Archive for the ‘Insurance’ Category

Insurance products promoted to target foreign investment enterprises

Tuesday, January 26th, 2016

Institute for Far Eastern Studies (IFES)

North Korea is promoting insurance products targeted at foreign-investment companies with increasing efforts to attract foreign capital through special economic zones.

On January 19, 2016, the state-run Korea National Insurance Corporation (KNIC) made an official announcement on its website on new insurance products for the economic development zones. It announced that KNIC is promoting various insurance products to protect life and property for foreign investment companies, including fire insurance and accident liability insurance for gas accidents, third party automobile liability insurance, and third party construction liability insurance.

In addition, KNIC announced that it will offer a variety of insurance products according to personal and business demands. The website elaborated, “in order to meet the growing insurance need in the economic development zones, KNIC is introducing development of various insurance products and to realize the international insurance trends and the diversification of the insurance sector to ensure the prompt insurance coverage to remain as credible institution among foreign companies.”

The KNIC first began to operate fire, automobile, gas accident liability insurances to tenant companies in the Kaesong Industrial Complex from 2005.

Meanwhile, North Korea’s Presidium of the Supreme People’s Assembly (SPA) adopted the insurance regulation along with property regulation for the Economic Development Zone (EDZ) last July. The insurance regulation consisted of four chapters and 52 articles, but specific details were not disclosed. However, details on insurance contracts, insurance offices, as well as installation and operation of the insurance office were revealed.

Previously, North Korea enacted new EDZ laws in May 29, 2013 which guaranteed special privileges for economic activities conducted in special economic zones as specified in the law. On November 6, 2013, three EDZ Operational Regulations were adopted (management institutional regulations, establishment regulations, and business establishment and operational regulations) by the Presidium of the SPA.

This new property insurance policies and regulations appear as a new measure to ensure added legal protection to improve investment environment of foreign capital from the three existing operating regulations.

In February 2015, Ri Sun Hak, department director of the Ministry of External Economic Relations, stated in an interview with the KCNA, “Our country is fully equipped with the legal environment to protect the legitimate rights and interests of investors.” The news also depicted ‘foreign investment law,’ ‘economic development law,’ and ‘external economic arbitration law’ were newly enacted or revised. The foreign investment laws was revised to streamline investment formalities and to provide various services for foreign-investment companies.

However, the question still remains as to gauge the effectiveness of North Korea’s insurance operations. As the international community, including the UN Security Council, is likely to impose stronger sanctions to condemn North Korea’s fourth nuclear test, the solvency of North Korea’s insurance companies remains uncertain and unreliable.

In addition, the KNIC’s Germany branch and President So Tong Myong (Seo Dong-Myung) are both on the EU’s list of sanctions, which is likely to act as an impeding factor for smooth insurance operations. The EU listed six KNIC senior employees to the sanctions list subject to an EU-wide asset freeze and travel ban.

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DPRK insurance market updates

Monday, August 17th, 2015

UPDATE 2 (2015-10-23): The Institute for Far Eastern Studies (IFES) reports on additional developments in the DPRK’s insurance industry:

North Korean Insurance Company to Expand Insurance Offerings

On October 14, 2015, the state-owned North Korean insurance company, Korean National Insurance Corporation (KNIC), promoted its ongoing insurance programs at the Kaesong Industrial Complex, revealing that it will offer more types of insurance if North-South economic cooperation expands in the future.

As North Korea’s market economy has expanded under the Kim Jong Un regime, insurance aimed at the ‘protection of assets’ has also increased.

“In order to actively ensure joint economic development projects between the North and South using the economic space of insurance, in 2005 we started insuring the assets of businessmen from the South who come to the Kaesong Industrial Region,” KNIC announced on its homepage on October 14.

The company explained, “The types of insurance currently implemented are fire insurance, car insurance, and gas accident liability insurance […] In the future several insurance sectors will grow further commensurate with the increasing variety and expansion of North-South economic cooperation projects.”

