Archive for the ‘International Governments’ Category

China rejects DPRK coal shipment (Again)

Saturday, April 4th, 2015

UPDATE 1 (2015-4-4): For the second time this year, the Chinese have rejected a shipment of North Korean coal. According to the Korea Herald (Yonhap):

China has returned a shipment of anthracite coal to North Korea because it failed to meet standards for mercury emissions, according to a local report on Saturday.

This appears to be the second rejection by China of the North Korean mineral this year.

The shipment arrived at the Longkou port of China’s northern coastal province of Shandong late last month, but was returned as its quality did not satisfy China’s environmental regulations, iQiru.com, a local Shandong Internet news site, reported, citing an unnamed Longkou port official.

The report did not elaborate further or include the volume of the rejected North Korean coal.

In September last year, China announced strict regulations against the sale and import of coal with high toxic pollutants, including mercury and sulfur, to improve the country’s air and water quality.

Anthracite coal accounted for 39.8 percent of North Korea’s total exports to China last year.

China’s imports of North Korean coal plunged 53.2 percent from a year earlier to 16.78 million tons in January this year, according to Chinese customs data.

ORIGINAL POST (2015-3-9): Back in October of 2014, Kevin Stahler was the first person to point out (as far as I am aware) that the DPRK’s coal exports to China were in decline. Quoting Kevin:

However, this year North Korea’s anthracite exports to China are on course for a hard landing. The total value of imported anthracite is down 23 percent in the first half of 2014 compared to a year earlier. That’s an annualized $340 million hit to North Korea’s balance of payments. But North Korea is not alone: China has seen a double-digit decline in both the value and volume of its total world coal imports from January – August 2014.

On March 4, 2015, Yonhap reported that China returned a shipment of coal to the DPRK for reasons related to domestic environmental protection regulations:

China has rejected imports of some North Korean anthracite coal because the coal failed to meet domestic standards for mercury emissions, a local newspaper reported Wednesday, in what appeared to be China’s first rejection of North Korean minerals over environmental concerns.

The shipment was returned to North Korea on Feb. 27 from the Rizhao port of China’s northern coastal province of Shandong, the National Business Daily newspaper reported, citing an unnamed port official.

The report did not elaborate further, or include the volume of the rejected North Korean coal.

After three decades of rapid industrialization, China regularly sees hazardous air pollution with levels of particulate matter rising to nearly 40 times the limits set by the World Health Organization during the winter months.

In September, China announced strict regulations against the sale and import of coal with high toxic pollutants, including mercury and sulfur, to improve the country’s air and water quality.

Anthracite coal accounted for 39.8 percent of North Korea’s total exports to China last year.

In January, China’s imports of North Korean coal plunged 53.2 percent from a year earlier to 16.78 million tons, according to Chinese customs data.

On March 9, UPI reported on one of the key aspects of China’s new environmental policies and how it will affect the DPRK:

China’s crackdown on coal-related pollution will take a heavy toll on the North Korean economy, South Korean newspaper Donga Ilbo reported Monday.

China’s plan is to drastically reduce coal consumption by 160 million tons in the next five years. The plan, presented at the National People’s Congress in Beijing, aims to reduce the fossil energy use that is contributing to severe pollution in big cities, The Australian reported.

Countries exporting coal to China are all affected, but the plan could create an economic crisis in impoverished North Korea. Coal and iron-ore exports are two of North Korea’s biggest exports to China, its biggest trading partner.

According to the Donga Ilbo, more than 97 percent of North Korean exports are shipped to China*, and coal, iron ore comprise 60 percent of all North Korean exports.

China’s anti-pollution policy is affecting North Korean cargo. A North Korean ship delivering coal to China was turned away at the coastal city of Rizhao on Feb. 27. The Donga Ilbo reported the coal did not satisfy China’s environmental regulations.

The rising ban and other factors are placing the impoverished North Korean economy in a tight squeeze.

