Kaesong Complex outlet opens in Seoul

July 4th, 2015

According to the Joong Ang Ilbo:

Despite the fact that personal exchanges between North and South Koreans are rare, products made by North Korean laborers can easily be found here in the capital area.

Kaesong Joint Industrial Complex Cooperatives, which sells men’s clothing and textiles produced at industrial facilities in the North, opened a branch June 17 in Jongno District, central Seoul, with donations from 12 companies, at the inter-Korean venture park.

The joint industrial complex was established in 2004 in Kaesong, the most southern city in North Korea. Currently, 124 companies from South Korea run operations there, with 60 percent related to textiles.

The entrance to the new store is designed to appear like a rail road stop, with a sign to its right reading: “To the world, along the rail road.”

“It shows our dream to reach Europe by train with our products after unification,” said Lee Jong-deok, the store’s deputy chief director.

Products from the joint industrial complex can already be found in other stores in South Korea; however, the 12 companies reportedly decided to run their own shop in an attempt to dispel negative public opinions surrounding the industrial complex, the last remaining symbol of inter-Korean cooperation.

“We designed the inside of the store with light white colors to do away with this unfavorable image around Kaesong,” said Je Jeong-oh, the operations director.

According to Je, the industrial complex is the only place where both Koreas can truly cooperate with each other, and despite the wage issue, the employees from the South and North employees are hospitable toward one another.

The store sells products without retail margin, with prices much cheaper than market value. A coat made of 100 percent cashmere, for instance, can be purchased for 299,000 won ($267) in the store.

When the JoongAng Ilbo inquired about a similar product at a department store, an employee there answered that the asking price would be at least 700,000 won.

“The quality of the fabrics is good, and most of all, the needlework on the products is perfect,” said one shopper, Sin Mi-yeong, 61. “I’m surprised by how low the prices are here.”

Unification Minister Hong Yong-pyo visited the store on opening day and reportedly purchased some clothing.

“I see it as a place where visitors can physically experience a sense of unification,” he said at the time.

And even with its fledgling status, the store already has regulars. Choe Beom-jin, who runs a supermarket next to the shop, remarked that he would only buy his clothes there from now on.

Meanwhile, the store’s management board has ambitious plans for its line: Products labeled with the store’s name will be on display during Hong Kong Fashion Week, which will run from Monday to Thursday.

Seven more branches are also set to open nationwide by year’s end.

“It takes 90 minutes by car to reach Kaesong from Seoul,” Je said. “It’s just sad we can’t make the trip, even if we wanted to. I hope the store serves as a starting point to unification.”

Read the full story here:
Kaesong items prove a hit in Seoul
Joong Ang Ilbo
Chun Su-jin
2015-7-4

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UK publishes an updated list of sanctioned DPRK individuals/entities

July 4th, 2015

You can see the list here (PDF). I have added this to my DPRK economic statistics page.

There is no similar list (as best I can tell) published by the US government (Please correct me if I am wrong). But links to tools created by the different offices in the US government can be found on my DPRK economic statistics page. I suspect a little research on with tools could be used to produce such a list. The closest I have seen to a complete list is here (PDF).

UPDATE: Josh Stanton offers this link.

NK News reports that the European Commission also tightened sanctions on the DPRK.

See Josh Stanton’s summary here.

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North Korean company advertisements appear in World Cup preliminary match

July 3rd, 2015

Institute for Far Eastern Studies (IFES)
2015-7-3

North Korea has attracted attention after it recently featured a number of corporate advertisements in a preliminary match of the 2018 Russian World Cup.

In the past, North Korea rejected everything related to capitalism. But since Kim Jong Un’s rise to power it appears to be actively using sports and commercial capital in order to attract foreign capital as its market economy rapidly expands.

On June 16, 2015 Korean Central Television (KCTV) broadcast the second match of the Russian World Cup Asian qualifying rounds. The match, in which North Korea and Uzbekistan played, was held at Pyongyang’s Kim Il Sung Stadium, where advertisements by North Korean companies such as Kaesong Koryo Ginseng and the Pyongyang Building Materials Factory appeared in force. Kaesong Koryo Ginseng and Choson Kumgang Group in particular appeared to have spent a lot of money sponsoring the event, as every most ads belonged to one of these companies. Conspicuous among the advertisements were those from companies that have not been well-known in the outside world, such as Malgun Achim (literally ‘clear morning’), a manufacturing company known in North Korea for producing IT products such as computers. Exhibiting numerous ads for North Korean companies at an international sports event and broadcasting the event on TV to the world is rather unprecedented behavior for North Korea.

