North Korean Economy Watch

According to Yonhap:

The Unification Ministry signed an agreement Wednesday with a leading association of lawyers here to support North Korean defectors having difficulties while adapting to the capitalist South Korean society.

Minister Hyun In-taek signed the deal with President Kim Pyung-woo of the Korean Bar Association, calling on lawyers to teach the defectors about South Korea’s legal system at resettlement centers.

The agreement also provides consultation with lawyers for free or at reduced fees if the former residents of the communist North are involved in a legal dispute or need to file a lawsuit.

More than 19,000 North Koreans have defected to the South since the three-year Korean War ended in a truce in 1953. A bulk of them have come in recent years as the North’s food crisis deepens.

A 2007 survey showed that North Korean defectors were dozens of times more susceptible to fraud due mainly to their lack of understanding of the market system here.

Read the full story here:
Gov’t joins hands with lawyers to support N. Korean defectors
Yonhap
7/21/2010

UPDATE 2: More details are coming out about the US led initiative to track down DPRK-owned accounts in foreign banks.

According to the Choson Ilbo:

North Korean leader Kim Jong-il is believed to have a US$4 billion slush fund stashed away in secret accounts in Switzerland, Luxembourg and Liechtenstein.

According to sources, North Korean bank accounts in Russia are being tracked after the U.S. government obtained information that the Russian mafia is laundering money for the North. Kim Jong-il and other officials cannot engage in financial transactions using their real names, so they are believed to operate secret bank accounts or rely on the Russian mob.

Philip Goldberg, the former U.S. State Department envoy charged with enforcing UN sanctions, visited Russia in August last year and reportedly asked Deputy Foreign Minister Alexei Borodavkin to crack down on the mob for its involvement in laundering money for North Korea.

North Korean accounts held in African banks are being tracked, because the reclusive regime has been earning a substantial amount of money in the region by smuggling ivory and selling weapons. “Despite the UN sanctions, North Korea has opened up new markets in Africa and Latin America,” said one North Korean source.

The U.S. sanctions against North Korea are expected to differ from pressure applied to Macao-based Banco Delta Asia back in 2005. “Rather than freezing the operations of an entire financial institution like BDA by getting the U.S. Treasury Department to blacklist it on suspicion of money laundering, the measures this time will probably involve the tracking of individual North Korean accounts directly linked to illicit activities and freezing them,” a diplomatic source said.

Sanctioning entire banks could prompt North Korea to complain that its legal financial transactions are also being blocked and this could make the lives of ordinary North Koreans even more difficult. This is probably why U.S. Secretary of State Hillary Clinton said these measures “are not directed at the people of North Korea,” but at the “destabilizing, illicit and provocative policies pursued by that government.”

Others say the latest sanctions could be more comprehensive than previous ones by automatically limiting U.S. transactions with all banks found to deal in a certain amount of money with North Korea, rather than singling out particular banks. Under such pressure, banks could voluntarily sever relations with North Korean businesses or individuals to avoid being blacklisted.

The South Korean government has apparently notified the U.S. of between 10 to 20 North Korean bank accounts under suspicion of being involved in illicit deals. There are fears that massive Chinese aid to the North could render the U.S. sanctions useless, but judging from the vehement protests lodged by North Korea when its accounts at BDA were frozen, experts say financial sanctions are an effective means of pressure.

And according to a different Choson Ilbo story:

The U.S. will freeze North Korean leader Kim Jong-il’s overseas secret bank accounts based on a tip-off from a whistleblower at a state-run bank in Liechtenstein in 2006-2007.

The August issue of the Monthly Chosun said since the North’s attack on the South Korean Navy corvette Cheonan in March, speculation has been rife among North Korea experts in Washington that the Obama administration will freeze Kim Jong-il’s secret accounts in Liechtenstein and Switzerland.

The tip-off from Heinrich Kieber, a former employee of LGT Bank, which is owned by the Liechtenstein royal family, contributed decisively to the U.S. obtaining information about Kim’s secret accounts. According to the U.S. Senate, Kieber said the “head of department in a socialist government” wanted to deposit more than US$5 million “with no explanation in the files whatever in regard to the source of the vast amount.”

The U.S. recently signed a tax information exchange agreement with Liechtenstein which could allow it to freeze bank accounts suspected of belonging to Kim.

The US also plans to distribute a lack list of North Korean firms to distribute internationally.  According to Asahi:

The United States plans to release a blacklist of North Korean companies and individuals believed to be involved in transactions of weapons of mass destruction and luxury items as part of new sanctions on Pyongyang in the wake of the sinking of the South Korean corvette Cheonan.

An official with the South Korean government divulged the plan on Friday. Seoul has been contacted by Washington about the blacklist.

The official said financial institutions would be under pressure to freeze or close accounts held by the companies and individuals on the blacklist.

The new measure is designed to avoid the problems that arose in September 2005 when the U.S. Treasury Department designated Banco Delta Asia of Macao as a financial institution suspected of laundering money for North Korea.

That designation caused a run on the bank and the Macao government was forced to place it under its control.

Under the new blacklist proposal, the United States hopes to provide financial institutions around the world with the names of individuals and companies with close ties to North Korea.

A South Korean government official said, “If a foreign government or financial institution does not cooperate with the new sanctions, there is the possibility that it could lose trust so the blacklist would apply silent pressure to conform.”

One problem is that many North Korean-related accounts are held in China and it remains unclear what, if any, cooperation will be obtained from Beijing and Chinese financial institutions.

One report from China does indicate that this strategy will make business with North Korea more difficult.  According to the Korea Herald:

Chinese banks ― mostly bigger institutions with international operations ― will not be able to avoid the sanctions that the U.S. is pursuing against North Korea, an official here said Monday.

“The bigger banks cannot avoid the sanctions because all of its transactions go through the U.S.,” he said.

He stressed that even smaller institutions ― such as Banco Delta Asia in the past ― could come under scrutiny because all wiring services go through New York.

“This means that for everyone dealing with North Korea, it will become difficult for them to send and receive money from the North,” the official said on the condition of anonymity.

The U.S. has already called for a dozen banks around the world including those in China to freeze the North Korean assets in their accounts, according to diplomatic sources in Washington. The accounts are suspected of being used for illicit activities by the North, such as purchasing weapons, luxury goods and trading in counterfeit.

UPDATE 1:  The US has already begun going after DPRK bank accounts.  According to the Donga Ilbo:

The U.S. government will reportedly freeze some 100 illegal bank accounts allegedly linked to North Korea, a diplomatic source said Thursday.

Washington is known to have discovered about 200 bank accounts worldwide linked to Pyongyang in the process of mulling financial sanctions separate from those of the U.N. since the March 26 sinking of the South Korean naval vessel Cheonan.

