Archive for the ‘International Organizaitons’ Category

Kim Jong-un announces need for financial reform

Monday, December 14th, 2015

(Benjamin Katzeff Silberstein)

The first meeting for 25 years of North Korean banking and finance officials was held a few weeks ago, Yonhap reported:

The Third National Conference of Financial and Banking Officials held on Sunday at the People’s Palace of Culture in Pyongyang was reported by the (North) Korean Central News Agency (KCNA) and Korean Central TV, monitored in Seoul.

“The conference reviewed successes and experience gained by those in the field of finance and banking in the past,” the KCNA said in an English report carried on Sunday.

The meeting also discussed ways to ensure “the financial guarantee for building a thriving nation,” according to the state media.

In a letter sent to the conference, North Korean leader Kim Jong-un highlighted the important role of the financial sector for national development.

“To improve financial and banking work is an inevitable demand for hastening the building of a thriving nation,” Kim was quoted as saying in the letter. “Reliable financial resources are necessary to build the people’s paradise featured by strong national power and great prosperity.”

Kim also ordered “revolutionary measures for steady development” of the financial system, as well as “fluent circulation of currency.”

It was North Korea’s first meeting of its kind since the last second session was held in September 1990 under the leadership of late leader and North Korean founder Kim II-sung.

Read the full article:
N.Korea hosts 1st bankers’ meeting in 25 yrs
Yonhap News
2015-12-14

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How a telecom investment in North Korea went horribly wrong

Wednesday, November 18th, 2015

By Benjamin Katzeff Silberstein

In PC World, Martyn Williams of North Korea Tech has an interesting piece on the story of Orascom in North Korea:

An Egyptian company that launched North Korea’s first 3G cellular network and attracted as many as 3 million subscribers has revealed that it lost control of the operator despite owning a majority stake.

The plight of Orascom Telecom and Media Technology in North Korea takes place against a backdrop of rapid telecom modernization and a public eager to adopt a new technology. It’s ultimately a lesson in the perils of getting into bed with a government that’s not known for respecting international law.

When Orascom announced plans to launch the 3G service in 2008 it met with skepticism. The North Korean government severely limits its citizens’ ability to communicate and has jailed or killed anyone who speaks out against the regime. The regime has regularly threatened war against its foes and was under sanctions at the time for a 2006 nuclear test.

But Orascom Chairman Naguib Sawiris saw something else: a land that technology had forgotten. He’d successfully built cellular networks in other developing countries, and North Korea seemed a perfect candidate, especially with its low fixed-line penetration.

Read the full story:

How a telecom investment in North Korea went horribly wrong
PC World
Martyn Williams
11-17-2015

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2015 North Korea floods

Wednesday, August 12th, 2015

By Benjamin Katzeff Silberstein

Just like most summers for the past few years, North Korea has once again been hit by flooding. According to the International Red Cross (IFRC):

The Democratic People’s Republic of  Korea (DPRK) is experiencing flooding associated with seasonal rains, hitting areas like Hwanghae and the south and north Hamgyong provinces since early August. According to the State Committee on Emergency and Disaster Management (SCEDM), the Government of  DPRK and DPRK Red Cross Society, 3,455 people were affected, 21 were reported dead while 9 others remain missing. The floods have damaged or destroyed 968 houses and are expected to worsen in the coming days as the rainy season continues.

So far, the damage seems far smaller than the floods of both 2012 and 2013. For example, the number of people “affected” is reported as 3,455 people and 968 houses have been destroyed (see above quote), but in 2013, about 4,000 families lost their homes and 50,000 people were displaced. The number of deaths is also far smaller than in 2013 (33) and 2012 (169).

The South Korean government is thinking about stepping in. Korea Herald reports:

The Unification Ministry said that the government is reviewing whether to help North Korea cope with the flood.

“We are checking the damage from the flood in North Korea, based on data by the weather agency and international organizations,” Jeong Joon-hee, the ministry’s spokesman, told a regular press briefing.

Jeong said that the government would take into account various factors, including the level of the damage and the North’s reaction before making its decision.

Either the Red Cross and the UN Office for Coordination of Humanitarian Affairs (OCHA) are using different assessment methods, or the counts have been upped in between August 10th and 12th. Of course, it is also possible that more rain has fallen and increased the damage. The OCHA reported in their “Snapshot” document for the period between August 4th and 10th that “over 698 houses” had been destroyed while the Red Cross gave the figure 968.