Anna Fifield also covered this story for the Washington Post and Guardian.

*The article reports that China accounts for 97% of the DPRK’s international trade. This is only true if one excludes South Korean trade–which South Korea does because they consider North-South trade as “inter-korean” trade.

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DPRK expels German and American aid workers

Thursday, April 2nd, 2015

UPDATE 1 (2015-4-8): Less than a week since expelling a German aid worker, the DPRK announces it deporting and American. According to the Wall Street Journal:

North Korea said Wednesday it has deported an American aid worker for “plot-breeding and propaganda” against the isolated state.

A report from Pyongyang’s state media named the aid worker as Sandra Suh. It said Ms. Suh has been a frequent visitor to the country since 1998 for humanitarian work but engaged in anti-North Korean “propaganda abroad with photos and videos … she secretly produced and directed.”

The Korean Central News Agency report said Ms. Suh has been deported.

A spokeswoman for the U.S. Embassy in Seoul said she couldn’t immediately comment on the report. Attempts to locate Ms. Suh weren’t immediately successful.

Foreign aid workers’ access to North Korea is extremely limited and the presence of U.S. citizens is rare. The regime has in the past shown reluctance to let foreign aid agencies work inside the state and has occasionally denied visa renewals when its economic performance made some gains.

The Los Angeles Times follows up (2015-4-8):

Suh is the founder of the Los Angeles-based humanitarian organization Wheat Mission Ministries.

Her daughter-in-law told the Los Angeles Times in a brief phone call that her family was thankful that it appeared Suh would be released, but declined to give details on Suh’s visits to North Korea out of concern about jeopardizing her return.

Eun-sook Suh said Sandra Suh was originally from the Pyongyang area and fled south during the Korean War. She initially returned to North Korea with the hope of finding long-lost family members.

“We’re just thankful that God seems to be helping her return,” she said.

Wheat Mission Ministries did not immediately return a request seeking comment, but its website states it was founded by Sandra Suh in 1989 “in response to the needs of the children and families of North Korea” and was formally established as a 501(c)(3) nonprofit organization in 2005. Suh, however, is not listed as a current staff member.

The Korean Central News Agency did not say when Suh was detained, nor was it clear whether she had already been deported. The agency said Suh had engaged in anti-North Korean “propaganda abroad with photos and videos” that she “secretly produced and directed, out of inveterate repugnancy” toward the secretive nation.

According to the group’s website, Wheat Mission sends medicine, medical equipment, food, building materials, clothes, shoes and blankets to North Korea. The organization is also involved in teaching North Korean healthcare professionals and building schools and orphanages. It says it is inspired “to share the love and humility of Christ.”

North Korea has detained and then released a number of Westerners in recent years who were missionaries or devout Christians, including Korean American missionary Kenneth Bae and Jeffrey Fowle, an Ohio man who traveled to North Korea on a tourist visa and intentionally left a Bible in a hotel room.

The country director of a German aid group, Welthungerhilfe, or World Hunger Aid, was recently expelled. The group said Pyongyang had asked the worker, Regina Feindt, to leave the country in February without saying why. Welthungerhilfe has worked in North Korea since 1997, spending tens of millions of dollars on projects to improve food, sanitation and water supply.

ORIGINAL POST (2015-4-2): James Pearson writes in Reuters (also printed in the Guardian):

North Korea has expelled the country director of one of the few foreign aid groups to operate in its territory.

Welthungerhilfe, whose name translates as World Hunger Aid, is one of Germany’s largest non-governmental aid organisations and has been working in North Korea since 1997, spending more than €60m on projects designed to improve food, sanitation and water supply.

It said North Korea had asked its country director Regina Feindt to leave the country in late February, without warning or saying why.

Feindt’s colleague Karl Fall, who had worked in the country for 12 years, left of his own volition the next month.

“Welthungerhilfe does not see anything in Mrs Feindt’s behaviour that would have justified an expulsion,” the aid group said.