The company emphasized that in the future it will offer insurance programs more practical for South Korean businesses at the Kaesong Industrial Complex.

KNIC has also recently introduced new insurance products covering things like cell phones and fruit orchards.

However, Kaesong companies have reportedly not been enthusiastic about the products offered by KNIC. Not only is it difficult to trust the ability of North Korean insurance companies to pay out insurance money in the case of an insurance claim, but the insurance money itself is small. As a result, South Korean companies at Kaesong have been reluctant to enroll.

Meanwhile, KNIC revealed that it is strengthening its fire insurance services in accordance with North Korea’s recent construction of a number of new buildings such as the Masikryong Ski Resort, the Mirim Horse Riding Club, and the Pyongyang Sunan International Airport terminal.

“As we work to realize fire insurance guarantees of newly built or remodeled buildings in a timely manner, we are ensuring that insured companies are equipped with fire alarms and fire extinguishing facilities and experience improvements in risk management,” the insurance company declared.

It added, “We are also bringing in internationally recognized appraisal companies along with domestic appraisers to make sure that risk assessments of new insurance subjects proceed normally on-site.”

UPDATE 1 (2015-8-20): The Institute for Far Eastern Studies (IFES) reports on developments in the DPRK’s insurance market:

New Insurance Products Appearing in North Korea

All sorts of insurance products, such as cell phone insurance and insurance against damage to fruit farms, are starting to appear in North Korea.

The Korea National Insurance Corporation (the state insurance company representing North Korea), revealed on its website on August 12, 2015 that the issue of cell phone insurance was discussed at the annual general meeting of provincial governors held in Pyongyang in February 2015.

“At last year’s meeting, provincial governors from all over, including Pyongyang, North Hamgyong Province, Yanggang Province, and Jagang Province, met and introduced new areas of business such as cell phone insurance. They discussed increasing the number of insurance policy holders and expanding coverage to raise insurance premium revenue,” the insurance company reported.

Recently, as the number of cell phone owners shoots up, the instances of lost or damaged phones have also risen. It appears that this new form of insurance is being offered against this backdrop to compensate cell phone owners for such incidents. As in South Korea, it is not yet mandatory for North Korean cell phone owners to purchase cell phone insurance.

Currently, North Korea’s primary mobile carrier, the Egyptian firm Orascom, owns a 75% share in North Korea’s mobile communications company Koryo Link. As of the end of June 2014, the company had 2.4 million cell phone subscribers in North Korea.

The Korea National Insurance Corporation is also preparing to offer insurance for fruit trees in order to compensate owners of fruit farms for damage caused by natural disasters or other events.

The company explained the background behind offering this insurance product on their homepage. According to the website, since Kim Jong Un came to power, a lot of effort has been put into the development of agriculture and fruit farms, but due to recent abnormal climate phenomena like El Niño, these fields have experienced a lot of difficulties.

The website reveals, “Based on experience accumulated in the testing phase, we plan on offering insurance coverage within several years for modern, large-scale fruit farms like Taedong River Integrated Fruit Farm and Kangwon Province’s Kosan Fruit Farm.”

In order to do this, the company has been performing risk appraisals since 2013 with international damage appraisers for each of the fruit farms. This suggests that it is keeping foreign reinsurance companies and contracts in mind.

The company offers fruit farms insurance coverage for a variety of calamities and natural disasters. It covers fruit trees in the event of drought, landslides, or fire; fruit in the event of hail, drought, excessive moisture, extreme heat, or fire; and the quality of fruit in the event of hail, heavy rain, or storms.

The provision of insurance for fruit farms is seen as an extension of North Korea’s ongoing efforts to earn foreign currency through insurance companies.

The fact that various insurance products are appearing in North Korea has attracted attention in the context of North Korea’s recent economic developments. Since Kim Jong Un came to power, the regime has tried to recognize and protect private property as the market economy has expanded through the growth of companies’ independent management rights and the expansion of private profits. Especially in the case of insurance companies, it is believed that the regime is trying to maximize profits by generating additional income through insurance premiums.