“The U.S. is closely tracking 100 of the suspected accounts that are highly likely to be illegal,” the source said.

If Washington takes action against the accounts, including suspension of transactions, its sanctions are expected to be stronger than the September 2005 freeze of 25 million U.S. dollars in the North’s accounts at the Macau-based Banco Delta Asia.

“As U.N. Security Council resolutions 1718 and 1874 ban financial transactions that could be used for weapons of mass destruction or missile programs, bank accounts under borrowed names related to such transactions can be seen as illegal,” the source said.

“Investigations by the CIA and the Treasury Department will reveal how many of the 100 accounts are directly linked to illegal transactions.”

The source said the level of sanctions sought will likely be 100 times stronger than the measures taken against Banco Delta Asia.

Even if Washington imposes sanctions on illegal accounts, however, it will likely ask each bank to close them rather than disclosing them on its official gazette, the source said.

“Disclosing the names of the banks where the accounts were opened will likely cause a strong protest from the banks because of possible damage to the banks` reputations and transactions,” the source said. “The U.S. government has continued to consult the banks and will likely induce them to quietly close the accounts.”

A detailed outline of the U.S. financial sanctions is expected to be released by Robert J. Einhorn, new U.S. coordinator for sanctions on North Korea and Iran, when he visits Seoul early next month.

And according to the Joong Ang Daily:

The United States has already begun quietly freezing assets in North Korean accounts at about 10 banks around the world, diplomatic sources familiar with the situation told the JoongAng Ilbo yesterday.

On Tuesday in Seoul, U.S. Secretary of State Hillary Clinton said the U.S. would levy additional sanctions on North Korea for the March sinking of the Cheonan.

“The U.S. Treasury Department and intelligence authorities began looking into about 200 bank accounts that showed suspicious activities involving North Korea,” an informed diplomatic source said. “Bank accounts used to deposit money earned from the North’s exports of arms, in violation of UN Security Council resolutions 1718 and 1874, were studied, along with accounts used to purchase luxury goods believed to be supplied to the North’s leadership.”

Of the 200 suspicious accounts, U.S. authorities narrowed their attention to about 100 and began freezing their assets, the source said. The accounts belong to about 10 banks in Southeast Asia, southern Europe and the Middle East, the sources said. All the accounts were opened and operated under aliases, the source said.

Resolution 1718 was adopted on Oct. 14, 2006, after the North’s nuclear test that month. The main sanctions were an arms embargo, inspection of cargo going in and out of the North, an export ban on luxury goods to the North and the freezing of assets of individuals and entities designated by the UN sanctions committee. Resolution 1874 was adopted in June 2009 after the second nuclear test in May 2009, and it reinforced the existing sanctions.

While the U.S. was public about freezing North Korean accounts at the Macao-based Banco Delta Asia in 2005, the latest freezings were done quietly, the source said.

“When the U.S. authorities informed the banks that there were problems associated with certain accounts, the banks quietly froze the assets, making it hard for the media to detect,” the source said. “The assets in those accounts are likely to be money Kim Jong-il needs to operate his regime, so this will deal a serious blow to the North.”

“The U.S. began the freezings before June,” the source said. “The moves should be interpreted as a part of new sanctions on the North to hold it responsible for the sinking of the Cheonan.”

The assets in those accounts were presumably raised through illicit trade of arms, counterfeiting money, money laundering and drug trafficking, the source said. “In the past, the North deposited money in African bank accounts created under aliases and raised through trafficking in elephant ivory, selling of counterfeit Viagra and exporting arms in Africa,” the source said.

The source said the new financial sanctions will be different from what happened in the Banco Delta Asia crisis that stalled the six-party nuclear talks for years due to the North’s protest. Instead of naming and shaming a specific bank as a money laundering institution and pressuring it to freeze North Korean assets, “quiet” moves are now preferred to avoid blowback from Pyongyang, the source said.

Another source confirmed the additional financial sanctions, noting that, “If the charges are very clear, then the Banco Delta Asia method will be used, while the silent method will be used in more ambiguous cases.”

Meanwhile, a senior U.S. official said a package of sanctions aimed at stopping Pyongyang’s illegal activities will be announced in the next couple of weeks. In a press briefing in Washington on Wednesday, Assistant Secretary of State Philip J. Crowley elaborated on the fresh sanctions announced by Clinton in Seoul.

“Much of what we’ve done up to this point has centered on proliferation activities that stem from specific authorities,” Crowley said. “We’re moving into strengthening our national steps to attack the illicit activities that help to fund the weapons programs that are of specific concern to us – things like the importation of luxury goods into North Korea, concerns that we have long had about trafficking in conventional arms. So there are authorities that we will strengthen nationally, and we’ll have more to say about that in the next couple of weeks.”

North Korea’s counterfeiting of banknotes and cigarettes, diplomats’ smuggling of cigarettes, banking transactions that fund weapons programs and support the government and its policies were named as some of the illegal activities to be tackled under the sanctions.

Crowley also said Robert Einhorn, special adviser for nonproliferation arms control, will soon begin a trip to encourage countries that have been reluctant to implement earlier sanctions, noting that the North has found ways to sidestep the measures.

“They look to see if there are seams and gaps in the international effort,” Crowley said. “That’s what Bob Einhorn is going to be consulting with a range of countries where we think there needs to be more aggressive implementation of Security Council resolutions 1718 and 1874.”

Crowley, however, refused to say what Einhorn’s destinations are and if they include China.

“China obviously has a big role to play in this,” Crowley only said.

ORIGINAL POST: Sec. of State Hillary Clinton has announced the US will impose tighter financial sanctions on the DPRK.  According to Al Jazeera:

The United States will impose new sanctions on North Korea in a bid to stem its nuclear weapons ambitions, Hillary Clinton, the US secretary of state, said.

Clinton said the measures were designed to stamp out illegal money-making ventures used to fund the nuclear programme.

“These measures are not directed at the people of North Korea, who have suffered too long due to the misguided priorities of their government,” Clinton said after talks with defence and military officials in South Korea on Wednesday.

“They are directed at the destabilising, illicit, and provocative policies pursued by that government,” she said.

She said the sanctions would be aimed at the sale or procurement of arms and related goods as well as the procurement of luxury items.

The US will freeze assets as well as prevent some businesses and individuals from travelling abroad, and collaborate with banks to stop illegal financial transactions, Clinton said.

Also the US Department of the Treasury (h/t Josh) has announced new procedures that apply to U.S. financial institutions maintaining correspondent accounts for “foreign banks operating under a banking license issued by” North Korea.  According to FinCEN:

The Democratic People’s Republic of Korea (DPRK) has not committed to the AML/CFT international standards, nor has it responded to the FATF’s numerous requests for engagement on these issues. DPRK’s lack of a comprehensive AML/CFT regime poses a risk to the international financial system. DPRK should work with the FATF to develop a viable AML/CFT regime in line with international standards.

