Archive for August, 2006

Inter-Korean trade tops US$600 mln until July

Sunday, August 27th, 2006


Trade between South and North Korea in the first seven months of this year topped US$600 millio this year due to increasing trade of agricultural products and corporate products, a local trade promotion agency said Sunday.

The inter-Korean trade reached $668 million in the January-July period, up 14.7 percent from a year earlier, according to the Korea International Trade Association (KITA).

Corporate-related trade, including the trading related to inter-Korean industrial complex in Kaesong, increased 31.9 percent to $489 million worth, while non-corporate trade such as government and private aids fell 15.3 percent to $178.5 million.

South Korea sent $446.6 million worth of goods to the North, down 2.2 percent, from the same period last year while the value of products coming to South Korea reached $263.2 million, up 56.8 percent, the association said.


North Korean Education

Sunday, August 27th, 2006

From the Daily NK:
Yang Jung A

The DailyNK received a North Korean 1st grade elementary school language textbook published in 2005. At present, the North Korea Database Center in Ministry of Unification is only in possession of a textbook published in 2003.

The 1st grade elementary school language textbook is similar to textbooks in South Korea, focusing on reading skills, writing and acquisition of basic vocabulary.

However, if South Korean textbooks utilize examples of daily life so that children may easily comprehend the content, then 80% of the content in North Korean textbooks can be said to be focused on idolizing the leader.

Excluding three classic tales such as ‘The ant and the grasshopper’ and ‘The green frog,’ the storybook uses information about Kim Il Sung and Kim Jong Il idolization to improve reading skills

Also, other related symbolic topics such as Mangyongdae traditional home, Kuho-namu(trees with carving idolization slogan about Kim Il Sung and Kim Jong Il), Triuphal Arch, Battle of Bocheonbo, and Kim Jong Il peak of a mountain are used as materials to develop language skills.

On a page ‘Introduction to Day 1’ are expressions indebting all school life to Kim Il Sung and Kim Jong Il such as “Our respective General Kim Il Sung had visited our school. We were infinitely happy to have our respective general visit our school on the first day.”

In a passage ‘I want to study,’ South Korean children are portrayed as unable to pay school fees and thus are expelled from school. This page teaches North Korean children that South Korean children “know nothing except money in a rotten world, and hate the U.S. and leaders who are blocking their future.”

In particular, irrespective of being a textbook for 1st graders, warlike expressions such as ‘Let’s become the honorific dictator’s heroic army’ and ‘Strike the Americans with kid tanks’ frequently appear in the books.

References to hostility and a glorified military that appear in half the book teaches children that they must become soldiers when they grow older.

Only 7 years old. The truth is North Korean children are taught to become the leader’s gun and bombs since the first day of school unto eternity.


China reduces oil shipment to N.Korea

Saturday, August 26th, 2006

From ABC News:
Burt Herman

China has reduced shipments of crude oil to North Korea, apparently in response to Pyongyang’s missile tests, a news report said Saturday.

China, the communist North’s closest ally and key provider of oil, also has agreed with South Korea to cooperate to prevent a possible North Korean nuclear test.

South Korea’s Chosun Ilbo newspaper said China has reduced “a significant amount” of its oil supplies to Pyongyang since the July 5 missile launches.

The report cited unnamed officials at an oil storage terminal near the Chinese border city of Dandong.

Officials could not be reached for comment Saturday.

There are growing concerns, bolstered by reports of suspicious activity, that Pyongyang may be planning to follow up its missile launches with a nuclear test. Pyongyang claims to have nuclear weapons but hasn’t performed any known test.

Song Min-soon, South Korea’s presidential security adviser, said Saturday that a North Korean nuclear test would be “a grave situation of a different level from missile launches and that South Korea and China have agreed to continue cooperation not to let that situation occur.”

Song, who returned from a two-day trip to Beijing on Friday, refused to elaborate how the two countries would cooperate.

South Korea, China, Japan, Russia and the United States have tried in six-party talks to convince the North to abandon its nuclear program.