ORIGINAL POST (2015-8-17): Elizabeth Shim reports the following at UPI:

On Tuesday, Pyongyang’s Korea National Insurance Corp. posted on its website information on annual meetings held in each province. Issues of mobile phone insurance were discussed during the meetings, South Korean news agency Yonhap reported.

The North Korean insurance firm said in statement that new businesses were being introduced to meet the increased demand for mobile phone insurance in Pyongyang and the provinces, South Korean television network SBS reported.

The mobile phone is becoming a central component of everyday life for many North Koreans, particularly for merchants who are on the road to sell wares around the country – but damage or loss of phones are raising the demand for insurance in the country.

Egyptian firm Orascom owns a 75 percent stake in North Korea’s main network, Koryolink, and offers services to 2.4 million North Koreans.

Other insurance mentioned include new policies for agriculture and protection plans for large-scale fruit farms by the Taedong River and in Kangwon province are being assembled, according to North Korea. The plans would provide protection against weather effects like “El Nino,” that is resulting in increased drought, torrential rain, high temperatures and other factors that are hurting crops.

The Korea National Insurance Corporation web page is here. Here are the two specific reports mentioned in the article:

Annual conference of provincial KNIC branches held

The annual conference of provincial branches of Korea National Insurance Corporation was held in Pyongyang on February 25th and 26th.

It was attended by head-office officials concerned and branch managers, and accountants thereof, of different provinces.

Its agenda involved review of last year’s insurance operations conducted by the provincial branches, and determination of their goals to be reached this year.

Great appreciation was shown in the conference for the branches including the ones in Pyongyang, North Hamgyong Province, Ryanggang and Jagang Provinces, all of which, last year, introduced new insurance products, like mobile phone insurance, into sale, and brought an increase in the number of the insureds and objects to result a rise in premium income, and made prompt indemnifications on a scientific basis thus contributing to the stabilization of operation, production of the insureds concerned and people’s lives, as well.

Stress was laid on adoption and development of effective business strategies plus further improvement and intensification of insurance operation upholding the slogan reading “ Let us all turn out in the general offensive to hasten final victory in the revolutionary spirit of Paektu!”, thus enhancing the role of insurance in line with the development of national economy and improvement of the livelihood of the people as befitting the significance of the year marking the 70th founding anniversary of the Workers’ Party of Korea.

Lectures were given on business practices involving accountancy and some insurance accounts during the conference.

Fruit Crop Insurance to be introduced in future

According to a far-reaching plan of Chairman Kim Jong Il and supreme leader Kim Jong Un to supply the people with fresh fruit in and out of season, Taedonggang Combined Fruit Farm had been built as the best integrated base for fruit production, keeping production going on a high level, and furthermore, Kosan Fruit Farm has been expanded as a large-scale fruit farm with the introduction of scientific, intensive and modernized methods into fruit production.

At present, the farms have boosted production by applying the densely planting method of dwarf fruit trees following the world-wide trend of fruit farming development and growing several kinds of fruit trees including high-grade apple, pear and peach as befits the specific conditions of our country.

They grow apple trees of Korean original varieties such as Hwangju, Pukchong and Unryul together with dwarf apple trees of more than a hundred of varieties including Granny Smith, Fuji and Golden Delicious,and meet their own demand for young saplings by growing them on their own.

However, there have frequently occurred abnormal weather phenomena due to El Nino in recent years, causing negative effects on agriculture and fruit farming in our country and its surrounding countries.

As far as fruit farming is so greatly influenced by the nature and terrain and weather conditions as agriculture, Korea National Insurance Corporation (KNIC) has intention of newly underwriting insurance contracts with fruit farms in our country so as to put production on a normal basis under the adverse weather conditions recently occurred.

The subject matter insured under Fruit Crop Insurance shall be fruit and fruit trees cultivated by fruit farms in DPRK, and the covered risks are as follows;

– Yield Loss Coverage

Drought, freezing, landslide, fire,

– Fruit Tree Loss Coverage

Hail, drought, excessive moisture, extreme heat, fire,

– Quality Loss Coverage

Hail, torrential rainfall and windstorm.