The UPI also reports on the flooding, citing the OCHA figures:

North Korea is recovering from torrential rains that caused 21 deaths between Aug. 1 and 5, according to the U.N. Office for the Coordination of Humanitarian Affairs.

The OCHA report published Monday said rains and subsequent flooding in South Hwanghae, South Hamgyong and North Hamgyong provinces affected 3,400 people.

The U.N. said 21 have died and nine are still missing. The floods destroyed 690 houses and brought down public infrastructure, including roads, bridges and dams.

Crops also were seriously damaged – 4,000 hectares in total, according to the report.

The U.N. agency said the North Korean Red Cross is closely cooperating with local authorities to assess the scope of the damage. The International Federation of Red Cross and Red Crescent Societies is working with Pyongyang’s Red Cross to distribute relief aid to seven communities across the three provinces.

Rodong Sinmun also reports on the flood damage today, saying that the previously purged but resurrected Premier Pak Pong-ju has surveyed the flooding damage:

DPRK Premier Pak Pong Ju made a field survey of the flood damage in South Hwanghae Province.

Torrential rain and tsunami hit the province early this month, leaving breakwaters partially destroyed and dwelling houses, roads, railways and bridges inundated and damaged.

Farmland in some areas was inundated and washed away, making it hard to expect any harvest.

Going round several afflicted areas in Haeju City, Pyoksong and Sinwon counties, he learned about the damage there.

The consultative meeting convened on the spot discussed the issue of conducting the work for recovering from damage, directing primary efforts to bringing the living of the people in the afflicted areas to normal.

As the summer moves on, more is sure to follow.

(UPDATE): Here is the report from KCNA (2015-8-12):

Flood Damage in DPRK

Pyongyang, August 12, 2015 19:51 KST (KCNA) — South Hwanghae Province of the DPRK was hit hard by flood.

Early this month, the province witnessed downpour and tidal waves due to the seasonal rainy front that swept over the whole country.

Much rainfall was registered in all parts of the province. In particular, rainfall of 397 millimeters was observed in Pyoksong County between 18:00 of August 4 and 12:00 of August 5, 205 mm in Haeju City, 152 mm in Ongjin County and 125 mm in Sinwon County.

The downpour left more than 10 people dead, hundreds of dwelling houses destroyed and more than 1 000 hectares of arable land inundated or washed away.

Meanwhile, tidal waves left the dykes partially destroyed and roads, railways and bridges inundated or ruined.

At present servicepersons and inhabitants in the afflicted areas are working hard to clear away the flood damage.

(UPDATE): Radio Free Asia (2015-8-14) reports that river barriers ordered built by the government have come to exacerbate the flooding damage:

River barriers that North Korean authorities built to help irrigate crops affected by a recent drought may have contributed to the destruction caused by floods in certain parts of the country, sources inside the isolated nation said.

The barriers constructed by authorities in spring blocked the flow of water through gorges, so that torrential rains which fell in parts of the country at a high elevation in early August overflowed, destroying farmland and houses, said a source in North Hamgyong province, one of the affected areas.

“Despite strong opinions that the barriers to enable irrigation should be eliminated to prevent flood damage, nobody took any action,” he said. “Since the barriers were set up under [North Korean leader] Kim Jong Un’s order, no executive order could bring them down.”

Before the river barriers were built, some North Koreans pointed out that building them could cause greater flood damage, he said, but the warning fell on deaf ears.

The city of Hoeryong in North Hamgying province experienced downpours from late July to early August, and authorities declared Hwadea, Kiljou, and Myongchon counties flood-affected areas, he said.

They also declared the city of Tanchon and Heocheon and Riwon counties in South Hamgyong province flood-affected areas, he said.

The drought damage has become worse because of Kim Jong Un’s inflexible instructions, the source added.

Read the full story here:

North Korean flood Damage Made Worse by River Barriers

Sung-hui Moon

Radio Free Asia

2015-8-14

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North Korean workers in the Middle East

Friday, July 3rd, 2015

According to the Choson Ilbo:

North Korea used civilian passenger planes to transport hard currency seized from expat laborers in the Middle East following the closure of its overseas banks for violating international law.

