North Korean Economy Watch

Yonhap
3/3/2007

North Korea’s top nuclear negotiator arrived in New York Friday to attend his country’s first working group session with the United States on normalizing their diplomatic ties.

Vice Foreign Minister Kim Kye-gwan, leading a seven-member entourage, avoided reporters at the airport and is believed to have headed directly to a hotel.

He was expected to stay in a hotel near the U.N. headquarters, a location which is easy to reach from the North Korean mission to the global body.

The senior official is scheduled to begin the two-day working group session here Monday with his U.S. counterpart, Assistant Secretary of State Christopher Hill, at the U.S. mission to the U.N. in Manhattan.

Kim is the highest-ranking North Korean official to come to the United States since Vice Marshal Jo Myung-rok went to Washington as his country’s special envoy in October 2000.

The vice foreign minister represents North Korea in the six-party talks over Pyongyang’s nuclear ambitions, which also involve South Korea, the U.S., China, Russia and Japan. The envoys struck a deal on Feb. 13 under which Pyongyang would shut down its nuclear facilities and eventually disable them in phases. In return, the North would receive political and economic incentives provided by the other participating countries.

The agreement also established five working groups, including one on diplomatic normalization talks between the U.S. and North Korea.

Kim’s schedule has not been made public, but he is expected to attend a closed-door seminar hosted by the Korea Society, a New York-based nonprofit organization working for the promotion of friendship between the U.S. and South Korea, before the working group session begins.

The working group meeting is expected to focus on setting the agenda and schedules for future normalization talks and discussing a possible visit by Hill to North Korea.

The two sides are also expected to open discussions on removing North Korea from the U.S. list of terrorism-supporting nations, lifting sanctions and unfreezing North Korean assets in the U.S.

Kim began his week-long visit to the U.S. when he arrived in San Francisco early Thursday. He is known to have attended a closed-door seminar at Stanford University sponsored by various groups that have dialogue channels with Pyongyang. But the rest of Kim’s schedule in San Francisco was unavailable.

Meanwhile, the United Nations Development Program (UNDP) announced that it had no choice but to suspend its operations in North Korea as of March 1 as the necessary conditions set out by the UNDP Executive Board on Jan. 25 have not been met.

“These conditions included adjusting the content of the current Country Program (2005-2006) and the proposed Country Program (2007-2009) for the DPRK to support sustainable human development objectives; ending all payments in hard currency to government, national partners, local staff and local vendors and discontinuing sub-contracting of national staff via government recruitment as of 1 March 2007,” said the U.N. agency on its web site.

But the UNDP noted that its position on operations in North Korea could be reconsidered if these circumstances change..

washington Post
3/3/2007

South Korea on Friday added pressure on North Korea to comply with an international disarmament agreement, refusing the impoverished nation’s demand to restore full aid shipments until after its main nuclear reactor is shut down.

At the first high-level talks between the two Koreas since the North’s underground nuclear test in October, the communist nation “agreed to make joint efforts for a smooth implementation” of its pledge last month to take initial steps toward dismantling its atomic program, according to a final statement.

The North and South also agreed to resume family reunions of relatives split by their border and planned test runs of railway lines between the countries.

North Korea and the International Atomic Energy Agency have agreed on March 13 as the starting date for a two-day visit by the agency’s chief, Mohamed ElBaradei, U.N. officials said Friday. The officials asked for anonymity because they were not authorized to reveal specifics of the trip, which is expected to help alleviate some misgivings that the unpredictable regime might renege on its agreement to shut down its nuclear facilities.

This week’s meetings in Pyongyang were part of the historic reconciliation launched between the Koreas since their leaders met in their first and only summit in 2000. The countries remain technically at war because the cease-fire that ended the 1950-53 Korean War has never been replaced by a peace treaty.

But attempts to bring the countries together have been complicated since 2002, when Washington accused North Korea of secret uranium enrichment efforts that the Bush administration said violated an earlier disarmament deal.

The situation deteriorated further last July when North Korea test-launched a series of missiles, prompting South Korea, one of the North’s main sources of aid such as rice and fertilizer, to put the shipments on hold.