In 2013, KNIC conducted a risk survey on some fruit farms in our country in cooperation with international loss adjusters, and since then KNIC has underwritten insurance contracts with those farms.

KNIC, on the basis of practical experience gained at that pilot stage, shall cover against the risks mentioned above modernized and large-scale fruit farms including Taedonggang Combined Fruit Farm and Kosan Fruit Farm within a few years to come.

Although KNIC has a dubious history, today the group still posts regular financial information which (if accurate) would make it one of the most financially transparent organizations in the DPRK (Congrats to them for at least trying). See tables here, here, and here.

Previous posts on the Korean National Insurance Corporation here.

Once they figure out crop insurance, the next step should be a commodity futures market!

Read the full UPI story here:
North Korea to provide insurance for drought, lost phones
UPI
Elizabeth Shim
2015-8-12

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US marine insurance company fined for North Korea dealings

Friday, August 7th, 2015

According to UPI:

A New York marine insurance firm has agreed to pay fines for violating U.S. sanctions against North Korea, Cuba and Iran.

Insurance provider The Navigators Group, Inc. admitted the company provided North Korea vessels with marine insurance, according to a statement from the U.S. Treasury’s Office of Foreign Assets Control on Thursday.

OFAC said Navigators had committed a total of 48 violations: The firm was found in violation of North Korea sanctions including Executive Order No. 13466 and various sanctions against Iran, Cuba and Sudan.

The firm has agreed to pay a reduced fine of $271,000 — down from an initial penalty of $750,000. Of the $750,000 amount, $570,000 was a fine for North Korea sanctions violations.

OFAC said the penalty was reduced after Navigators voluntarily disclosed information of its violations and cooperated with investigators.

Navigators earned $1.1 million in insurance premiums between 2008 and 2011 from 24 individual policies for North Korea vessels.

Between 2009 and 2010, the firm delivered $12,000 in payouts.

Despite sanctions, North Korean ships remain active at sea.

Read the full story here:
New York marine insurance company fined for North Korea dealings
UPI
Elizabeth Shim
2015-8-7

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Real estate and insurance laws adopted for SEZs

Wednesday, July 22nd, 2015

According to KCNA:

Rules of Real Estate and Insurance in EDP Adopted

Rules of real estate and insurance in the economic development parks (EDP) were adopted according to the decision of the Presidium of the Supreme People’s Assembly of the DPRK.

The rule of real estate consists of seven chapters and 59 articles and the rule of insurance four chapters and 52 articles.

The rules deal with possession, registration and employment of real estates, their rent and rate, conclusion of insurance contract, formalities of insurance offices, etc. in the EDP.

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New KNIC web page

Thursday, June 19th, 2014

The Korea National Insurance Corporation (KNIC) has a new web page that is internet accessible. Martyn Williams was the first to notice it. Although the web page offers information in English and Korean, I have only examined the English portal and I am unaware if there are significant differences between the two.

According to the web page:

KNIC, as a sole insurer of the DPR Korea has over 10 provincial insurance branches and over 200 insurance offices at municipal (district) and county levels under its umbrella nationwide and representative offices overseas.

The English web page provides basic financial and corporate information from 2008-2012. You can check out financial highlights, underwriting performance, and the consolidated balance sheet. It is unclear why 2013 and Q1 2014 data is not presented, but it is not like the shareholders or regulators are going to be up in arms about it.

On the corporate side we have a letter from the chairman of the executive management committee (since there are no shareholders he cannot be chairman of the board of directors)–again seeming to date from late 2012 or early 2013. We also see a list of the members of the executive management committee and an organization chart. The organization chart shows a list of internal divisions but does not explain how KNIC is linked to the cabinet.