South Korea’s seismic authorities said they detected a tremor in North Korea on Friday, but ruled out an underground nuclear test.

Talks on the North’s nuclear program have been stalled since November, when negotiators failed to make headway in implementing the North’s agreement to drop its nuclear program in exchange for aid and security guarantees.

Pyongyang has since refused to attend the six-party talks until Washington stops blacklisting a bank where the North’s regime held accounts, a restriction imposed over alleged counterfeiting and money laundering.


On Searching Hualian Warehouse, a North Korea-China Trade Base in Dandong

Friday, August 25th, 2006

Daily NK
By Shin Joo Hyun

“No changes to trade after the financial sanctions to North Korea” 

In response to North Korea’s illegal trade of currency, the U.S. passed the North Korea sanctions in which China agreed to participate. However, it has been confirmed that little changes have been made to North Korea-China trade.

On 28th July, I went to Dandong, China where North Korea-China trade is most active. It was here that I met a tradesman ‘K’ who said that there has been little change to the amount of goods going from Dandong to Shinuiju. He said that the restraints on trade outlined in the press after the missile launch, is in fact different to reality.

In order to see the amount of trade between North Korea and China for myself, I headed for Hualian warehouse. The size of this warehouse and parking lot is as big as a school playground and numerous cargo trucks were on stand-by to be loaded and shipped.

Goods that pass the route from Dandong to Shinuiju are all contained at this warehouse and then are shipped over the boarder in large cargo containers. It appears that it is a goods warehouse to promote North Korea exports. On the 25th at 3PM, I snuck into the warehouse by a small truck.

On entering the premises ‘K’ who accompanied me to the warehouse did not have to undergo thorough inspection as he was a regular tradesman with North Korea. This location is restricted for foreigners to enter, in particular South Koreans who are unquestionably prohibited from entering the grounds. Undoubtedly photography and collection of data is also prohibited.

While riding the truck we circled the warehouse once and I was able to witness goods busily loaded onto containers. The busiest part of the day is around 1-2PM. At present the height of the day has passed and rather containers sent to Shinuiju customs are visible.

The warehouse seems quiet, maybe because the busiest part of the day has passed. I can see everyday warehouse workers taking orders from drivers and loading goods onto trucks such as sugar, flour and confectionary. On one side are boxes of fans and beer going to North Korea. As always, the majority of goods transported to North Korea is food and clothes.

Amongst the goods, Chinese noodles and clothes with floral prints are most popular. Until recently, the most popular and expensive item was the VCD however it has now become a prohibited import. According to ‘K’ a large warning is written at the entrance of North Korea’s customs house saying ‘Import of VCD’s prohibited.’

‘K’ said “Lately, capitalist ideologies are entering North Korea, hence authorities are trying to destroy republicanism by prohibiting the import of VCD’s. This means we are to watch ‘Bocheonbo Band’ videos made in North Korea, however it’s easier said than done. We are lucky that they have not yet confiscated what we already have.”

To a passing North Korean trade director, ‘K’ asks whether or not a lot of goods were loaded onto containers today. The director replied “There are so many goods that the warehouse is overflowing” and added a snarl remark that “The workers (Chinese staff) are inefficient with their hands” and returned to his truck.

The director had an imposing built body rare for North Koreans. ‘K’ said that although the people of North Korea may be living a hard life, the North Korean people trading here live a relative abundant life. With the image of an imposing director in my mind, I left the warehouse.


Japanese news service opens in Pyongyang

Friday, August 25th, 2006

From the Korea Times:

Kyodo to Open Bureau in North

Kyodo News, a major Japanese news agency, has announced that it is to open a bureau in the North Korean capital of Pyongyang on Sept. 1, the Yonhap News Agency reported Friday.

Kyodo is the second company from countries other than China and Russia, North Korea’s allies, to set up a bureau in the communist state.

APTN, a television arm of the U.S. news wire service the Associated Press, opened one in Pyongyang in May.

“Accurately reporting the actual situation in North Korea for readers in and outside Japan is our mission as a media organization,’’ Kenji Goto, Kyodo’s managing editor, was quoted as saying.