Sources said since prosecutors in Kuwait ordered the closure of the local branch of North Korea’s Trade Bank on charges of money laundering and illicit transfers, the North has used twice-monthly Air Koryo flights to Kuwait to ferry seized wages back to the North.

There are 50,000 to 60,000 North Korean laborers in 16 countries. In Kuwait, there have been some 4,000 since 1995, toiling at construction sites and receiving around W1 million a month (US$1=W1,123), of which the regime confiscates 70 to 80 percent.

The workers send the remainder back to their families in the North and often survive by begging or taking on overtime and extra menial jobs.

Around 2,000 North Koreans work in the United Arab Emirates and 1,800 in Qatar.

Sources said the bank’s Kuwait branch has sent back more than US$1 billion to North Korea over the last 20 years confiscated from laborers.

The bank has been blacklisted by the U.S. government for funding the development of weapons of mass destruction, and the local branch had been under investigation by Kuwaiti authorities over the last two years. Kuwaiti prosecutors seized around $1 million from the branch on suspicion of money laundering.

According to sources, North Korea has filed a lawsuit in order to recover the seized money.

One source said officials from companies supplying North Korean workers now board Air Koryo planes with suitcases stuffed with cash, while laborers are sending back money to their families through ordinary passengers.

“Air Koryo has become a new channel used to transport tens of millions of dollars of money to the Workers Party,” which runs the bank, the source said.

Read the full story here:
N.Korea Uses Civilian Airliners to Haul Hard Currency
Choson Ilbo
2015-7-3

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KoryoLink drops subscription fees

Wednesday, July 1st, 2015

According to Radio Free Asia:

A dramatic decrease in the monthly rate for cellphone services in impoverished North Korea has seen the number of subscribers skyrocket, but sources inside the reclusive nation say the data may be misleading, as people sign up for two mobile phones at once in order to avoid massive overage fees.

The cost of using a cellphone on Koryolink’s 3G network dropped from 25 yuan (U.S. $4) per month at the end of 2013 to a maximum of 1,000 won, or 1 yuan (U.S. $0.16), in 2014, prompting North Koreans to sign up in droves, according to an official with the Wireless Service Department in Yanggang province.

The surge in subscriptions has prompted the government to open a number of storefronts staffed with agents to deal with the demand and sell cellphones associated with the services, the source said, speaking to RFA’s Korean Service on condition of anonymity.

“Since last year, cellphone agencies have been established in each city and province,” he said.

“In Hyesan (the administrative center of Yanggang province), a cellphone agency was set up next to the Kim Jong Suk Art Theater (named after the grandmother of current regime leader Kim Jong Un), where many people often gather.”

According to the source, the base rate of 1 yuan per month provides subscribers with up to four hours of free calls and 20 text messages. Calls and other services in North Korea are limited to usage within the country only, except for resident foreigners, tourists and selected elite members of society.

The Wireless Service Department official did not provide statistics for the increase in subscribers.

Orascom, an Egyptian telecom company that jointly operates Koryolink with the state-owned Korea Post and Telecommunications Corporation, has said around 2.4 million, or 10 percent, of the country’s estimated 24 million people were signed up with the carrier by the end of June 2014.

In comparison, Orascom said Koryolink had hit 2 million users in May 2013, adding a million subscribers in the 15 months prior.

Inflated numbers

A second source from North Hamgyong province told RFA that the recent increase in subscriptions, linked to the purchase of new phones, had earned praise from central authorities.

“Last year, North Hamgyong province took first place in national sales of cellular phones and the head of its Wireless Service Department received a commendation,” the source said, adding that the capital Pyongyang came in second place, followed by North Pyongan province.

But while the base rates for cellphone services are cheap, subscribers are charged exorbitant fees totaling as much as 100 times the cost of monthly services if usage limits are exceeded, he said.

Because four hours of free talk time and 20 text messages are insufficient, the source said most merchants and officials choose to purchase two cellphones and subscribe to plans for both, allowing them to double usage each month and avoid the high overage fees.

The double purchasing of phones and monthly services had artificially inflated the number of subscribers, he said.