KNIC posted a table of financial data (all numbers are in millions of KPW and cannot be verified):

KNIC-table

The chart shows gross written premiums (총접수보험료) experienced an average growth of 16.6% (from 41,939m KPW to 48,905m KPW) between 2008 and 2012. Investment revenue (투자수입) also increased 87% (from 1,597m KPW to 2,996w KPW). Profits (순소득), however, fell 31% on average from 8,041m KPW in 2008 to 5,544m KPW in 2012. So over time, the firm has experienced increasing costs. I am not sure what these costs are, but if you love forensic accounting, please go through the financial reports and let me know.

The DPRK won experienced a significant loss in value compared to the US$ on the black market in 2012, falling from 4,400 to 9,100 per 1$. Using an annual average rate of 6,750 KPW to the US$, profits totaled just $821,333. Using the black market rate of 9,100, profits total $609,203. Using the official rate of 100KPW to the US$, profits grow to $55.44 million. Using the official Euro rate of 130KPW, profits total E42.64 million.

It is unclear what exactly “Pre-state payment result” (국가납부전 결과) is, but I believe it is the equivalent of “Earnings Before Taxes (EBT)” under Generally Accepted Accounting Principles (GAAP). Since the DPRK has officially abolished taxes, direct cash transfers to the state must take another name, so it appears to simply be “State Payment”, but it is definitely not “tax”.

“Profit for the year” listed for each year is .675 of the “Pre-state payment result” which tells us the unofficial tax rate on the firm is a flat 32.5% (1-.675) on net earnings.

It is unclear what happens with profits in these firms. In privately owned firms in capitalist countries, profits are generally reinvested in the business or distributed as dividends to shareholders, partners, or proprietors.

Moving on to the corporate side, the web site lists the following major operational departments:

1. Property Insurance Department is in charge of non-life insurance classes, such as property, crop, livestock, engineering and motor applied from institutions, enterprises, cooperatives and individual citizens.

2. Marine Insurance Department handles such lines as marine hull, cargo and liability, aviation hull and liability applied from institutions, enterprises and cooperatives.

3. Life Insurance Department provides life and personal accident coverage applied from institutions, enterprises, cooperatives and individual citizens.

4. Economic Cooperation Insurance Department offers different classes of insurance to newly developed economic zones and foreign invested enterprises (foreigners, joint ventures, representative offices, correspondent branch offices, embassies and international organizations) including Rason Economic and Trade Zone and Hwanggumphyong and Wihua Islet Economic Zone.

5. Reinsurance Department organizes reinsurance protection for primary insurance accounts written by KNIC. This department has a bad reputation in the west.

6. Investment Department conducts investment activities into financial securities and mining, and manages non-insurance enterprises like a shipping company.

7. Additional divisions: Market Research, Insurance Cooperation, Financial Supervision, Finance & Accounting, Administration and Protocol, all of which are engaged in their respective functions.

 

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North East Asia Bank

Friday, May 16th, 2014

The North East Asia Bank has received a new headquarters building in downtown Pyongyang, next to the Changgwang Hotel:

NorthEastAsiaBank-2013-12-1

 Pictured Above (Google Earth, 2013-12-1): Pyongyang’s North East Asia Bank

The Ministry of Unification offers some details on the bank. I translated and altered their information to provide this information:

The ING-East Asia Bank was founded as a joint venture in December 1995 by Korean International Insurance Company(조선국제보험회사) [A subsidiary of the Korea National Insurance Corporation (조선민족보험총회사)] and ING of the Netherlands. The bank was established to to facilitate various financial transactions for foreign investors in the Rason SEZ. Disappointed in the North’s underdeveloped financial system, ING stepped out in 1999.  Korean International Insurance Company acquired  ING’s share and changed the Bank’s name to the North East Asia Bank (동북아시아은행).

According to Kim Kwang-jin, “Change in Foreign Currency System in North Korea and it’s Increasing Dependency on Hard Currency” (2008, p. 27):

 In June 11, 2000, Kim Jong il has personally gave his command to give the [North East Asia] Bank the power to manage funds of the Organization and Guidance Department’s administrative organs. 