…

B. Jurisdictions in FATF Statement Section 2 have been identified by the FATF as having strategic AML/CFT deficiencies and not having committed to an action plan developed with the FATF to address key deficiencies. Based on the FATF’s adoption of the ICRG’s findings, a decision by the FATF in which the United States concurs, FinCEN is advising U.S. financial institutions of their increased obligations under Section 312 of the USA PATRIOT ACT, 31 USC § 5318(i). Accordingly, U.S. financial institutions should apply enhanced due diligence, as described under implementing regulations 31 CFR § 103.176(b) and (c) when maintaining correspondent accounts for foreign banks operating under a banking license issued by DPRK and São Tomé and Príncipe.

Read the full statement here.

Also, the US Department of State has added the DPRK’s Korea Mining Development Trading Corporation (KOMID) to its list of sanctioned companies.   According to the Chosn Ilbo:

The U.S. State Department on Tuesday put another North Korean company on a list of sanctions targets based on the Iran, North Korea, and Syria Nonproliferation Act.

The Korea Mining Development Trading Corporation was added to the list due to suspected dealings in weapons of mass destruction or ballistic missiles in violation of the Missile Technology Control Regime since 2006.

The company had already been designated by the U.S. Treasury Department as a target of financial sanctions. The blacklisting came as part of wider U.S. sanctions against the Stalinist country that largely cover well-trodden ground.

KOMID will not be permitted to conclude supply contracts with any U.S. government agencies or to take part in any U.S. government support programs. The newest round of sanctions will be effective for two years from the moment they take effect.

According to the Associated Press:

Trapped by two Chinese divisions, troops of the 8th U.S. Cavalry Regiment were left to die in far northern Korea, abandoned by the U.S. command in a Korean War episode viewed as one of the most troubling in American military history.

Sixty years later those fallen soldiers, the lost battalion of Unsan, are stranded anew.

North Korea is offering fresh clues to their remains. American teams are ready to re-enter the north to dig for them. But for five years the U.S. government has refused to work with North Korea to recover the men of Unsan and others among more than 8,000 U.S. missing in action from the 1950-53 war.

Now, under pressure from MIA family groups, the Obama administration is said to be moving slowly to reverse the Bush administration’s suspension of the joint recovery program, a step taken in 2005 as the North Korean nuclear crisis dragged on.

“If I had a direct line in to the president, I would say, `Please reinstitute this program. There are families that need closure,'” said Ruth Davis, 61, of Palestine, Texas, whose uncle, Sgt. 1st Class Benny Don Rogers, has been listed as MIA since Chinese attackers overran his company — I Company, 8th Cavalry — at Unsan in late 1950.

It was one of Rogers’ I Company comrades, Pfc. Philip W. Ackley of Hillsboro, New Hampshire, whose identifying dog tag appeared in a photo the North Koreans handed over at Korea’s Panmunjom truce village in January of this 60th year since the war started. The North Koreans also delivered photos of remains, a stark reminder that Unsan’s dead still wait to come home.

The U.S. “has developed the humanitarian issue into a political problem,” complained a North Korean statement urging resumption of the MIA search project, which earned hard currency for the Pyongyang government.

The devastating losses at Unsan, in early November 1950, came as China intervened to fend off a final North Korean defeat. In a last letter home, dated Oct. 30, Rogers told his parents, “It is a lot better over here, but it’s not over yet.”

The U.S. command had ignored intelligence reports that China’s army was moving south, and Rogers and the 8th Cavalry had been sent too far north, just 80 kilometers (50 miles) from China, where they stumbled into a closing enemy vise.

Higher headquarters rejected requests for a pullback, then refused to send artillery forward to support a rescue effort. Finally, it ordered the rescue force withdrawn.

Two of the 8th Cavalry’s three battalions managed to escape, with heavy losses. But only small bands from the five companies of the doomed 3rd Battalion made it out as waves of Chinese infantry attacked their 200-meter-wide (200-yard-wide) defense perimeter.

The 8th Cavalry’s abandonment at Unsan became an infamous chapter in Army annals — “one of the most shameful and little-known incidents in U.S. military history,” wrote Korean War historian Jack J. Gifford.

Some 600 of the 3rd Battalion’s 800 men were lost, about half believed killed and half captured, many of whom died in Chinese-run prison camps.

The U.S. and North Korea established the MIA search in 1996 after lengthy negotiations. Over nine years, working across North Korea, the joint teams recovered 229 sets of remains believed to be those of Americans, including 14 subsequently identified as 3rd Battalion men.

But an estimated 260 U.S. dead are still unaccounted for at Unsan, among almost 4,600 U.S. MIAs in North Korea, the Pentagon’s Defense POW/MIA Office says.

When then-Defense Secretary Donald H. Rumsfeld suspended the program in 2005, officials cited what they said were concerns about the security of American personnel working on the territory of a longtime U.S. adversary.

Richard Lawless, the former Pentagon official who recommended the move, defends it today, telling The Associated Press it was a “prudent decision” because the U.S. field teams “were potential high-value hostages as the North Korean nuclear crisis deepened.”

The MIA support groups rejected that rationale, saying they suspected President George W. Bush’s administration instead wanted to break the lone working link with North Korea and pressure Pyongyang in the nuclear showdown.

“This safety aspect from the Pentagon sounds like so much hogwash,” said former 3rd Battalion sergeant Robert J. Earl, 82, of Federal Way, Washington. Earl was not at Unsan, having been wounded earlier, and for years he has sought information on his 8th Cavalry mortar platoon, all of whom may have perished.

Stepping up their lobbying in Washington last year, the MIA families appear to have made headway with the new administration.

“I’m in touch with everyone there, and they all support restoring the program,” said Frank Metersky, 77, a Marine veteran of the war and longtime MIA campaigner.

Larry Greer, spokesman for the Defense POW/MIA Office, said officials are “evaluating” a possible resumption. Other administration officials have pointedly referred to the recovery program as a humanitarian mission unrelated to political considerations. But the recent furor over North Korea’s alleged torpedoing of a South Korean warship “has stopped everything in its tracks for now,” Metersky said.

Nevertheless, U.S. specialists sound ready.

“We are prepared to resume operations in (North Korea) and will request access to the Unsan area,” the Joint POW/MIA Accounting Command in Hawaii, home to the field teams, said in its latest annual report.

Its forensic experts, meanwhile, continue the laborious work of DNA identification of remains returned years ago, like those of Master Sgt. Roy Earl Head of the 7th Infantry Division, finally identified, brought home and buried June 5 in a family cemetery in Grit Hill, Virginia.