Skeptics have questioned the accuracy of Orascom’s claim of 2.4 million subscribers, saying that—after subtracting a standing army of 1 million soldiers who cannot own cellphones due to security reasons and at least 3 million children aged 10 years or younger—it would suggest more than one in 10 of North Korea’s mostly poverty-stricken citizens use mobile services.

Reports also say that handsets which operate on Chinese networks across the border are regularly smuggled into the country, further complicating estimates of how many cellphone users there are in the North.

North Koreans are reportedly allowed to access only certain 3G services with their cellphones, including SMS and MMS messaging and video calls, but not the Internet.

Read the full story here:
Dramatic Decrease in Mobile Rates Draws Subscribers in North Korea
Radio Free Asia
2015-07-01

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DPRK and FATF (UPDATED)

Monday, June 29th, 2015

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

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

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

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

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

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

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

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

Read the full advisory here (PDF)

Here is coverage in Yonhap.

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

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

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

Iran
Democratic People’s Republic of Korea (DPRK)

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

Algeria
Ecuador
Myanmar

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By Kim Ji-young, reporter from Pyongyang

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

“What cannot be allowed according to institutional characteristics”

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

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

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

North Korea institutionally does not allow those illegal acts.

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

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

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

DPRK commits itself to anti-money laundering action plan

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

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

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

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

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

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

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

Iran
Democratic People’s Republic of Korea (DPRK)

Democratic People’s Republic of Korea (DPRK)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Samgak Beer

Wednesday, June 24th, 2015

Choson Exchange has let the world know about a new North Korean beer: 삼각맥주

samgak-beer

The name means “triangle” beer, or more accurately “river delta” beer.

It is manufactured at the Rajin Drink Factory (라진음료공장). I do not know where this factory is located, so please let me know if you happen to learn.

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DPRK expels German and American aid workers

Thursday, April 2nd, 2015

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here is coverage in UPI:

North Korea deported a Korean American aid worker and philanthropist on charges of espionage – after receiving $2 million in annual aid from her organization for 25 years.

Pyongyang’s state-controlled media outlet KCNA had blasted Sandra Suh on Wednesday, for partaking in a plot against the North Korean government, and for disseminating “propaganda” about the reclusive state, reported Yonhap.

Suh left North Korea and arrived in Beijing on Thursday, en route to the United States after the announcement.

Choe Jae-yeong, a pastor and an acquaintance of Suh, said Suh was a “doyenne of North Korea aid organizations in the Los Angeles area,” according to Radio Free Asia.

Choe said even in the darkest days of the Great Famine that killed more than two million North Koreans in the 1990s, Suh was at the forefront of providing aid to the needy. At the time, she operated a noodle factory in North Korea’s Hwanghae province and in Pyongyang, and supplied medical aid.

Suh even arranged a trip to North Korea for U.S.-based pastors in order to raise funds and awareness of the need for a hospital for the disabled in North Korea. At one point, she collected used carpets for North Korean orphanages.

The Korean American aid worker had relatives in North Korea and her philanthropic work enabled her to cultivate a friendship with the North Korean authorities.

North Korea’s KCNA claimed Suh had confessed to her crimes and “earnestly begged for pardon.”

The Guardian reported Suh is registered as a founder of Wheat Mission Ministries, established in 1989 to provide food aid and medical technology to North Korea.

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

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

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

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

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

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

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

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

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

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

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

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

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DPRK imports of smart phones in 2014

Friday, January 30th, 2015

According to Yonhap:

North Korea’s smartphone imports from China surged to a record high last year, a sign of a growing number of people there being connected to the net, according to data released Friday.

North Korea brought in US$82.8 million worth of smartphones from China in 2014, almost double the amount recorded a year earlier, according to the Seoul-based Korea International Trade Association.

It marked the largest volume since 2007, when related data were introduced.

Imports of portable data-processing devices, including laptops, also jumped 16 percent on-year to $23 million in 2014 despite a 3-percent decline in the North’s overall imports from China in the year.

Around 10 percent of the communist nation’s 24-million residents reportedly use smartphones, with its 3G network run by Koryolink, a joint venture with an Egyptian company, Orascom Telecom.

See also this post with additional data on DPRK-china trade in 2014.