The bank has not been featured in the North Korean media.

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Insurance in the DPRK

Thursday, July 12th, 2012

Jakub Rehor and Geoffrey See of Choson Exchange post interesting information on insurance in the DPRK:

According to the Choson Exchange:

In the planned, state-controlled economy of North Korea, familiar concepts (including insurance) acquire a very different meaning. In a market economy, insurance coverage indemnifies individuals or corporations for losses suffered due to natural disasters, accidents, sickness, or death. In North Korea, what is called “insurance” functions as a fundraiser for certain entities in the government.

There are two kinds of insurance products in North Korea, individual and enterprise insurance. Both are compulsory and are administered by KNIC (Korea National Insurance Corporation). Compulsory individual insurance is deducted automatically from salaries, and is used to fund the state-run healthcare system. Individuals cannot file claims under this insurance; all payments go into the healthcare system to cover its costs and to other state-directed uses. This individual insurance program was originally administered by Korea Central Bank, but parts of it were moved to KNIC where it formed a new department.

Individuals do not have the option of buying property or life insurance in DPRK. Only state-owned enterprises can use property insurance. Compulsory enterprise insurance covers property losses from all major perils (there is exclusion for war). There are no separate policies or riders for windstorm, earthquake, flooding, etc. Instead, policies specify coverage by type of property (animal insurance, machinery insurance, etc.)

Pricing is set without regard to individual risks and loss history. Rather, insurance operates on a pooled basis, with the goal of roughly matching premiums with claims and administration costs. There are no reserves and the state absorbs any losses or profits. As a result, KNIC has no incentive to care about profitability or correct pricing (and, presumably, service) for local insurance operations priced in North Korean won.

There is no independent regulatory authority in DPRK overseeing KNIC’s activities. In theory, the Central Bank and Finance Ministry should be involved, but in reality they don’t have the expertise or political backing. The only oversight of KNIC comes from the party which provides mainly political supervision.

Given the pooled nature of the compulsory policies and lack of risk-based pricing, KNIC acts mainly as an administrator, collecting premiums and disbursing payments. In this position it functions as a revenue generator for the government via two channels:

1. It fails to pay market replacement value of losses. Claims are settled at official government prices which do not reflect market reality.

2. It has been alleged that KNIC has been involved in reinsurance fraud. Media reports claim that European reinsurers write policies for KNIC which then submits false claims, or retains a portion of the claim settlement payments rather than passing it on to the insured.

The existing insurance arrangements in DPRK are clearly inadequate for the needs of foreign joint ventures operating in the Special Economic Zones. If North Korea hopes to attract foreign investment, it needs to modernize its insurance system to bring it into line with expectations of outside investors.

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DPRK sets up insurance firm to attract FDI

Sunday, March 11th, 2012

According to Yonhap:

North Korea has established an investment insurance firm recently in what is believed to be an effort to attract more foreign investment by reducing risks stemming from uncertainties in the communist nation, a source said Sunday.

The North’s firm is expected to purchase reinsurance from an international company, the source said. The system is similar to an insurance measure that South Korea’s government has been operating to compensate its businesspeople for lost investment in the North.

It marks the first time Pyongyang has introduced such an insurance system for foreign investors.

“For foreign investors, this could ease concerns about investment loss risks stemming from uncertainties of North Korea,” said the source familiar with economic affairs in the communist nation. The source said, however, that it is questionable how effective the measure will be in drawing outside investment.

North Korea has long sought to attract foreign investment to revive its broken economy, but with little success because investors stayed away from one of the most closed nations, which is under international sanctions over its pursuit of nuclear and weapons of mass destruction.

The source also said that the word, “reform,” has been used among North Korean bureaucrats, and that this could signal that Pyongyang may announce a set of bold economic reform measures around April’s commemoration of the 100th birthday of late North Korean founder Kim Il-sung.

