK sent a letter to the FATF indicating its commitment to implementing the action plan developed with the FATF.

However, the FATF remains concerned by the DPRK’s failure to address the significant deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime and the serious threat this poses to the integrity of the international financial system. The FATF urges the DPRK to immediately and meaningfully address its AML/CFT deficiencies.

The FATF reaffirms its 25 February 2011 call on its members, and urges all jurisdictions, to advise their financial institutions to give special attention to business relationships and transactions with the DPRK, including DPRK companies and financial institutions. In addition to enhanced scrutiny, the FATF further calls on its members, and urges all jurisdictions, to apply effective counter-measures to protect their financial sectors from ML/FT risks emanating from the DPRK. Jurisdictions should also protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices, and take into account ML/FT risks when considering requests by DPRK financial institutions to open branches and subsidiaries in their jurisdiction.

UPDATE 5 (2015-2-4): NK News picked up the Choson Sinbo piece and offered these comments:

But other regime watchers suggested that there are at least certain segments of the North Korean elite who do indeed want money laundering combated.

“There’s a cohort of DPRK businessmen who want the country to take more active steps in dealing with financial improprieties because they are losing money or opportunities,” said Michael Madden of North Korea Leadership Watch. “The DPRK leadership, particularly Foreign Minister Ri Su Yong, is thinking more long-term on this.”

And Christopher Green of the Daily NK suggested that this was an effort by the North Korean government to not only avoid sanctions, but assert its control over the domestic financial industry by cracking down on money launderers.

“The state wants to bring into its remit all those rogue financial elements that occasionally tend to fall outside the remit of the ruling coalition,” he said. “The state is in a constant battle to stay as top dog in the financial sector in a country where so much is illegal for historical and political reasons – and illegality is always exploited eventually.”

And Daniel Pinkston of the International Crisis Group suggested that the North may have its eye on its northern neighbor with this move.

“I think it will be helpful – from the DPRK perspective – if Pyongyang ever needs to plead their case with Beijing to avoid financial sanctions that include Chinese banks since they are critical for the DPRK’s international financial linkages,” Pinkston said.

Kim Chon Gyun told the Choson Sinbo that the nation’s penal code has already been revised to reflect international standards when punishing money laundering.

UPDATE 4 (2015-2-3): Yonhap reports on the recent Chosun Sinbo article:

North Korea has created a national committee on efforts to fight money laundering and terrorist financing, a senior Pyongyang official confirmed Tuesday.

The communist nation’s move came after it joined the Asia/Pacific Group on Money Laundering (APG), the Asia-Pacific arm of the Financial Action Task Force (FATF) under the Organization for Economic Cooperation and Development (OECD), last year.

“The National Coordinating Committee is an organ to guide projects to prevent money laundering and financing of terrorism,” Kim Chon-gyun, head of North Korea’s central bank said in an interview with the Chosun Sinbo. The newspaper is published by the pro-Pyongyang General Association of Korean Residents in Japan, or Chongryon.

The panel, chaired by a deputy premier of the Cabinet, involves officials from the central bank, the foreign ministry, the finance ministry, and law-enforcement authorities, he added.

The North has already revised its penal code to take punitive measures against related violations in accordance with international norms, said Kim.

In January, Pyongyang said that it sent a letter to the FATF, based in Paris, pledging the sincere implementation of an action plan to meet global anti-money laundering standards.

UPDATE 3 (2015-2-3): The Chosun Sinbo has posted an article on anti-money laundering measures in the DPRK. Here is a rough translation:

[Interview] Kim Chon-kyun, the President of the Central Bank of the DPRK, Cooperation with International Organizations for Prevention from Money Laundering and Terrorist Financing.

“Establishment of the National System for Preventing from Illegal Acts”

By Kim Ji-young, reporter from Pyongyang

Kim Chon-kyun, the President of the Central Bank of the DPRK presented, at the interview with the Choson Sinbo, the opposite stance of North Korean government against money laundering and terrorist financing as follows.

“What cannot be allowed according to institutional characteristics”

– A letter from the president of the Central Bank of the DPRK that pledged to implement plans for action for prevention from money laundering and terrorist financing was submitted to Financial Action Task Force (FATF) on Jan 1st. How has the negotiation between North Korea and FATF proceeded?

The implementing recommendations of the plans for action we pledged this time were consented at the negotiation between North Korea and Asia/Pacific Group on Money Laundering in Cambodia on September 2014.

When looking into the recommendations, it included maintaining cooperative relations such as sharing data and proceeding cooperation with organizations, joining as a member state, devising a means to sanction and to punish on money laundering and terrorist financing, reinforcing the confirmation procedure of traders, establishing financing watching and information business system including reporting surreptitious trade, joining in international agreement, assessing loca, etc. These measurements are, in a word, that we should establish national system to punish severely illegal acts like internal/external money laundering and terrorist financing.

North Korea institutionally does not allow those illegal acts.

Long before such “international standard” appeared, North Korea already set legal, organizational measurement adequate for our society to prevent from money laundering –like acts. This is specifically described on our laws and those regulations have renewed according to the need for development in reality.

It is interesting that the head of the central bank is the point man for this operation because the DPRK’s central bank does not have the authority to hold foreign currency accounts–only accounts denominated in DPRK won. It seems to me that international money laundering should also be of concert to the Foreign Trade Bank, a sanctioned entity that is responsible for managing hard currency deposits in the DPRK.

UPDATE 2 (2015-1-24): According to the Pyongyang Times:

DPRK commits itself to anti-money laundering action plan

The Governor of the DPRK Central Bank on January 15 sent a letter to the Financial Action Task Force on Anti-Money Laundering, assuring it that the country would implement the Action Plan of International Standard for Anti-Money Laundering and Combating the Financing of Terrorism, a spokesman for the DPRK National Coordinating Committee on Anti-Money Laundering and Combating the Financing of Terrorism told KCNA on January 16.