It said Feindt left North Korea on 26 February and Fall left on 19 March. Feindt and Fall were not available to comment, Welthungerhilfe said.

The abrupt departures came as a surprise to members of the small foreign community in Pyongyang, according to a regular visitor to the North Korean capital who wished to remain anonymous, citing the sensitive nature of working there.

Welthungerhilfe would not comment on the events leading up to Feindt’s deportation. “We don’t know why this has happened,” said spokeswoman Simone Pott.

The NGO still has a skeleton presence in North Korea. It said its activities to improve water and sewage systems in cities were unaffected.

“At the moment we are in discussions with the North Korean authorities to secure a basis for continuing our development work in the country for the benefit of the people of North Korea,” the group said.

Read the full story here:
North Korea expels country director of German aid group
Guardian
2015-10-2

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Japanese police raid home of Chongryun chairman

Thursday, March 26th, 2015

According to the Japan Times:

The head of the pro-Pyongyang General Association of Korean Residents in Japan, or Chongryon, had his home searched by police on Thursday, and two South Korean men were arrested on suspicion of illegally importing matsutake mushrooms from North Korea.

Raids took place at six locations, including the Tokyo home of Ho Jong Man, chairman of Chongryon, a body which has functioned as a de facto North Korean embassy for many decades in the absence of diplomatic ties between Tokyo and Pyongyang.

Observers said the raid on the chairman’s home could affect stalled bilateral talks on Pyongyang’s abductions of Japanese nationals in the 1970s and 1980s.

Police arrested Lee Tong-chol, 61, president of a Tokyo-based trading house, and Yoshihiko Kin, 42, an employee of the company. They are suspected of illegally importing about 1,200 kg of matsutake mushrooms worth around ¥3 million via China in September 2010.

The mushrooms are believed to have been sold in Japan, mislabeled as Chinese-grown produce.

Japan has banned imports from North Korea since October 2006 as part of economic sanctions imposed in response to Pyongyang’s missile and nuclear programs.

Both suspects are residents of Japan, and both denied the allegation. Investigators quoted Lee as saying he does not understand why he should be arrested, while Kin denied all knowledge of the matter.

Police are investigating the relationship between the suspects and Ho, who is a member of North Korea’s top legislature.

After the early morning raid on his home in Tokyo’s Suginami Ward, Ho told reporters angrily he does not even know the name of the trading company.

“The investigation is done unlawfully and this would lead to serious problems in the relationship” between North Korea and Japan, he said.

“This is political suppression against the General Association of Korean Residents in Japan,” he said.

Touching on the ongoing investigation into the fate of Japanese citizens abducted by North Korea, Ho said the Japanese authority is making things worse, interfering with the investigation by deliberately worsening relations with North Korea.

Meanwhile, a senior police investigator said authorities suspect a link between the illegal trade and Chongryon, and that they will do everything they can to investigate.

To that end, police have so far searched more than 10 locations, including the trading house and the homes of Lee and of Ho’s son last May.

The locations searched Thursday include the Tokyo home of the pro-Pyongyang group’s vice chairman.

Read the full story here:
Police search home of Chongryon leader over suspected North Korea mushroom shipment
Japan Times
2015-3-26

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Gravity-fed tap water system established in DPRK

Sunday, March 22nd, 2015

According to KCNA:

Gravity-fed Tap Water System Established in DPRK

Pyongyang, March 22 (KCNA) — Today marks World Water Day.

In this regard, Ri Nam Hyon, section chief of the DPRK Ministry of Urban Management, noted that the government has striven to supply quality drinking water to citizens on a normal basis.

He told KCNA:

The DPRK government has made big efforts to the introduction of gravity-fed water supply system.

This introduction began in the township of Pukchong County, South Hamgyong Province, in 2003 while a brisk work was launched to explore the headstreams throughout the country.

At present, the gravity-fed water supply system has been established in 35 cities and counties, including Rason and Wonsan, across the country.