“Reform” has been considered a taboo word in the North, along with the term, “openness,” because Pyongyang has rejected international calls for it to reform and open up to the outside world as part of a U.S.-led attempt to topple the autocratic regime.

Should Pyongyang take any economic reform measures, they would mark the first such steps since new leader Kim Jong-un took over the isolated nation after his late father Kim Jong-il died of a heart attack in December.

Read the full story here:
N. Korea sets up insurance firm to attract more foreign investment
Yonhap
2012-3-11

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A North Korean Corleone

Wednesday, March 7th, 2012

Sheena Chestnut Greitens writes in the New York Times:

What kind of deal do you make with a 20-something who just inherited not only a country, but also the mantle of one of the world’s most sophisticated crime families? When Kim Jong-un, who is thought to be 28 or 29, became North Korea’s leader in December after the death of his father, Kim Jong-il, he became the de facto head of a mafia state.

(more…)

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Foreign shareholding in Daedong Credit Bank sold

Sunday, August 28th, 2011

Pictured Above (Google Earth): The Taedong Credit Bank offices at the Potonggang Hotel.  See in Google Maps here.

London UK/Pyongyang DPRK, 26 August 2011
The Board of Daedong Credit Bank is pleased to announce that the foreign shareholding in Daedong Credit Bank has been sold to a Chinese based corporate entity, the “Nice Group”.

The foreign-appointed directors on the Board of Daedong Credit Bank have resigned with immediate effect, and have no further interests (financial or fiduciary) in the company.

Outgoing CEO of Daedong Credit Bank, Nigel Cowie noted:

“I am now heavily involved with a second joint venture company in the DPRK, Hana Electronics JVC. Established in 2003, this company has enjoyed solid commercial success and has recently opened its new headquarters building, together with the expansion of its business lines.

The success of both ventures has been such as to necessitate a decision to focus on one or the other, and a commercial decision had to be made.

The bank is continuing to enjoy the commercial success it has seen for the past 16 years, but ironically the decision has been made easier by the general sanctions-laden environment in which financial business here is framed these days.

As to the possibility of ever re-entering the bank, any decision we make will be based purely on commercial considerations.”

Both Hana Electronics and Phoenix Commercial Ventures bank with DCB, and will continue to do so.

About Daedong Credit Bank

Daedong Credit Bank is a joint venture retail bank based in Pyongyang. It was established in 1995 as “Peregrine Daesong Development Bank”. The Bank underwent a change of name and foreign ownership in 2000.

The wealth of experience garnered over Daedong Credit Bank’s 16 years of successful operation is unrivalled.

Daedong Credit Bank was the first, by fifteen years, foreign majority held bank in the DPRK. DCB is proud to be regarded as a flagship successful joint venture in the DPRK, and a key part of the infrastructure needed to assist the foreign-invested joint ventures, which contribute to the country’s economic development.

The bank’s principal function is to offer normal “high street” banking facilities in hard currency to foreign companies, joint ventures, international relief agencies and individuals doing legitimate business in the DPRK.

Daedong Credit Bank was the first bank in the DPRK to introduce, and vigorously implement, a comprehensive set of anti-money laundering procedures. DCB’s anti-money laundering procedure manual was introduced eight years ago, and subsequently updated based on anti-money laundering guidelines provided by the Asian Development Bank. The manual has been sent to, and accepted by, DCB’s international correspondent banks.

Daedong Credit Bank also maintains strict procedures for the detection and rejection of counterfeit bank notes; it uses regularly updated note checking machines, and has personnel with over 15 years of experience of handling notes.

Daedong Credit Bank is strongly positioned in relation to the future economic development of the DPRK, and, being the oldest established foreign invested commercial bank in the DPRK, it is the intention of the bank to capitalise on these advantages.

CONTACT INFORMATION
Daedong Credit Bank office address in Pyongyang is:
Daedong Credit Bank
Suite 401, Potonggang Hotel
Ansan-dong
Pyongchon District
Pyongyang
Democratic People’s Republic of Korea
www.daedongcreditbank.com

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