“It’s remarkable, after 59 years,” said brother David Head, 71, of Kingsport, Tennessee.

All his life he thought daily about Roy, he said. His mind turned sympathetically to others.

“There are still a lot more families out there who might not ever find out, or get the closure we will get,” Head said.

I know where Unsan is, but if there is anyone who can tell me specifically where US soldiers are believed to be buried, I would like to tag these locations on Google Earth.

Read the full story here:
Lost Korean War battalion awaits US MIA decision
Associated Press
Charles Hanley
7/19/2010

UPDATE (Oct, 3, 2010): The Los Angeles Times has also picked up this story:

Plaintiffs’ attorney Nitsana Darshan-Leitner was in her Jerusalem office in July when she got news of the Puerto Rican court’s verdict.

A judge there had just issued a $378-million civil judgment for her clients: the families of 17 Puerto Rican missionaries killed by Japanese Red Army militants at an Israeli airport in 1972.

Yet her euphoria was tempered by pragmatic reality: She would have to try to collect the judgment from a defiant North Korea, which the judge ruled had decades ago given training and support to the assailants.

Over the years, Darshan-Leitner has collected more than $72 million in judgments against Iran and the Palestinian Authority. But cash-strapped, isolationist North Korea had already ignored her legal motions and none of its officials showed up for even a day in court.

Legal judgments against Kim Jong Il and his Democratic People’s Republic of Korea in several civil cases have added up to more than $500 million. But not a dime has been collected.

The regime in “Pyongyang is secretive and they’re poor,” said Darshan-Leitner, director of the Israel Law Center, which pursues lawsuits against nations accused of sponsoring terrorism. “Since they don’t export many things, you have to look hard for the money.”

North Korea has for years been an elusive legal target. In 1988, it was added to Washington’s list of nations that sponsor terrorism. But U.S. law at the time precluded suits against foreign countries.

That changed in 1996 when Congress amended the Foreign Sovereign Immunities Act, allowing plaintiffs to pursue in court governments identified as state sponsors of terrorism. In 2008, then-President George W. Bush removed North Korea from the list after it agreed to allow international inspection of its nuclear facilities, closing the door on further lawsuits against Pyongyang.

But in the 12-year window of opportunity, some attorneys were successful in suing North Korea. In 2008, Washington-based attorney Richard Streeter won a $65.8-million judgment in a District of Columbia federal court on behalf of several crewmen of the U.S. Navy intelligence ship Pueblo, who had been held captive for 11 months by Pyongyang in 1968.

Silent for decades, the plaintiffs contacted Streeter in 2006 after his success in helping to collect on a judgment against Iran for a case involving the murder of a U.S. Navy diver by hijackers in 1985.

On Oct. 10, 2008, the day before North Korea was removed from the terrorism list, Darshan-Leitner filed suit against the regime on behalf of the family of Kim Dong Shik. The Chicago minister was kidnapped by North Korean agents in 2000 while on a trip to China and presumably died in a North Korean prison camp. The case is still pending.

Armed with her judgment in the Puerto Rico case, Darshan-Leitner is on the hunt for North Korean money and property worldwide and is looking into reports of $32 million in regime assets frozen by the U.S. government.

For his part, Streeter has filed motions against banks nationwide to disclose the names and balances on frozen accounts and has petitioned the U.S. government in court for more leads. He’s also preparing to take the search outside the country.

Plaintiffs’ attorneys are reluctant to give specifics of their search for fear of alerting target nations. In a case against Iran, Darshan-Leitner found banks in Germany and Italy where assets were being held, but by the time she filed motions, Tehran had withdrawn them, she said.

“We have some leads, but we can’t say in what countries — bank accounts that belong to the North Korean government and the Central Bank of North Korea,” she said. “When we confirm the money is there, we will approach lawyers in those countries to go to court and try to collect.”

In another case against the Iranian government, Darshan-Leitner filed motions in a Texas court to collect on funds from the sale of a seized Lubbock home once owned by the shah of Iran. She is also attempting to seize Persian antiquities kept at the University of Chicago as a way to collect on a judgment against the current government of Iran, she said.

In their collection efforts, lawyers often run up against the U.S. government.

“The U.S. State Department doesn’t like these cases,” said David Strachman, a Rhode Island attorney who has collected on judgments against foreign countries. “They take the position that private litigation by victims interferes with their closely held prerogative of international relations. In many cases, they come in as the 1,000-pound gorilla to try and stop us.”

The State Department declined to comment, but an official familiar with such cases says the agency has no written policy on citizens trying to collect judgments against foreign countries.

Still, one expert called such pursuits “a new and evolving area” that have prompted State Department interference.

“They don’t want to set a precedent,” said Jeffrey Addicott, director of the Center for Terrorism Law at St. Mary’s University’s School of Law in San Antonio. “Their argument is that if we seize assets of another nation to distribute to victims, what’s to stop them from fabricating cases to seize U.S. assets abroad?”

Darshan-Leitner hopes that Kim Jong Il’s regime might one day follow the lead of Libyan leader Moammar Kadafi, who, after years of resistance settled hundreds of millions of dollars worth of judgments over his nation’s involvement in the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland.

“Nobody pays attention unless these nations are held accountable,” said Han Kim, the son of the Chicago minister abducted by North Korea.

Meanwhile, plaintiffs’ lawyers continue their hunt for North Korean assets.

“I don’t know whether we’ll ever be successful. That’s the sad part,” said Streeter. He said he charged each of four plaintiffs a $5,000 retainer but will receive no more until a judgment is collected.

“But I want to see some of that money that Kim Jong Il is using to buy his yachts and his Courvoisier as payment to my clients,” he said. “I’ll take it in Courvoisier. I don’t care.”

Read the full story here:
Plaintiffs’ attorneys hunt for North Korea’s money
Los Angeles Times
John M. Glionna
10/3/2010

UPDATE (July 18, 2010): Being a lawyer, Joshua does a great job finding and posting posting legal documents related to the DPRK at One Free Korea.  Most recently he posted a civil ruling which finds the DPRK liable for an airport attack in Israel. According to Joshua:

North Korea was held liable for its role in supporting the Popular Front for the Liberation of Palestine and the Japanese Red Army, which planned the attack together in North Korea. North Korea did not contest the suit. The award consisted of $78 million in compensatory damages awarded to the estates and surviving relatives of the victims, and $300 million in punitive damages.

You can read the ruling here (PDF).

Joshua has posted information from other civil litigation cases here.

The Washington Times did a story.

ORIGINAL POST (Dec 2, 2009): According to the WorldTribune.com:

Families of victims have filed suit against North Korea on charges of supporting a major attack by the Japanese Red Army in Israel.