Relations worsened after North Korea’s Oct. 9 nuclear test. But a breakthrough came last month after a revival of six-nation nuclear negotiations — including China, Japan, Russia, the United States and the two Koreas — in which the North pledged to make moves toward abandoning its nuclear program.

Two Koreas agree on fertilizer aid, reunions
Joong Ang Daily
Ser Myo-ja
3/3/2007

A May reunion of some family members separated since the Korean War and the resumption of fertilizer aid to North Korea are among the agreements the two Koreas announced yesterday in Pyongyang.

Video conference calls will take place March 27 to 29, and the face-to-face reunions will happen in early May at the Mount Kumgang resort in North Korea, according to Unification Minister Lee Jae-joung and his North Korean counterpart, Kwon Ho-ung.

The two released a joint statement yesterday wrapping up their four-day meeting. The reunions will be the 15th held; the last round took place in June of last year.

In the talks, which had been stalled since North Korea tested a missile in July, the two Koreas also agreed to quickly resume a project to build a permanent reunion center. Working-level Red Cross officials from both countries will meet Friday at Mount Kumgang to discuss it.

More Red Cross talks are scheduled April 10 to 12 at the same venue to address issues associated with “those who have gone missing since the Korean War.” The term refers to the South Korean war prisoners and kidnap victims still alive in the North.

Although there was no specific mention of rice and fertilizer aid in the statement, Mr. Lee said Seoul will provide them as it has done in the past. Speaking to journalists after wrapping up the talks, Mr. Lee said, “The North will fax its request for fertilizer aid, and the South will provide it accordingly.” He added that “spring is coming fast, so we probably need to hurry.” Seoul has been providing an average of 150,000 tons of fertilizer, used in spring farming, per year. It will provide 300,000 tons this time.

According to the pool report from North Korea, Mr. Lee also said “the matter about rice will be discussed at the economic talks in April and an official decision will be made there.”

The two ministers agreed to expand economic cooperation ― including finalizing of 400,000 tons of rice aid ― during economic talks April 18 to 21 in Pyongyang.

“Since we agreed to meet in Pyongyang in April for economic talks, we will be able to discuss rice aid, taking into account how far the North implemented the Feb. 13 nuclear agreement,” a South Korean official said on the condition of anonymity.

He was referring to the agreement reached last month at the six-nation nuclear talks, in which Pyongyang promised to shut down its main nuclear facility within 60 days in return for aid and economic assistance from other countries.

The two Koreas also agreed to conduct test-runs of inter-Korean railroads before the end of June, as soon as both sides’ military arms are comfortable with the safety measures in place. On March 14 and 15, economic committee representatives will meet in Kaesong to address the plan. The military guarantee is the key for the trains to cross the demilitarized zone between the two Koreas.

Mr. Lee and Mr. Kwon agreed the next round of ministerial meetings will take place in Seoul for four days starting May 29.

BBC
3/3/2007

Thousands of North Koreans living in Japan have demonstrated against what they say is discrimination following Pyongyang’s nuclear test last year.
The protesters rallied in a Tokyo park complaining that their community had been bullied by the police.

Hundreds of police kept them apart from a counter-protest by nationalists.

There are more than 500,000 ethnic Koreans in Japan and bilateral ties have soured since Pyongyang carried out its missile and nuclear tests.

Ban rejected

The Korean residents group, Chongryon, said about 7,000 people attended the protest in Hibiya Park, although local media put the figure at about 3,000.

Some demonstrators carried pro-Pyongyang placards or carried posters of the North’s leader Kim Jong-Il.

They demanded an end to bullying of Korean schoolchildren and the resumption of ferry services to the North that Tokyo shut after the nuclear test in October.

Chongryon official Nam Sung-U told the crowd: “We Koreans in Japan have gone through such suffering during colonial rule and even after liberation. We have united to survive.”

Many of the Koreans in Japan are descended from people brought in as forced labour during the Japanese colonial era early last century.

The governor of Tokyo, Shintaro Ishihara, tried to get the protest banned but the courts rejected his request.