When the 27th Mangyongdae Prize International Marathon was held in Pyongyang in 2014, not only were there no ads for North Korean companies, but there were no ads for foreign companies either. As a result British contestant Will Phillips, who qualified to participate in the marathon as a foreign amateur athlete, remarked at the time, “It feels like time just stopped in the ‘60s.” However, an article appeared in the January 2015 edition of the Kim Il Sung University Bulletin that emphasized the importance of advertisements in attracting investment and gave specific instructions to heed the publication times of major foreign newspapers and even pay attention to broadcast ratings. Since then North Korea has paid attention to foreign advertisements and has really upped its efforts to attract foreign currency.

As the market economy spreads rapidly in the Kim Jong Un era, this event is viewed as a sign of change in North Korea’s foreign economic policy. The promotion of North Korean companies in a preliminary round of the World Cup, which relatively many foreigners can view, is interpreted as an attempt to ultimately attract foreign capital. At the same time, it appears there is a dimension of inducing competition between North Korean companies to boost domestic demand. This event can also be connected to one of the characteristics of the Kim Jong Un regime, which emphasizes and encourages physical education throughout the state. Such a scene, which seamlessly joins sports with commercial capitalism, is unprecedented for North Korea.

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North Korean workers in the Middle East

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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Kim Jong Un visits Automation Institute of Kim Chaek University of Technology

July 2nd, 2015

Automation-Institute-Kimchaek-KCNA

Automation-institute-Google-Earth

Top: Official KCNA photo of the new Automation Institute of Kim Chaek University of Technology Bottom: Google Earth satellite image of the facility in the new Mirae Scientist Street

According to Google Earth imagery, construction on the project started around September 2014.

According to KCNA:

Kim Jong Un Gives Field Guidance to Automation Institute of Kim Chaek University of Technology

Kim Jong Un, first secretary of the Workers’ Party of Korea, first chairman of the DPRK National Defence Commission and supreme commander of the Korean People’s Army, gave field guidance to a newly-built building of the Automation Institute of Kim Chaek University of Technology.

He was greeted on the spot by Hwang Pyong So, Kim Jong Gwan, other officials of the relevant field and officers of the KPA units taking part in the construction.

He had promised to make sure that a new building was constructed for the Automation Institute when he was acquainting himself with the work of the institute in April last year.

He chose the site of the institute on the picturesque bank of the River Taedong and guided its layout several times. He not only saw to it that a powerful construction force of the People’s Army was formed for the project but personally settled the issues arising in it.

Enjoying a bird’s-eye view of the institute, he said the institute was successfully built to match the environment around it as required by the layout ratified by the party.

He went round several places of the institute to learn about its construction in detail.

He was pleased that the institute was built in such a way as to visually showcase the party’s policies of attaching importance to science and technology and talents and provide its researchers with ample conditions for their scientific researches and living.

He told officials to fully provide the institute with reading rooms, e-library and video system so that they might help the researchers in their work and study.

Noting that a country can prosper only when a revolution is carried out with a proper view and stand on science and talents, he underscored the need to provide the institute with modern equipment and vehicles necessary for its operation as it was built into a cutting-edge scientific research center. He was so kind as to promise to ensure that this matter would be settled by the party.

He highly praised the soldier builders of KPA units 407 and 101 for fully displaying the revolutionary soldier spirit in the construction of the institute.

He expressed belief that the researchers of the institute would creditably perform their mission and duty as standard-bearers in breaking through the cutting-edge science and technology by carrying forward the tradition in which they have contributed to the cause of the party with their valuable scientific and technological achievements and thus give fuller play to their patriotic enthusiasm and devotion to living up to the expectations of the party, the country and its people.

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Rason serves as Hunchun port (again)

July 2nd, 2015

Back in 2011, an experimental project saw the shipment of coal from Hunchun (China) to Shanghia via the North Korean port of Rason. Since then, no such effort is known to have been repeated.

Until now, apparently…

According to UPI:

A maritime route that includes the North Korean port of Rajin has enabled Chinese shippers to significantly reduce costs over a more time-consuming land route, South Korean news agency Yonhap reported.

Chinese cargo from the northeastern city of Hunchun has made the journey to bustling Shanghai twice in June, according to Chinese authorities.

Hunchun officials said 38 containers that left the city on June 24 arrived in Shanghai on June 27, and on June 11, 42 containers were delivered to China’s eastern coast – all using Rajin as a key point where cargo could be loaded onto ships.

I have not been able to locate any additional information.

Read the full story here:
China, North Korea cooperate on Rajin shipping route
UPI
Elizabeth Shim
2015-7-2

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Humanitarian aid to DPRK almost flat on-year in H1 2015

July 1st, 2015

According to Yonhap:

The growth of humanitarian aid sent to North Korea stayed almost flat in the first half from a year earlier, a U.N. agency said Wednesday, raising concerns about food shortages in the North.