The group, Shurat HaDin, has filed a suit in a U.S. district court in San Juan, Puerto Rico for the families of the victims of the 1972 attack.

During the assault on Lod Airport, 26 people were killed and 80 others were injured by attackers alleged to have been trained by North Korea. The attack was attributed to the Japanese Red Army and the Popular Front for the Liberation of Palestine.

“This will be the first time North Korea is being held to account in a U.S. court for its support of terrorism over many decades,” Shurat HaDin said on Dec. 1.

According to Shurat HaDin‘s web page:

The case arises from a lawsuit brought by the families of victims of the 1972 terror attack at the Lod Airport in Israel in which 26 people were killed and 80 injured. The complaint alleges that the government of North Korea trained and financed the terrorists who perpetrated the heinous massacre.

The families are represented by Shurat HaDin director Nitsana Darshan-Leitner, the Osen Law group, attorney Robert Tolchin of New York and attorney Manuel San Juan of Puerto Rico.

In May 1972, terrorists from the Japanese Red Army (JRA), working in league with the Popular Front for the Liberation of Palestine (PFLP), placed automatic weapons, ammunition, and grenades in their check-in luggage on a flight from Italy to Israel. When their bags emerged in Tel-Aviv at the arrivals hall, they took out the weapons and opened fire in every direction mowing down passengers, flight crew members and airport workers. They also attempted to blow up airplanes on the ground using hand grenades. Two of the three attackers were killed, and a third, Kozo Akumoto, was captured, tried, and sentenced to prison in Israel.

Most of the victims were Catholic pilgrims from Puerto Rico who had come to visit the Holy Land for the first time.

North Korea was behind the attack. As the trial will show incontrovertibly, in the months leading up to the massacre the leaders of the JRA and PFLP met each other and with North Korean officials, who provided funding, intelligence, training, and other material support for the terrorists. The attack was part of the JRA’s declared strategy of taking their anti-Western violence and plans of communist revoultion to other parts of the world, beginning with Israel—a strategy approved by the North Korean government.

This will be the first time North Korea is being held to account in a U.S. court for its support of terrorism over many decades. It is widely known that one of the world’s most oppressive regimes is also a consistent support of terrorism, including providing weaponry, training bases, and funding for Palestinian terrorist organizations. They were also responsible for building an enormous underground bunker system for Hezbollah that dramatically increased the terrorist group’s fighting capacity in the 2006 Lebanon War.  For this reason, the U.S. State Department put North Korea on its official list of states that sponsor terror in 1988—a fact that makes it possible for American victims to sue the North Korean government and collect against their assets in a U.S. court. Although North Korea was removed from the list late in 2008 for political reasons, the current lawsuit was filed on behalf of the Puerto Rican families before the deadline for filing lawsuits, as were two other lawsuits Shurat HaDin currently has pending against North Korea.

The trial will begin on December 3 in the U.S. Federal Court in San Juan, Puerto Rico.

A copy of the complaint can be found here.

By Michael Rank

China has launched a fleet of patrol boats to combat drug trafficking on the North Korean border, a Chinese website reports.

The report shows pictures of the four boats, which are being deployed on a stretch of the Yalu river known as Badaojiang八道江, but gives few details.

The only drug named in the report is opium, which North Korea is reported to produce in large quantities. It says officers warn local people not to become engaged in drug smuggling by showing them pictures of opium and other banned substances.

“The creation of the anti-drugs speedboat force is not just a foundation in the people’s war against drugs, it also increases our strength in banning drugs on the river border and will be a force for us in building a harmonious border and in contributing to a drugs-free border,” an official from the new force is quoted as saying.

A separate Chinese newspaper report names a methamphetamine (known as magu 麻古) as another of the main drugs smuggled between North Korea and China, and says a haul of 13,775 magu pills, seized in winter 2004, was the largest amount of drugs ever confiscated by Dandong border guards. It says smuggling reached a peak in the years 2000-2006 and gives little information about the current situation, probably because this is politically too sensitive.

But it does mention the killing of three Chinese smugglers by North Korean border guards in June, and says the dead men were members of a gang led by a man known as Sun Laoer who controls much of the smuggling on one particular stretch of the Yalu. One man was injured in the incident, for which China demanded an apology. North Korea said it was “an accident”, while according to a Chinese television report the North Koreans suspected the smugglers of being South Korean spies.

The Chinese newspaper report says the main goods smuggled between China and North Korea are drugs, scrap metal, cigarettes, DVDs, chemicals and secondhand cars.

The most notorious gang was led by an individual called Jiang Weijia, who specialised in smuggling cigarettes and oil products from North Korea into China. Between June and December 1999 Jiang smuggled 45.8 million yuan worth of cigarettes. The gang was finally smashed in 2003.

The article in Southern Weekend, one of China’s more adventurous newspapers, also mentions human trafficking across the border. It says that “in 1996 you could exchange 50 jin [25 kg] of rice for a Korean daughter-in-law” and adds that the women had to pretend to be deaf and dumb since if they opened their mouths and were found to be from North Korea they would be sent straight back.

It notes that “world opinion suspects that North Korean government departments are covertly involved in smuggling on the Chinese-North Korean border, the reason being that in a country where power is highly concentrated, it would otherwise be almost impossible for large-scale smuggling to take place on the Yalu river border. But despite such suspicions, there is no complete proof.”

The report recalls how in the 1990s North Koreans, in the wake of the famine, would exchange scrap copper for rice at a rate of one kg of metal for one kg of rice and that many North Korean factories were stripped bare of all their metal fittings.

It also recalls how in the 1960s North Korea was richer than China, which suffered through years of Mao-induced famine, and people from Dandong would cross the Yalu at night in search of food.

“This shouldn’t be called smuggling, should it. People were bartering for food in order to survive,” it quotes one man as saying. It quotes another man as saying the border was largely unguarded until recently and when he was a boy (in the 1990s apparently) he would cross the frozen river in winter and North Korean guards would give him sweets.

The report says border trade with North Korea stopped during the Korean war, was revived in 1958 and faded during the Cultural Revolution of the late 1960s and 70s. It was officially revived in September 1981 with an agreement between China’s Liaoning province and North Korea’s Pyeong’an Bakdo. Most of the trade from the early 1980s consisted of China bartering oil for fish.

The article says China-Korean smuggling goes back centuries, and in the 1930s an area of Dandong near the river called Shahezi 沙河子 was a famous smuggling centre under the Japanese. It also says a Qing dynasty customs office has been restored in Jiuliancheng 九连城, some 20 km from Dandong, and the area remains a smuggling centre.