Read the full story here:
N. Korea’s smartphone imports from China hit record
Yonhap
2015-1-30

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DPRK-China trade in 2014

Monday, January 26th, 2015

According to Yonhap, DPRK-China trade drops slightly in 2014:

North Korea’s annual trade with its economic lifeline, China, fell 2.4 percent from a year ago in 2014, marking the first decline since 2009, data compiled by South Korea’s government trade agency showed Monday.

North Korea’s trade with China totaled US$6.39 billion last year, compared with $6.54 billion in 2013, according to the data provided by the Beijing unit of South’s Korea Trade and Investment Promotion Agency (KOTRA).

The annual trade figures between North Korea and China provided a fresh sign that strained political ties between the two nations have affected their economic relations.

At least on paper, there were also no shipments of crude oil from China to North Korea for all of last year.

A South Korean diplomatic source with knowledge of the matter, however, cautioned against reading too much into the official trade figures because China has provided crude oil to North Korea in the form of grant aid and such shipments were not recorded on paper.

Here is coverage in the Daily NK.

I have been unable to locate the KOTRA report, but the Choson Ilbo adds this:

China’s exports to the North were down 3.1 percent on-year and its imports from the North 1.5 percent, the diplomatic source in Beijing said quoting Chinese trade statistics.

Yonhap followed up with this from a Chinese foreign ministry press briefing:

Asked about the official absence of crude oil delivery to North Korea, China’s foreign ministry spokeswoman, Hua Chunying, referred the question to “competent authorities.”

“You mentioned a specific issue concerning trade between China and North Korea. I would like to refer you to competent authorities,” Hua told reporters during a regular press briefing.

“But, I want to highlight that the economic cooperation and trade between China and North Korea are normal,” Hua said.

Yonhap also provided the following information on oil shipments from China to the DPRK:

In previous years, China’s official shipments of crude oil to North Korea had been absent for several months, particularly after the North’s nuclear tests. However, it was extremely unusual that, at least on paper, China sold no crude oil to North Korea for all of last year.

In 2014, China’s exports of petroleum products to North Korea jumped 48.22 percent from a year earlier to US$1.54 million, according to the data based on Chinese trade statistics and compiled by the Beijing unit of South’s Korea Trade and Investment Promotion Agency.

“Although final statistics show that China’s exports of crude oil to North Korea were counted as ‘zero’ in 2014, experts suggest that the possibility of China’s suspension of crude oil exports to North Korea remains low,” the agency said in a statement.

South Korean diplomatic sources in Beijing have also cautioned against reading too much into the official Chinese trade figures because China has provided crude oil to North Korea in the form of grant aid and such shipments were not recorded on paper.

There has been no clear indication that the 2014 trade figures reflect China’s willingness to use crude oil as leverage to press North Korea to change course in its nuclear ambition.

Yonhap (via Korea Times) also reports that anthracite exports to China are down in 2014:

North Korea’s exports of anthracite to China tumbled nearly 18 percent in 2014 from the previous year, the first annual drop in eight years, data showed Friday.

North Korea exported US$1.13 billion worth of anthracite to China last year, down 17.6 percent from a year earlier, according to data from the Korea International Trade Association.

It was the first on-year decline in North Korea’s anthracite exports to China since 2006.

The volume of anthracite exports also decreased 6.4 percent on-year to 15.43 million tons last year, according to the KITA.

Despite the drop, anthracite accounted for 39.8 percent of North Korea’s total exports to China in 2014.

According to the data, North Korea’s exports of iron ore to China plunged 25.7 percent on-year to $218.6 million last year, the smallest amount since 2010.

For lots more data on the DPRK’s international trade, see also these eight great posts:
1. North Korea-China Trade Update: Coal Retreats, Textiles Surge
2. How Has the Commodity Bust Affected North Korea’s Trade Balance? (Part 1)
3. How Has the Commodity Bust Affected North Korea’s Trade Balance? (Part 2)
4. Nicholas Eberstadt’s “Dependencia, North Korea Style” (I would have gone with “Our Style Dependencia”)
5. NK News on coal shipments in 2014.
6. Radio Free Asia on coal shipments.
7. N. Korea’s smartphone imports from China hit record
8. China’s exports of jet fuel to N. Korea rebounds in 2014

Read the full story here:
N. Korea’s 2014 trade with China marks 1st drop in 5 years
Yonhap
2015-1-26

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