Nationalist counter-demonstrators took up positions along the Koreans’ protest route to chant slogans.

One major thorn in ties has been abductees – four years ago North Korea admitted its agents had kidnapped 13 Japanese citizens in the 1970s and 80s.

Associated Press (Hat tip DPRK Studies)
3/3/2007

Three North Koreans ended a rare and discrete visit to Oregon this week after visiting Oregon State university scientists, orcharists in the Hood River area, the Nike campus, Gov. Ted Kulongoski and attending a Trail Blazers basketball game.

Because of sensitive six-way talks on North Korea’s nuclear program, Mercy Corps, which hosted the visit, declined to release the officials’ names.

Portland-based Mercy Corps is among a handful of humanitarian agencies running programs involving North Korea, which has no diplomatic relations with the United States.

Over 12 years, Mercy Corps has supplied fish and fruit trees for farm projects in North Korea, which has chronic food shortages.

The North Koreans, representing Mercy Corps’ main partner organization, the Korean American Private Exchange Society, arrived Tuesday and were to leave Saturday.

Mercy Corps President Nancy Lindborg said the three visited OSU, which has made scientists available to advise on the agricultural projects. On the way back they met with Kulongoski. They visited orchards in the Hood River area Friday.

At Nike headquarters near Beaverton, they met with managers who gave a presentation on e-commerce, an Internet activity with undetermined relevance in a socialist nation with limited Web penetration.

“I don’t have a specific point of view to share on their visit and the possible opportunities North Korea may present,” said Bob Applegate, a Nike spokesman.

The visit was perhaps the 10th in a series of low-profile North Korean delegations here over the years, Lindborg said. In North Korea, she said, “Oregon is very well-known.”

At the Rose Garden on Thursday the visitors watched the Trail Blazers dismantle Charlotte.

“They’re fans,” said Lindborg, who also attended the game. “Two of them actually play basketball.”

KCNA
3/2/2007

The Veterinary Medicine Institute under the Academy of Agricultural Science has developed an efficient vaccine against swine epizootic disease. It is particularly effective against coli bacillus-caused toxemia.

Once a piglet takes the disease, there are symptoms of facial paralysis and melancholia without eating fodder before dying. It is easily infectious.

It has been known that there is no medicine for the disease but preventive measure.

The scientists of the institute have perfected the vaccine developed over 10 years ago, while the research into the epizootic disease is being deepened in the world.

It has been proved that the vaccine is harmless and can prevent piglets completely from dying of coli bacillus-caused disease.

Also the scientists have established a new vaccination system so as to raise the efficacy of vaccine.

The vaccine production centers built in various parts of the country are mass-producing vaccine for stock-breeding farms and rural households.

KCNA
3/2/2007

“Koryo Pen”, a hand-writing input program developed by the Korean Computer Center is popular in the Democratic People’s Republic of Korea. It enables computer users to input various kinds of documents with an electronic pen without typing.

It is very convenient for those who are not good in typing.

With high character recognition ability, “Koryo Pen” can recognize most of hasty writing whose stroke orders are correct, to say nothing of correct characters.

Symbols and marks are analyzed, too.  There is little problem about a document with foreign characters.

Koryo Tours
March 2, 2007

North Korea has finally confirmed that the Arirang Mass games will be hosted in Pyongyang during the period of April 15th – May 15th this year, we also expect the event to be repeated from August to October but this is not definite yet.

It has also been announced that US citizens will be accepted into DPRK at this time, the only other opportunities Americans have had to travel to North Korea have been in 1995, 2002, and 2005 also for Mass Games events, there are the usual added limitations for US tours (3 night stays as a maximum, must fly both ways from Beijing) but it remains the most fascinating chance of your life to visit a truly enigmatic place to see the kind of event that only the North Koreans can pull off, please see tour dates and itineraries on our website www.koryogroup.com.

From Naenara:

The Law of the Democratic People’s Republic of Korea on Bankruptcy of Foreign-invested Enterprises was adopted by Decree No. 1504 of the Presidium of the Supreme People’s Assembly on April 19, 2000 and is in force.