North Korea has been widely reported to be a significant producer of illicit drugs. The CIA World Factbook notes  that for years, from the 1970s into the 2000s, citizens of North Korea, many of them diplomats, were apprehended abroad while trafficking in narcotics and police investigations in Taiwan and Japan in recent years have linked North Korea to large illicit shipments of heroin and methamphetamine, including an attempt by the North Korean merchant ship Pong Su to deliver 150 kg of heroin to Australia in April 2003.

In 2004 the Jamestown Foundation published a report by a North Korean defector who says he “learned of and witnessed first-hand the drug trafficking activities of the North Korean regime” when he worked for the North Korean National Security Agency from 1983 until 1998.

According to the Associated Press:

The U.N. humanitarian chief has released $42 million to help people suffering from hunger, disease and conflict in nine countries from Congo and Yemen to North Korea and Nepal.

John Holmes said Friday the United Nations has received insufficient funds from donors to meet humanitarian needs in the nine countries.

The money, from an emergency fund to help the United Nations respond quickly to humanitarian emergencies, will be given to U.N. humanitarian agencies and the International Organization for Migration. Through them, funds will go to humanitarian and other nongovernmental organizations to cover funding gaps.

According to the U.N. Office for the Coordination of Humanitarian Affairs, humanitarian actors in Chad and Congo will receive $8 million apiece, agencies in Yemen will receive $7 million, the humanitarian team in North Korea will get $5 million, humanitarian agencies in the Central African Republic, Djibouti, Eritrea and the Republic of Congo will each receive $3 million, and the U.N. team in Nepal will get $2 million.

The General Assembly revamped the Central Emergency Response Fund in December 2005 after world leaders decided to make up to $500 million available so the U.N. could act speedily to help people caught in conflicts, natural disasters and other emergencies instead of waiting for donors to respond to appeals for aid.

Since then, more than 116 countries and dozens of private sector donors have contributed nearly $2 billion to the fund, OCHA said, and it has disbursed more than $1.7 billion to help millions of victims of natural disaster and conflict in more than 76 countries and territories.

OCHA said nearly $415 million has been pledged for the fund for 2010.

Read the full story here:
UN gives $42 million to underfunded humanitarian crises in nine countries
Associated Press
7/17/2010

An interesting story in the Los Angeles Times:

He looks more like a graying clergyman than the boogeyman of thousands of South Korean childhoods.

But Kim Shin-jo is both.

The 69-year-old may preside over a Protestant church in this picturesque community where the Han River bends among mountain peaks. But he is also the reluctant grandfather of North Korean spies, a reminder of a cloak-and-dagger world that refuses to be dispatched to the history books on this divided peninsula.

On a recent day, Kim read a news story about the sentencing of two North Korean military spies. Such stories stir bitter memories of the night in 1968 when Kim and 30 other heavily armed North Korean commandos slipped into Seoul  on a mission to assassinate then-President Park Chung-hee.

For the infiltrators, the operation ended in disaster. Cornered outside the presidential residence, they waged a deadly, days-long gun battle with South Korean police and military forces. Although nearly all of the North’s commandos were killed, Kim was captured. Interrogated for months about his spy career, he was eventually released and later became a South Korean citizen, marrying and having a family.

Years in a free society have exposed the fallacy of North Korea’s argument that the South is an agonized wasteland that must be recolonized. Still, Kim feels pity for these newest Northern moles.

“I know they must be punished — we have a rule of law here,” he says. “Still, I’m a human being. I feel sorry for them.”

As the recent U.S. arrest of nearly a dozen Russian agents illustrates, international espionage still exists decades after the Cold War — especially on the Korean peninsula, where North and South are still technically at war.

Without money for high-priced satellites, a cash-starved North Korea relies on a more practical resource.

“It’s hardly believable, but in this high-tech age, North Korea still relies heavily on humans as information gatherers,” said Lee Dong-bok, a former member of South Korean intelligence and a senior associate at the Center for Strategic and International Studies.

Kim, whose parents were executed when he pursued citizenship here, still faces derision over his sinister mission of long ago. He’s not a man of God, some say, but a would-be assassin. He remains haunted for surviving when others didn’t.

“Sometimes,” he says, “I think it would have been better if I had died that day.”

*

The operation code names were Cuckoo and Skylark.

At 27, Kim was chosen from among tens of thousands of North Korean agents to form the elite 124th Special Forces Unit. Their task: Cross the heavily mined DMZ and execute the South Korean president, taking pictures to verify the kill.

The 31 commandos were divided into six teams. As an army lieutenant, Kim led a squad whose role was to take out the bodyguards at the presidential mansion, known as the Blue House.

“I felt gratified to be part of the revolution to emancipate South Korea,” Kim recalls. “We thought the president there was a stooge, an American collaborator. I hated him.”

The unit set off at 8:30 p.m. on Jan. 17, 1968, dressed in South Korean army uniforms. Moving by darkness, hiding during the day, they snipped barbed wire and marched south through the mountains.

One night, they ran into a group of farmers gathering wood. Instead of killing them, they warned the villagers not to report them. The civilians immediately contacted authorities, who launched a manhunt for the infiltrators.

Still, Kim and his teams made it to within 200 yards of the Blue House before being stopped by a suspicious South Korean soldier who demanded their identification.

The commandos opened fire, setting off a series of deadly street battles. Eventually, 35 South Koreans were killed and 64 wounded — soldiers, policemen and civilians, including a 15-year-old boy, who was among the victims of a grenade thrown at a loaded bus.

Insisting that he made a point not to kill civilians, Kim says that he scattered from the rest and never fired his gun. Instead, he fled south into the woods, where he was captured within hours.

Two days later, Kim was trotted out in handcuffs on live television. Asked about his mission, the unrepentant prisoner gave an answer that still haunts many older South Koreans: “I came down to cut Park Chung-hee’s throat,” he declared.

But his revolutionary spirit would not last — thanks to a South Korean army general who headed Kim’s interrogation. Over months of patient reasoning, the officer broke through Kim’s defenses. The two eventually became close.

“He told me, ‘We have a problem with the North Korean regime, not you,’ ” Kim recalls. “He was my father’s age and treated me as his son. He said, ‘I was a young soldier too once. As a commander, I will never kill you. But I will forgive you.’ ”

*

After four decades, the South Korean government recently opened a trail that leads south toward the capital from the North Korean border. It is the path the commandos took on their fatal mission. For years, the winding path has been known as the Kim Shin-jo Route, after a man whose name for many is as recognizable as any former president.

Officials called on Kim to act as a tour guide on the trail’s opening day. He could have refused, he says. But he realized that in order to come to terms with this painful national incident, South Koreans needed to see him in the role of the everyman, to see that he was no longer their boogeyman.