The global community’s humanitarian assistance to the North amounted to a combined US$21.3 million in the January-June period, compared to $20.6 million in the same period last year, according to data compiled by the United Nations Office for the Coordination of Humanitarian Affairs.

But the figure in the first half marked a 40 percent decline when compared to $35.6 million in the first half of 2013, it showed.

The U.N. and six countries — South Korea, Switzerland, Sweden, Canada, France and Germany — supplied humanitarian aid to Pyongyang this year.

Switzerland was the top donor with $9.17 million, or 43 percent of the total aid, followed by South Korea with $4 million and Sweden with $3.23 million, the data showed.

By type, food and nutrition aid topped the list with $9.64 million worth contributed, followed by healthcare work at $6.2 million, and the supply of drinking water at $2.4 million, it said.

A separate U.N. report showed that about 70 percent of North Korea’s 24.6 million people are suffering due to food shortages and 1.8 million, including children and pregnant women, are in need of nutritional food supplies aimed at fighting malnutrition.

Aid from China and Russia would not appear in this study.

Read the full story here:
Humanitarian aid to N. Korea almost flat on-year in H1
Yonhap
2015-7-1

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KoryoLink drops subscription fees

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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Wonsan City seeing new construction area

June 30th, 2015

Kalma-street-construction

Pictured above (Google Earth): Site of the new Kalma Street construction site in Wonsan

According to KCNA (2015-5-20):

Ground-breaking Ceremony of Construction in Wonsan Area Held

Wonsan, May 20 (KCNA) — The Wonsan area will turn into a world-famous tourist city under the plan of the Workers’ Party of Korea (WPK).

A ground-breaking ceremony took place in Kalma Street on Wednesday.

Present there were Vice-Premier Kim Yong Jin, officials concerned, builders and citizens of Wonsan.

A reporter and speakers said it was the lifetime wishes and behests of President Kim Il Sung and leader Kim Jong Il to spruce up Wonsan area.

Marshal Kim Jong Un launched a big operation for building Wonsan area into a world famous tourist city, model of city formation, with noble intention to bring about a fresh turn in building a highly civilized socialist nation and dynamically aroused the whole party and country to the drive for doing so, they said.

They called for launching vigorous campaigns to carry out the behests of Kim Il Sung and Kim Jong Il and defending the party’s policies to powerfully demonstrate the might of Songun Korea in construction once again.

At the end of the ceremony they started projects including dwelling houses at the entrance of Kalma Street in Wonsan City.

Here is coverage by the Institute for Far Eastern Studies (IFES):

Wonsan: Start of Construction as ‘Global Tourist City’

The state-run Korean Central News Agency (KCNA) has reported that the groundbreaking ceremony for the Wonsan region took place on May 20, 2015 on Wonsan city’s Kalma Street.

The KCNA explained that “in accordance with the plans of the Korean Workers’ Party, the Wonsan region will be vigorously transformed into a global tourist city.” It also reported that Vice Premier of the Cabinet Kim Yong Jin was in attendance at the groundbreaking ceremony.

According to attendees at the ceremony, “The proper management of the Wonsan region is the will of Comrade Kim Il Sung and Comrade Kim Jong Il as well as their earnest dying injunction.” They also stressed that “Comrade Kim Jong Un is committed to bringing about a new change in the construction of a civilized socialist state and has unfolded a magnanimous strategy for managing the Wonsan region as a model of city development and global tourist cities.”

The KCNA reported that after the ceremony ended construction was started on private homes near the entrance to Kalma Street.

The ‘Wonsan-Kumgangsan Tourist Region’ was announced as a central-level Special Economic Zone (SEZ) on June 11, 2014 by way of an ordinance by the Standing Committee of the Supreme People’s Assembly (SPA). It is part of the large-scale tourism belt that includes Wonsan district, the Masikryong Ski Resort, Ullim Falls, and the Sogwansa, Tongchon, and Kumgangsan districts.

The KCNA confirmed that the Wonsan development was the “will” and “dying injunction” of Kim Il Sung and Kim Jong Il, offering as evidence the fact that Kim Jong Il made the development of the Wonsan-Kumgangsan Tourist Region a recent priority of North Korea’s foreign economic sector.

In his 2015 New Year’s address, Kim Jong Un proclaimed to the people, “We need to multilaterally develop foreign economic relations and actively push forward the development of economic development zones like the Wonsan-Kumgangsan Tourist Region.” Also, in February 2015, the Workers’ Party of Korea (WPK) Central Committee and Central Military Commission presented ‘joint slogans’ for the 70th year anniversary of the country’s liberation and the Party’s founding. Among those presented was the slogan, “Let’s actively push forward the economic development of the Wonsan-Kumgangsan Tourist Region!”