This law contributes to correct settlement of debts and claims of foreign-invested enterprises and protection of the rights and interests of creditors.

The law consists of 54 articles in 6 chapters.

__________________________________

Chapter 1. Fundamentals (Articles 1-7)

This chapter stipulates the purpose of institution of the law, foreign investors to which the law is applied, conditions of bankruptcy, reason for exemption from their obligations, and a competent court to handle and settle the cases of enterprise bankruptcy.

The law applies to foreign-invested enterprises (equity or contractual joint-venture enterprises, and wholly foreign-owned enterprises) and foreign-invested banks (equity or contractual joint-venture banks, and wholly foreign-owned banks) that are registered as a corporate body of the DPRK and carry out business activities in the territory of the DPRK.

A foreign-invested enterprise may be declared bankrupt when it fails to repay its debts within the set period for its insolvency, or the debts of the business exceed its assets, or the enterprise cannot be maintained any longer due to a grave loss, or the enterprise cannot be dissolved through normal procedures.

An enterprise may be exempted from bankruptcy when there is assurance that the overdue debts can be settled within 6 months from the time of application for bankruptcy or when it can receive financial assistance for its management from an organ, enterprise or association of the DPRK, or when the parties agree to reconcile with each other after an application is made for bankruptcy.

Chapter 2. Application for and Declaration of Bankruptcy (Articles 8-22)

This chapter defines an applicant for bankruptcy, procedures for an application of bankruptcy, the declaration of bankruptcy of an enterprise made by the court and its legal effect, and the organization (or appointment) of a liquidation committee and its responsibility.

The procedures and method for application of bankruptcy are as follows.

A creditor who is unable to receive the repayment of his claim within the period set in the contract may apply for declaration of bankruptcy of the enterprise to the court having jurisdiction over the seat of the enterprise concerned with a view to collecting his claim. In this case, he should obtain an approval from more than one creditor when the enterprise has over three creditors.

The application will state the title (or name) and address of the creditor, the name and address of the legal representative and his agent, the description, amount and period of the claim, the name and address of the enterprise to be declared bankrupt, and be accompanied by documents explaining the reason for non-repayment of the claim and certifying that the approval has been obtained for an application of the bankruptcy.

An enterprise that has become insolvent may apply to the court for its bankruptcy according to a decision of its board of directors or joint consultative board in order to be exempted from its obligations.

The application for bankruptcy will state the contents concerning the enterprise and its operation, a description of the loss of the enterprise and the reasons for its inability to repay its debts, and be accompanied by such documents as a list of debts and assets.

In case that the debts of an enterprise exceed its assets, the liquidation committee in charge of handling the dissolution of an enterprise may apply for its bankruptcy to the relevant court when it is deemed appropriate for creditors and enterprise to declare the enterprise bankrupt.

The application for bankruptcy will state the name and address of the enterprise, information on its assets and debts and the fact that the enterprise cannot be dissolved through normal procedures.

A court will decide whether to accept or reject an application for bankruptcy within 30 days of receipt of the application. In this case, it may undertake investigation as it deems necessary.

When a court believes that an application for bankruptcy is reasonable after the investigation, it will declare the enterprise bankrupt by making a judgment to that effect and send copies of the written judgment to the applicant and the enterprise concerned.

The written judgment will state the name of the enterprise declared bankrupt, the name of the legal representative, the reason for bankruptcy, the date of judgment and the like.

An enterprise declared bankrupt will suspend its bookkeeping, normal property transactions and management activities from the day of receipt of a copy of the written judgment.

An enterprise notified of the declaration of its bankruptcy will, within 2 days of the receipt of the notice, inform the central organ for guidance of economic cooperation of the fact that it has been declared bankrupt and make necessary registration.

The legal representative (manager of an enterprise) or his agent of the bankrupt enterprise cannot leave the seat of the enterprise and his domicile without permission from the court until the bankruptcy procedures have been completed and will give answers to matters related to the bankruptcy or cooperation in the bankruptcy procedures.