All day, people pointed at him. Those old enough often spoke with scorn. Kim, they swore, was the reason many South Koreans fled their homeland in the early 1970s, fearful of another war with the North. Because of Kim, many of the older generation who remained behind lived in perpetual fear.

“Wherever I go, I get the comments,” says Kim, who became a Protestant clergyman in 1997, finding solace in his faith. “It will happen as long as I am alive. People will point and accuse me.”

Every Jan. 21, Kim memorializes the day of the attack. The day once brought what Kim calls “indescribable pain.” But his wife has taught him to think differently.

“My family tells me that as of Jan. 21, 1968, I was dead,” he says. “On that day, I started a second life. I’m really 69, an old man. But they joke that I’m only 42. And that day that once caused me so much grief should be celebrated as my birthday.”

Read the full story here:
The face of South Korea’s boogeyman
Los Angeles Times
http://www.latimes.com/news/nationworld/world/la-fg-korea-spy-20100718,0,7204441.story?page=1
John M. Glionna
7/18/2010

UPDATE: UN World Health Organization has criticized the Amnesty report.  According to the Associated Press:

The World Health Organization found itself Friday in the strange position of defending North Korea’s health care system from an Amnesty International report, three months after WHO’s director described medicine in the totalitarian state as the envy of the developing world.

WHO spokesman Paul Garwood insisted he wasn’t criticizing Amnesty’s work, but the public relations flap illustrated an essential quandary for aid groups in unfree states: how to help innocent people without playing into the hands of their leaders.

Amnesty’s report on Thursday described North Korea’s health care system in shambles, with doctors sometimes performing amputations without anesthesia and working by candlelight in hospitals lacking essential medicine, heat and power. It also raised questions about whether coverage is universal as it — and WHO — claimed, noting most interviewees said they or a family member had given doctors cigarettes, alcohol or money to receive medical care. And those without any of these reported that they could get no health assistance at all.

Garwood said Thursday’s report by Amnesty was mainly anecdotal, with stories dating back to 2001, and not up to the U.N. agency’s scientific approach to evaluating health care.

“All the facts are from people who aren’t in the country,” Garwood told reporters in Geneva. “There’s no science in the research.”

The issue is sensitive for WHO because its director-general, Margaret Chan, praised the communist country after a visit in April and described its health care as the “envy” of most developing nations.

Major global relief agencies have been quietly fighting for years to save the lives of impoverished and malnourished North Koreans, even as the country’s go-it-alone government joined the exclusive club of nuclear weapons powers and wasted millions on confrontational military programs.

Some groups may fear being expelled from the country if they are openly critical of Pyongyang, which is highly sensitive to outside criticism. Still, Chan’s comments were uncommonly ebullient.

Garwood and WHO spokeswoman Fadela Chaib insisted that Amnesty’s report was complementary to their boss’ observations, and sought to downplay Chan’s praise for North Korea. Instead, they focused on the challenges she outlined for North Korea, from poor infrastructure and equipment to malnutrition and an inadequate supply of medicines.

But whereas Chan had noted that North Korea “has no lack of doctors and nurses,” Amnesty said some people had to walk two hours to get to a hospital for surgery. Chan cited the government’s “notable public health achievements,” while Amnesty said health care remained at a low level or was “progressively getting worse.”

Asked Friday what countries were envious of North Korea’s health, Chaib said she couldn’t name any. But she highlighted the importance of maintaining the health body’s presence in the country, where officials do their best to save lives despite “persisting challenges.”

“We are an organization dealing with member states, and we respect the sovereignty of all countries,” Chaib said. “We need to work there to improve the lives of people.”

Sam Zarifi, head of Amnesty’s Asia-Pacific program, said the human rights group stood by its findings.

“We certainly have a lot of restrictions in terms of working in North Korea, but we did our best in terms of capturing the information we could verify,” Zarifi said. “We don’t take the WHO’s statements as criticizing or rejecting Amnesty’s findings.”

He said Amnesty had spoken to North Koreans as well as to foreign health care and aid workers, and relied heavily on WHO for information — including the assessment that North Korea spends $1 per person per year on health care, the lowest level in the world.

The U.N. estimates that 8.7 million people need food in North Korea. The country has relied on foreign assistance to feed much of its population since the mid-1990s when its economy was hit by natural disasters and the loss of the regime’s Soviet benefactor.

North Korea, ruled by Kim Jong Il, is routinely described by U.N. and other reports as one of the world’s most repressive regimes.

Garwood said Amnesty’s research added a needed element to understanding health conditions in North Korea, but added that it didn’t even mention recent improvements in the country as the result of a program funded by South Korea and aided by WHO.

The U.N. body claims that maternal mortality has declined by over 20 percent since 2005, and diarrhea cases and deaths in operations have also dropped. It says more than 6,000 doctors and nurses have been trained in emergency obstetric care, newborn care and child illnesses, while clinics have received better material for operations, blood transplants and other medical interventions.

As for Chan’s April claim that “people in the country do not have to worry about a lack of financial resources to access care,” Garwood said hundreds of field missions have been conducted in North Korea.

“None have come back reporting the kinds of things in the Amnesty report in terms of payment for services,” he said.

“I’m not saying they’re not credible accounts,” he added. “But it’s not taking into account some of the things that are happening today.”

Zarifi, of Amnesty, said the whole debate would be ended if North Korea’s government provided access to monitors so that everyone had a better understanding of the country’s health care system.

“Every indication we have indicates the state of health care in North Korea is dire,” he said.

ORIGINAL POST: Here is the introduction to the report (which you can download here as a PDF):

In the early 1990s, the Democratic People’s Republic of Korea (DPRK or North Korea) faced a famine that killed up to one million people in a population that at the time hovered around 22 million (the current population stands at 23.9 million). Food shortages and a more general economic crisis have persisted to this day. The government has resolutely maintained that it is committed to, and capable of, providing for the basic needs of its people and satisfying their right to food and a proper standard of health. The testimonies presented in this report suggest otherwise. The people of North Korea suffer significant deprivation in their enjoyment of the right to adequate health care, in large part due to failed or counterproductive government policies. These poor policies include systematic failure to provide sufficient resources for basic health care (North Korea had one of the lowest levels of per capital funding for health care recorded by the World Health Organisation in 2006). After nearly two decades, food insecurity remains a critical concern for millions of North Koreans. This has been compounded by the government’s reluctance to seek international cooperation and assistance, which the government is obligated to do when it would otherwise be unable to ensure minimum essential levels of food for the whole population, and its restrictions on the delivery of humanitarian assistance. This delayed and inadequate response to the food crisis has significantly affected people’s health.

Additionally, a currency revaluation plan in November 2009 caused spiralling inflation that in turn aggravated food shortages and sparked social unrest. In the first few months after the plan went into effect, the North Korean government exacerbated the situation by restricting the use of foreign currency, closing down food markets, and prohibiting small-plot farming. Many people died of starvation and many others lost their entire savings.