He described this as a manifestation of the DPRK government’s political will based on its consistent stand to step up international cooperation in this field.

Recommendations of the action plan are legislative and organizational measures to criminalize and punish money laundering and financing of terrorism, and almost all of them have long been implemented in the DPRK to suit its actual conditions, according to the spokesman.

The DPRK will sincerely implement the action plan as it has pledged itself for the promotion of mutual understanding with member nations in the face of the obstructive moves of the US and some other countries that are reluctant to cooperate with the international organization, he stated.

He requested the organization to positively respond to the DPRK’s cooperative efforts as it assured in negotiations with the country.

UPDATE 1 (2014-10-24): FATF issues a public statement from Paris that includes the following:

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/FT) risks emanating from the jurisdictions.

Iran
Democratic People’s Republic of Korea (DPRK)

Democratic People’s Republic of Korea (DPRK)

Since June 2014, the DPRK has further engaged directly with the FATF and APG to discuss its AML/CFT deficiencies. The FATF urges the DPRK to continue its cooperation with the FATF and to provide a high-level political commitment to the action plan developed with the FATF.

The FATF remains concerned by the DPRK’s failure to address the significant deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime and the serious threat this poses to the integrity of the international financial system. The FATF urges the DPRK to immediately and meaningfully address its AML/CFT deficiencies.

The FATF reaffirms its 25 February 2011 call on its members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with the DPRK, including DPRK companies and financial institutions. In addition to enhanced scrutiny, the FATF further calls on its members and urges all jurisdictions to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism (ML/FT) risks emanating from the DPRK. Jurisdictions should also protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices, and take into account ML/FT risks when considering requests by DPRK financial institutions to open branches and subsidiaries in their jurisdiction.

Here is the web page for FATF. You can learn more about FATF here.

ORIGINAL POST (2014-7-19): North Korea joins OECD anti-money laundering group. According to the JoongAng Daily:

North Korea has joined the Asia Pacific Group on Money Laundering (APG), whose purpose is to prevent funding of terrorism and development of nuclear weapons.

Members of the APG unanimously decided to accept North Korea and Tuvalu as observers during its general meeting held in Macau yesterday.

APG is the Asia Pacific unit of the Financial Action Task Force under the Organization for Economic Cooperation and Development (OECD).

The Financial Action Task Force (FATF) has 41 member countries including the U.S., South Korea, China and Japan and observers include countries such as Germany, France and the U.K., as well as 27 international organizations such as the Asia Development Bank and World Bank.

Since North Korea has been accepted as an observer, it has to follow several rules including the prevention of money laundering, funding of terrorist organizations or actions, sharing its knowledge and experience and following global regulations and laws.

The APG will decide later whether to elevate North Korea from observer status to a member country once it evaluates Pyongyang based on its annual reports to the organization and visits by the representatives of the group over the next three years.

South Korea and many other members are trying to figure out the motive behind the unexpected move by Pyongyang, because North Korea was previously opposed to joining the APG.

“[North Korea’s motive] is a mystery to us,” said a high ranking government official, who requested anonymity. “We suspect that North Korea, while looking for ways to ease the international financial restrictions imposed on them, decided to show their efforts in improving their global image [by joining the APG].

“But since the lists that they need to follow are long, we will probably have wait and see how sincere and determined they are with their decision.”

In other words, it could be a facade as a way for North Korea to ease the sanctions imposed on it, since the possibility that Pyongyang will give up its nuclear ambitions is low.

The action is particularly suspicious because up until last year’s APG meeting held in Shanghai, North Korea refused to join the organization because of the rule requiring members and observers to follow global standards. North Korea at the time argued that it would join the APG only after the agreement to follow UN resolutions was taken out.

The resolutions include prevention of money laundering, nuclear terrorism and development of nuclear weapons, which is the opposite of the North Korean government’s goal of securing both economic growth and nuclear weapons.

But now, North Korea has agreed to follow all regulations presented by APG.

The tide seemed to have turned as financial sanctions imposed by the international community and led by the U.S. have intensified.

Pyongyang suffered heavily last year after the U.S. and China closed the accounts of the Foreign Trade Bank of North Korea, which was known as the money laundering window for Pyongyang. The money laundered through the trade bank is suspected of being used in funding the regime’s control over the country.

In May, the state-run Bank of China said it had notified the Foreign Trade Bank of North Korea that it was closing all of its accounts and suspending all financial transactions. It did not specify the number of accounts in the bank.

The move came as a shock considering China and North Korea’s strong ties. China was previously the lifeline of North Korea, whose economy has been heavily dependent on its close ally.

Last year wasn’t the first time that North Korea’s accounts have been shut down. In 2005, the U.S. froze North Korea’s accounts at Macau’s Banco Delta Asia, which was a heavy blow to Pyongyang’s ability to secure foreign capital.

The recent change of heart seems to have been triggered by a report by the U.S. State Department in May designating North Korea as a country that is non-cooperative against terror, citing its decision not to join either the FATF or APG.

Although suspicious, the South Korean government isn’t disapproving of the move by the North, as there are positive aspects such as better transparency of Pyongyang’s finances if it conforms to the APG’s regulations.

And if Pyongyang doesn’t follow the rules and loses its license as an observer, the sanctions against North Korea will further tighten.

“North Korean representatives, after their acceptance was approved [in Macau], stressed that they will work on following the APG’s international standards and our [South Korean] government has emphasized the importance of following the resolutions set by the United Nations Security Council,” said a government official.

Read the full story here:
North Korea joins OECD anti-money laundering group
JoongAng Daily
Jung Won-yeop and Park Jin-seok
2014-7-19

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