The establishment of this system was carried out in cooperation with the United Nations Children’s Fund and other international bodies and governmental and non-governmental agencies of various countries.

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DPRK-Russia look to boost business ties

Sunday, March 22nd, 2015

According to Voice of America:

A Russian official said Moscow and Pyongyang have agreed to discuss the creation of advanced development zones in Russia’s Far East and North Korea.

The latest project to be discussed between Russia and North Korea would call for a trilateral project, with South Korea’s participation, said Alexander Galushka, Russia’s minister for the development of the Russian Far East.

In an email sent to the VOA Korean news service, Galushka said Moscow and Pyongyang agreed to “discuss the creation of advanced development zones in the Russian Far East and on the territory of the DPRK with the participation of the Russian Federation, the DPRK and South Korea.”

Economic delegation

The agreement was reached during a visit by a North Korean economic delegation to Moscow in late February. The North Korean delegation was led by Ri Ryong Nam, Pyongyang’s Minister for Foreign Economic Affairs.

Ri and Galushka co-chair a commission tasked with promoting economic ties between Moscow and Pyongyang.

The move is an example of a series of ambitious economic projects recently launched by Moscow and Pyongyang in their efforts to enhance economic ties.

In November, the two sides expanded the Khasan-Rajin project, a project connecting the railways of Russia’s border town and the North Korean port, by conducting a test shipment of Russian coal from Russia to the South Korean port city of Pohang through the Rajin.

In October, the two countries launched a rare joint project that calls for Russia to overhaul North Korea’s railway system in return for access to the North’s mineral resources. The project involves reconstruction of more than 3,000 kilometers of railroads over 20 years.

Galushka said the railway project would pave the way for a significant increase in bilateral trade between Russia and North Korea.

Some analysts are skeptical that the project can be sufficiently financed. So far, Moscow is known to have attracted one domestic investor for the project.

Read the full story here:
Russia, North Korea Boost Economic Ties
Voice of America
Yonho Kim
2015-3-22

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DPRK-Russia trade in 2014

Wednesday, March 18th, 2015

UPDATE 1 (2015-3-18): Although overall trade volume between the DPRK and Russia was down in 2014, North Korea’s exports to Russia were up. According to Yonhap:

North Korea’s exports to Russia soared nearly 32 percent in 2014 from a year earlier, a report showed Wednesday, amid Pyongyang’s efforts to bolster ties with Moscow.

According to the report by the Korea Trade Investment Promotion Agency, North Korea’s outbound shipments to Russia reached US$10.17 million in 2014, up 31.9 percent from a year earlier.

By item, textile exports came to $4.7 million, or 46.2 percent of the total, followed by machinery with $1.6 million, musical instruments with $1.37 million and electrical equipment with $670,000.

Pyongyang also sold $250,000 worth of cars to Russia last year, 2.3 times more than the previous year, with shipments of optical devices soaring more than 60 times to $190,000.

Bilateral trade volume, however, fell 11.4 percent on-year to $92.34 million last year as Pyongyang’s imports from Russia shrank 14.9 percent to $82.17 million.

Crude imports dropped 7.9 percent on-year to $33.98 million last year, taking up the largest 41.7 percent share of the total imports.

“North Korea has been striving to strengthen economic cooperation with Moscow, though it will take time for the North to diversify its trade markets due to its heavy dependence on China in the past,” said Cho Bong-hyun, a senior research fellow at the state-run Industrial Bank of Korea (IBK) in Seoul.

Last year, more than 90 percent of its exports were bound for China. Bilateral trade between North Korea and China, however, fell 2.4 percent from 2013 to $6.39 billion in 2014, marking the first annual decline since 2009, according to Seoul data.

The 2014 figure is seen as signaling that the strained political ties between the two nations, particularly after the North’s third nuclear test in February 2013, have affected their economic relations.