Amnesty International has documented how widespread and chronic malnutrition, which suppresses people’s immune system, has triggered epidemics and mass outbreaks of illnesses related to poor diet. Interviews with North Koreans depict a country that professes to have a universal (free) health care system but in reality struggles to provide even the most basic service to the population. Health facilities are rundown and operate with frequent power cuts and no heat. Medical personnel often do not receive salaries, and many hospitals function without medicines and other essentials. As doctors have begun charging for their services, which is illegal under North Korea’s universal health care system, the poor cannot access full medical care, especially medicines and surgery.

The interviews conducted by Amnesty International indicate that the North Korean government has also failed its obligation to provide adequate public health information. As a result, most of the interviewees were unaware of the importance of seeking proper medical diagnoses or completing a course of medication. And, because many hospitals no longer supply free services or medicines (despite government commitments to the contrary), many people normally do not visit doctors even when they are ill.

In a 2004 report, Starved of Rights: Human rights and the food crisis in the Democratic People’s Republic of Korea (North Korea), Amnesty International documented actions of the North Korean government that aggravated the effects of the famine and the subsequent food crisis, including denying the existence of the problem for many years, and imposing ever tighter controls on the population to hide the true extent of the disaster from its own citizens. It also documented the government’s refusal to allow swift and equitable distribution of food and its imposition of restrictions on freedom of information and movement, which exacerbated the population’s ability to search for food.3 Although some progress has been made since 2004, access to food is still a critical issue in North Korea. As this report demonstrates, the inadequate and sometimes counter-productive actions of the North Korean government over the country’s food crisis have had a devastating impact on the health of the population.

Under international law and standards, North Korea is obligated to protect the rights of its population to the highest attainable standard of health. This means that, at the very least, the state must provide for adequate health care and the underlying determinants of health, including food and nutrition, housing, access to safe and potable water and adequate sanitation, safe and healthy working conditions, and a healthy environment. North Korea’s responsibilities under international and domestic law will be addressed in greater detail in section 5.

To improve the situation, Amnesty International presents the following key recommendations to the government of the Democratic People’s Republic of Korea with more detailed recommendations in the conclusion of this report.

Amnesty International calls on the North Korean government to:

1. as a matter of priority, ensure that food shortages are acknowledged and effective steps taken to address these shortages, including acceptance of needed international humanitarian assistance;

2. ensure the need-based and equitable distribution of health facilities, goods and services throughout the country;

3. co-operate with the World Food Programme and donors, allow unrestricted access to independent monitors, and ensure non-discrimination, transparency and openness in the distribution of food aid;

4.ensure that medical personnel are paid adequately and regularly so that they may carry out their duties properly;

5. undertake information and education campaigns to provide accurate and comprehensive information on prevalent infections and diseases; their causes, symptoms and treatment; and the importance of medical diagnosis and effective use of medicines.

Furthermore, Amnesty International recommends to the international community, and in particular, major donors and neighbouring countries such as China, Japan, Russian Federation, South Korea and US to:

1. ensure that the provision of humanitarian assistance in North Korea is based on need and is not subject to political conditions.

This report has received wide coverage in the media.  Here are the links:

Barbara Demick, Los Angeles Times

Choe Sang-hun, New York Times

Yonhap

BBC

According to the Joong Ang Ilbo:

North Korea is allowing Chinese fishermen into its territorial waters on the East Sea in exchange for cash, according to Seoul government officials.

The North Korean and Chinese governments recently agreed to allow squid boats from China to fish in North Korea’s waters, said a Seoul official who declined to be named.

About 250 Chinese boats are operating near Najin [Rajin/Rason] and Chongjin, two port cities in North Hamgyong Province, a northeast coastal area. It is the first time such a large number of Chinese crafts have been allowed to operate in North Korea’s seas, he said.

North Korea is collecting about 250,000 yuan ($36,913) for each boat for 2010, meaning the impoverished country is expected to earn about 62.5 million yuan in the deal.

“Many of the North’s fishing boats are extremely outdated and are experiencing intense fuel oil shortages, while squid prices in China have gone up due to supply shortages,” the official said. “So each side’s interests have been satisfied.”

North Korea has been hungry for more cash to finance state projects, including a so-called Pyongyang modernization project that involves paving major roads, upgrading railway networks and refurbishing urban streets.

“They are trying to secure more foreign currency through a commercial deal that is not subject to UN Security Council Resolution 1874,” said the official, referring to the UN economic sanctions adopted in June 2009 that involve trade restrictions, cargo inspections and other limits on financial transactions.

The Chinese fishing boats operating in the North’s sea mostly come from Dalian and Dandong, two ports in China’s northeastern coastal region.

“The fishing rights the Chinese boats have secured cover most of the North’s territorial waters on the East Sea,” said another Seoul official. The official expressed concern about possible overfishing by the Chinese, which may affect South Korean fishermen as well.

“Once squid start moving to the south, the Chinese fishing boats will travel farther south, possibly all the way down to Heungnam, Sinpo and Wonsan,” said another South Korean government official, referring to the North’s port cities in South Hamgyong Province.

Read the full article below:
North Korea leases out its squid beds to China
Joong Ang Ilbo
Chung Yong-soo
7/15/2010

According to Kyodo (via Japan Today):

Prosecutors indicted the president of a trading company in Kumamoto Prefecture on Tuesday on a charge of illegally exporting to China a power shovel that can be used in the development of weapons of mass destruction and which was later transported to North Korea, investigators said. Hiromitsu Tsutsumi, 63, of Yatsushiro, Kumamoto Prefecture, was arrested last month along with the 37-year-old head of another trading firm in Fukuoka City, but prosecutors have decided not to indict the latter due to insufficient evidence.

Tsutsumi is suspected of exporting to China a used power shovel in April last year under the name of the trading firm in Fukuoka by submitting to customs a false declaration and without obtaining permission from the economy, trade and industry minister, according to the indictment. The Fukuoka prefectural police said they have confirmed that the power shovel has since been transported to North Korea from China’s Dalian.

Tsutsumi has also exported three other power shovels to Hong Kong in February last year and has told investigators that he received orders from North Korea and was given about 10 million yen in advance payment, and that the power shovel he exported in April 2009 was a reward for the ordering party, according to the police. Power shovels are designated as items subject to the export control regulation as they could be diverted for military use, such as for launch pads for ballistic missiles.

Just last week another Japanese firm was busted for illegally exporting luxury goods to the DPRK.

Read the full story here:
Kumamoto trading firm head indicted over illegal exports to China
Kyodo (Japan Today)
7/14/2010