In May 2015, North Korea took the ‘18th Pyongyang Spring International Product Exhibition’ as an opportunity to hold an investment briefing session regarding the development of the Wonsan-Kumgangsan Tourist Region. Another on-site investment briefing at Kumgangsan is slated for six days beginning May 25, 2015.

Regarding the upcoming briefing, O Ung Gil, general manager of the Wonsan Area Development Corporation, said, “At the investment briefing, topics such as the favorability of the development zone (which has abundant tourist attractions), the legal environment, its current state, and the overall development plan will be revealed. […] All entrepreneurs and businessmen who have an interest in development in the region are welcome to attend.”

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US group seeks to seize Mudu-bong

June 30th, 2015

According to the Jerusalem Post:

Shurat Hadin – Israel Law Center on Tuesday requested that Mexico permit it to seize an impounded North Korean ship to satisfy a $330 million it won against Pyongyang in April in a US civil damages trial for wrongful killing of a Christian priest.

Mexico impounded the 6,700-ton Mu Du Bong for illegal weapons smuggling on its way from Cuba to North Korea following notification by UN sanctions monitors that the ship belonged to a blacklisted firm. The ship ended up accidentally landing on the Mexican coast and North Korea has protested Mexico’s continuing to hold on to the ship.

The Tel Aviv-based NGO hired Mexican lawyer Alberto Mansur to request that Mexico honor and enforce the US court ruling as part of its obligations to honor foreign judgments under the Hague Convention.The April judgment, which also included findings by a US federal court in Washington that North Korea had kidnapped, tortured and killed South Korean-American Rev. Kim Dong Shik, included $15m. each to Shik’s son and brother as well as $300m. in punitive damages.

Dong Shik, a South Korean who was a permanent resident of the US and had spent seven years providing aid and proselytizing to North Korean defectors who tried to escape via China, was abducted in China in 2000. In 2005, a South Korean court convicted an ethnic Korean of his abduction in concert with North Korean intelligence.

Shurat Hadin said that it hoped that the context of the requested seizure, the North Korean outlaw regime ignoring weapons smuggling laws and flouting UN resolutions, would help its case since it tied into Pyongyang’s massive human rights violations in abducting and murdering innocent persons, which was at the heart of the Dong Shik judgment.

The judgment was a default judgment in which the defendant, North Korea, did not even appear at trial, leading most to predict that it would go unenforced since default judgments are notoriously hard to collect on, especially with a regime such as North Korea, which has few connections to the West.

After the April judgment, Shurat Hadin said the family was investigating all the possible avenues to collect the judgment against North Korean assets including seizing bank accounts, property and shares in foreign companies in the United States and abroad.

But even Shurat Hadin admitted that Mexico’s seizure of the ship was a shocking gift and unexpected opportunity to collect on the judgment. The NGO’s President Nitsana Darshan- Leitner said that “North Korea should know that we are actively tracking its assets and looking to seize them everywhere in the world. This outlaw regime must be taught that it cannot abduct and murder foreign citizens and that eventually there will be a price to pay.”

“There is no reason why this boat which clearly belongs to North Korea cannot be used to satisfy our judgment,” she said.

In the April judgment against North Korea, the court said that the two $15m.

and the $300m. damages awards were consistent with comparable cases against North Korea and Iran for other similar wrongful actions and recognized the tremendous suffering by Dong Shik’s family members.

In December 2014, Shurat Hadin convinced a US federal appeals court to grant default judgment against North Korea on liability, paving the way for April’s massive damages award by the lower district court.

The ruling by the US Appeals Court for the District of Columbia, written by Judge David S. Tatel, reversed an earlier district court ruling that had dismissed the case, despite North Korea failing to defend itself, on the grounds that the plaintiffs had failed to present any direct evidence of what happened to Dong Shik.

The appeals court based its ruling on proof that Pyongyang kidnapped Dong Shik, a wealth of information about it torturing and killing prisoners, its systematic attempts to block direct evidence from emerging and its failure to counter the plaintiffs’ claims.

The ruling was also significant because it allowed a case to go forward based on the “terrorism exception” to the US Foreign Sovereign Immunities Act, which somewhat broadens the paths and precedents open to suing foreign nations for terrorist acts.

Read the full story here:
NGO seeks to seize N. Korean ship to pay off $330 m. US judgment for killing of priest
Jerusalem Post
Yonah Jeremy Bob
2015-6-30

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