Where a bankrupt enterprise has concealed, distributed, donated or transferred at a low price its assets during the period of 6 months preceding the application for bankruptcy or after the submission of the application or where it has waived its claims without legal ground during the period of 30 days preceding the application for bankruptcy or after the submission of the application or where it has afflicted losses upon its creditors in anticipation of its bankruptcy, such acts will be null and void.

Chapter 3. Declaration, Investigation and Determination of Claims (Articles 23-31)

The chapter stipulates the claim declaration, receipt of declaration, investigation and determination of the claims and the preparation of a list of claims.

A creditor to the bankrupt enterprise will declare his claims in writing to the liquidation committee within the period of claim declaration.

Any claim that has not been declared during the period of claim declaration will be null and void.

The liquidation committee will investigate the claims on the basis of the contents of the declaration within the period of claim investigation.

The creditor may institute a civil lawsuit against the complainant before a court handling the bankruptcy case.

The liquidation committee will be responsible for the final determination of claims for which there is discrepancy between the declarations and finding of the investigation and claims for which a complaint has been raised but no civil lawsuit has been instituted.

Claim declarations and list of claims may be kept by the court. The court may allow parties related to the bankrupt enterprise to read relevant documents upon their request.

Chapter 4. Distribution of Assets of a Bankrupt Enterprise (Articles 32-44)

This chapter defines the securing of assets of the bankrupt enterprise, the order of distribution, an assets distribution schedule, distribution of the assets and termination of the bankruptcy case.

Chapter 5. Reconciliation (Articles 45-52)

The chapter stipulates the reconciliation, procedure and method for submission of reconciliation and the decision of the court approving or rejecting the reconciliation.

Chapter 6. Penalties (Articles 53-54)

It defines the authority of the liquidation committee for sanctions and the legal responsibilities for the violation of this law.

Daly NK
Kim Young Jin
3/1/2007

Chairwoman for Hoiryeong City’s North Korean Democratic Women’s Union, Suh Kyung Hee’s husband “K” has been dealing with drugs since the moment he managed his company, Maebong Company. However, as central authorities began to centralize businesses since last year, the company closed its doors and “K” adopted his driver “L” as drug runner and his daughter as the treasurer in charge of distributing illicit drugs to smugglers at wholesale costs to districts such as Musan, Hoiryeong and Onsung.

According to a source in Hoiryeong, K and his driver L had been in confrontation with one another since January. In the past K had procured his drugs from Chongjin and moved them to a base in Hoiryeong. Then, the drugs would be either sold to border smugglers or sold to Chinese tradesmen.

Here is where the conflict surfaced. While, L was in charge of delivering the drugs from Chongjin to Hoiryeong, K became suspicious that L was secretly hoarding the drugs elsewhere. Hence, K conducted an investigation trailing L’s steps at which a disagreement arose.

In early Feb, L voluntarily went to North Hamkyung Security Agency in Chongjin and exposed that Chairwoman Suh’s family had been disclosing in drug dealings. The motive behind L indicting Chairwoman Suh’s family is still unknown.

Some argue that the reason L went straight to the district security office and not the city office in Hoiryeong was because of Chairwoman Suh’s hierarchical position in Hoiryeong city. If L had carelessly reported this case to the city office, it is possible that L would have simply lost his self-dignity.

At present, it seems that rumors about this case are spreading rapidly across Hoiryeong creating unsettling feelings in the city.

People of Hoiryeong city are muttering “High officials must also be shown the seriousness of law,” criticizing Chairwoman Suh’s family for concealing such large amounts of dollars and yuan also Chairwoman Suh, who as the leader of the Women’s Union would advocate severe punishment for female defectors.

100g of North Korean drugs sell for 12,000 yuan

North Korean citizen Park Jong Shim (pseudonym, Sanup-dong, Hoiryeong) who lives in the same suburb as Chairwoman Suh, said in a telephone conversation with a reporter on the 26th “The whole city is raucous because of Chairwoman Suh’s story” and informed “Some people say that the power of law will be enforced properly this time as the district security agency has been involved. On the other hand, some question whether or not those people with so much money and power will be punished according to law, despite the district office being involved.”