Amid such languid ties with Beijing, North Korea has been ramping up efforts to forge a closer relationship with Russia, with the two nations declaring 2015 as a year of friendship.

ORIGINAL POST (2014-12-4): According to Yonhap, trade between North Korea and Russia (imports and exports)dropped significantly in the first three quarters of 2014:

Trade between North Korea and Russia dropped significantly this year, despite Pyongyang’s efforts to step up economic cooperation with Moscow, data showed Thursday.

Russia’s exports to North Korea reached US$59.01 million in the first nine months of this year, down 10.1 percent from the same period last year, according to the data by the Vladivostok office of the state-run Korea Trade-Investment Promotion Agency (KOTRA).

In particular, Russia’s exports of flour to North Korea plunged 72.2 percent on-year to $770,000.

Russia’s imports from its neighbor also fell 7.9 percent on-year to $6.46 million during the January-September period.

North Korea’s imports of electronics and coal from Russia also tumbled 61 percent and 44.6 percent, respectively, according to the data.

Russia’s imports of North Korean nuclear reactors, boilers and other machinery, meanwhile, shrank 57.1 percent on-year to reach $451,000,

Bucking the overall decline, Russia’s imports of North Korea-made clothes soared 35.5 percent on-year to $3.61 million, maintaining an uptrend of recent years.

North Korea has been intensifying efforts to expand economic cooperation with Russia, recently deciding to use the Russian ruble as a trade currency as well as launching a fledgling logistics project to link Russia’s border city of Khasan to the North’s port of Rajin.

Read the full story here:
N. Korea-Russia trade shrinks this year
Yonhap
2014-12-4

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DPRK blamed for cyber attack on South Korean nuclear power plant

Tuesday, March 17th, 2015

UPDATE 1 (2015-3-26): The DPRK has denied the hacking allegation. According to Yonhap:

North Korea again denied its involvement in a series of data leaks at South Korea’s nuclear power operator and rebutted Seoul’s interim probe results that accused the communist regime of conducting the hacking attacks.

The North’s Central Internet Research Institute said that the investigation that linked Internet protocol addresses used in the attack to North Korea is groundless and was fabricated by Seoul, according to Pyongyang’s state media Korean Central News Agency.

The denial follows a March 17 announcement by a special investigation team that found the data leaks at the Korea Hydro and Nuclear Power Co. “believed to have been caused by an (unidentified) group of North Koreans hackers.”

In December, an unidentified hacker, claiming to be an activist against nuclear power, had posted data about nuclear power plants, including their blueprints, five times and threatened to destroy the facilities while demanding they be shut down.

Earlier this month, the hacker renewed its threats by posting more files on Twitter that included documents concerning the country’s indigenous advanced power reactor 1400, while demanding money in exchange for not handing over sensitive information to third countries.

The state-run KHNP operates 23 nuclear reactors in South Korea that provide nearly one-third of the country’s energy demand.

ORIGINAL POST (2015-3-17): According to the Wall Street Journal:

South Korea on Tuesday blamed North Korea for a December cyberattack on nuclear power-plant operator Korea Hydro & Nuclear Power Co., marking the first online incursion publicly attributed to Pyongyang since the hacking of Sony Pictures Entertainment.

South Korean investigators said state-owned Korea Hydro, which operates the country’s 23 nuclear reactors, and its business partners were targeted in multiple cyberattacks aimed at stealing internal data that included plant blueprints and employees’ personal information.

South Korea’s nuclear-plant management wasn’t compromised in the attacks and no critical data was disclosed, the investigators said. A series of “spear-phishing” emails aimed at stealing passwords and obtaining remote control access of computers were largely unsuccessful, they added.

A Korea Hydro spokeswoman declined to comment, saying the firm wasn’t participating in the investigation.

A Twitter account holder in December posted Internet links to Korea Hydro’s internal-data archives and issued various demands to prevent further leaks, the investigators said.