Hoiryeong citizen Kang Eun Soon (pseudonym) who defected to China in January said “If I think about the times when Chairwoman Suh would go around making a racket, my teeth rattle.” Like second nature, Chairwoman Suh would prowl around advocating, “With the slightest nudge, Hoiryeong women jump to China, not only defiling their bodies but dishonoring the land where mother Kim Jong Sook (Kim Jong Il’s mother) was born.”

Kang said “Usually, Suh would conduct political meetings through her Women’s Union and argue that the reason there was so many public trials for border crossers and illegal acts in Hoiryeong was due to the fact that women could not look after their family. She would say that Hoiryeong women were obsessed over money and would go to any lengths to get this becoming shallow-minded people.”

“Even if a verdict was made stating that Chairwoman Suh was not linked to the drug dealings, she would still not be able to maintain her position because of all the things she has said in the past,” Kang added.

The drug known as “ice” made in North Korea is sold to Korea, Japan and even Macau through the intermediary of China. The drug “ice” as known to defectors, originated from the Heung Nam Pharmaceutical Company.

Though the going rate for “ice” differs according to quality, 100g of high-quality ice is 12,000 yuan, 9,000~10,000 yuan for standard and 7,000 yuan for low-quality ice.

In accordance with North Korea’s legislation Article 218 amended in April 2004, any person found producing or trading drugs is sentenced to a maximum of 5 years time at the Labor Education Camp. If this act has been repeated on numerous occasions or the drug dealings were large scale, a person could be sentenced to 5~10 years at the Labor Education Camp. If the conditions are even more severe, the law clearly states that a person could then be sentenced to more than 10 years time at the Labor Education Camp or sent to the Labor Education Camp for life.

Korea Herald
3/1/2007

North Korean defectors will be able to obtain court approval to divorce spouses not residing in the South, as a new law came into effect Tuesday.

The Seoul Family Court said yesterday it will expedite legal proceedings for 223 pending divorce cases filed by North Korean refugees living in South Korea.

Existing family law stipulates that an individual seeking divorce must undergo court arbitration with the couple in attendance. The government revised the Protection and Resettlement for North Korean Defectors Act on Jan. 26 to plug the loophole.

A special provision has been added to the law, allowing the court to proceed with divorce cases only if the petitioner proves that his or her spouse is not residing in South Korea.

The South is seeing an increasing number of North Korean defectors fleeing poverty and human rights abuses. More than 10,000 North Koreans have been granted South Korean citizenship as of Feb. 16, the Unification Ministry said.

Since 2003, 232 North Koreans have filed for divorces but only nine cases were heard. One application was accepted and eight were dismissed.

The court suspended decisions for the remaining 223 cases because of the lack of a specific law, the court said.

It is still unclear whether South Korea should recognize marriages registered in North Korea, which the Constitution defines as part of its territory.

According to the revised bill, the plaintiff must submit to the court a letter by the unification minister confirming that his or her spouse is not residing in the South.

The court will post a public notice of the application on its online bulletin board, and can proceed with the case two months later.

Under current law, spouses must be notified of the petition for divorce before any legal proceedings can take place. For defectors, the two-month public notice period will be the equivalent of notification.

In 2004, a court ruled in favor of a 30-year-old female North Korean defector seeking a divorce and parental rights.

Officials at Korea Legal Aid Corp. said that a total of 115 defectors were given support to file petitions in 2005-2006, of which 36 were petitions for divorce.

Among the defectors, a 37-year-old woman identified by her surname Jeon filed for a divorce after running away from home due to domestic violence. Her husband beat her and had extra-marital affairs because she could not have children, she said.

It was difficult for Jeon to start a new life here with another man because of her marital status, the KLAC said.

“The cases can be heard in court only if the plaintiffs are able to obtain authorization from the Unification Ministry that their spouses are not defectors as well,” a judge at the Seoul Family Court said.

“Submitting the documents do not mean they can all get divorced. That is decided by the judges who will make the final decision after hearing the facts of the case.”