Investigators said they traced the intrusions back to Internet addresses registered by North Korea. The spear-phishing virus that investigators said was used in the attack, named “kimsuky,” was previously identified by cybersecurity experts as created in North Korea. The related tweets were posted through servers in Shenyang, in China’s northeast, and Vladivostok, Russia, they said.

Pyongyang’s state newspaper in late December denied involvement in the cyberattacks, calling such accusations a ploy to escalate inter-Korean tension.

Tuesday’s statement was the first time South Korea had publicly attributed the cyberattacks to North Korea.

Here is coverage in Yonhap.

Read the full stories here:
North Korea Blamed for Nuclear-Power Plant Hack
Wall Street Journal
Jeyup S. Kwaak
2015-3-17

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South Korea to help develop fish farms in DPRK

Tuesday, March 17th, 2015

According to Yonhap:

South Korea, together with the U.N. Food and Agriculture Organization (FAO), plans to help develop fish farms in North Korea as an aid to the impoverished state, the government said on March 17.

According to the Ministry of Oceans and Fisheries, the Korea Maritime Institute will soon sign an agreement with the FAO to launch a joint study on the fish-raising industry in the North.

The two parties will study climate conditions in North Korea and find the best species for farming, and based on the outcome of the study, South Korea and the FAO will raise a 30 billion won (US$26.5 million) fund to help build new fish farms in the North, the ministry said.

The aid, however, will likely be delivered by the FAO as Pyongyang continues to be at odds with Seoul over its nuclear program.

Inter-Korean dialogue has nearly come to a halt after the North’s third nuclear test in early 2013. The communist state continues to blast daily threats and slander against the South’s Park Geun-hye government.

South Korea’s National Red Cross had offered to send 25 tons of powdered milk for the malnourished children of North Korea last month, but Pyongyang quickly rejected the offer.

North Korea is believed to have suffered a chronic shortage of food since the late 1990s. The country continues to depend heavily on international handouts to feed a large portion of its population of 24 million, accepting nearly $20 million worth of international aid in the first half of 2014 alone.

You can read the whole story here:
S. Korea to help develop fish farms in N. Korea
Yonhap
2015-3-17

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DPRK and FATF (UPDATED)

Monday, March 16th, 2015

UPDATE 6 (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 5 (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 4 (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 3 (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 2 (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 1 (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.

ORIGINAL POST (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.

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And just how much are overseas North Koreans earning?

Monday, March 16th, 2015

Anna Fifield, in this interesting Washington Post story, actually gets a current data point:

Kim is part of the economic lifeline that is keeping North Korea afloat. He manages a factory in a small town outside Dandong, China’s commercial gateway to North Korea, where North Korean women work making clothes for a Chinese company. The women are allowed to keep one-third of the $300 a month they earn, while the rest goes back to Kim Jong Un’s regime in Pyongyang.

In a second article, she provides a little more information:

In the clothing factory, the women work 13 hours a day, 28 or 29 days a month, and are paid $300 each a month — one-third of which they keep. The rest goes back to the government in Pyongyang.

“Even though I want to pay them more, I have to send a certain amount home to my country, so this is all I can give them,” Kim said in his office at the factory. On his desk, an open laptop revealed that visitors had interrupted his game of solitaire.

North Korea is thought to have at least 50,000 workers outside the country earning money for the regime, and 13,000 of them work in Dandong.

Assuming that there are 50,000 workers earning $200 each / month for Pyongyang (a low-ball figure in my opinion), this would imply a cash transfer of $120 million per year. Not a lot of money on a national scale, but remember this is a lower-bound estimate.

At the same time in Geneva, special rapporteur Marzuki Darusman said he was launching an inquiry into the “bonded labourers” working for the DPRK. Read more about this in The Guardian.

The full articles are worth reading here:
“Talking kimchi and capitalism with a North Korean businessman”
Washington Post
Anna Fifield
2014-3-16

North Korea’s growing economy — and America’s misconceptions about it
Washington Post
Anna Fifield
2014-3-13

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