Kyodo said there will be no staff permanently stationed in Pyongyang at the beginning, while the North Korean bureau would be concurrently headed by the chief of its Beijing bureau.

“But when the need arises, reporters will be sent to the North to work from the Pyongyang base, which will have locally recruited staff,’’ it said.

Japan has no diplomatic ties with the North while their talks on normalization have come to a standstill amid disputes over North Korea’s kidnapping of Japanese citizens decades ago.


N. Korea kept millions at Vietnam bank

Thursday, August 24th, 2006

From Kyodo News:

North Korea’s Tanchon Commercial Bank, which has been identified by the United States as the primary financial facilitator of that country’s ballistic missile program, had until recently held dollar and euro accounts at Vietnam’s Military Commercial Bank, a Military Commercial Bank official said recently.

The official said millions of both dollars and euros, respectively, had been deposited in the accounts.

But the funds were hastily transferred to other banks, including a German bank, in July after the State Bank of Vietnam, the country’s central bank, acceded to a U.S. request and began checking on any North Korean accounts involved in suspicious banking transactions.

Tanchon Commercial Bank is among North Korean entities that the United States has since June last year designated as proliferators of missiles and weapons of mass destruction, or their supporters, imposing sanctions aimed at denying them access to the U.S. financial and commercial systems.

The United States is urging other members of the United Nations to identify, track and freeze financial transactions and assets of such North Korean entities as the first step in implementing a binding U.N. Security Council resolution adopted last month.

The unanimous Security Council resolution, which condemned North Korea’s ballistic missile launches in early July, requires all U.N. member nations to prevent the transfer of financial resources that could help North Korea’s missile and WMD programs.       

The U.S. Treasury Department identifies Tanchon Commercial Bank as the main financial agent for North Korea’s sales of conventional arms, ballistic missiles, and goods related to the assembly and manufacture of such weapons, which have provided Pyongyang with a significant portion of its export earnings and financially aided its own weapons development and arms-related purchases.

The Pyongyang-based bank held accounts at Macao’s Banco Delta Asia SARL, which the United States in September 2005 subjected to sanctions as a “primary money laundering concern” that had facilitated a range of North Korean illicit activities.

While it was not clear when the funds were deposited in the North Korean accounts at the Vietnam’s Military Commercial Bank, the bank official said they were transferred from a German bank and from the Bank for Foreign Trade of Vietnam, or Vietcombank.

According to sources, financial intelligence authorities of the United States, South Korea and Japan recently compiled a report on North Korea’s overseas bank accounts that singled out 23 accounts in 10 countries, including Russia, deemed suspicious. Among the total, around 10 were in Vietnamese banks.

U.S. Treasury Undersecretary Stuart Levey, responsible for terrorism and financial intelligence issues, visited Vietnam in mid-July and called for Hanoi’s cooperation in investigating and freezing the suspicious North Korean bank accounts.


Kaesong products covered under ASEAN agreement

Thursday, August 24th, 2006

From the Joong Ang:

Asean agrees to accept Kaesong goods in FTA

Members of the Association of South East Asian Nations agreed to accept South Korea’s request to recognize some products from a North Korean industrial park as South Korean as part of plans for a free trade pact, officials here said yesterday.

Under the agreement, reached yesterday at a meeting of finance officials in Kuala Lumpur, nine out of the 10 Asean member nations will give preferential tariffs on 100 items made in the inter-Korean business complex in the North Korean border city of Kaesong, the Ministry of Foreign Affairs and Trade said in a statement. In May, South Korea and Asean agreed on the liberalization of trade between the two sides by 2010.

“We feel this is an important step in integrating North Korea into the international community and I would like to express my gratitude to Asean,” AFP quoted South Korean Trade Minister Kim Hyun-chong as saying at a press conference in Kuala Lumpur yesterday.

The agreement allows Asean countries to choose 100 Kaesong-made goods each for preferential tariff treatment, the Korean ministry said. Thailand, the Asean member country that stayed out of the agreement in May due to differences over the rice market opening, didn’t sign the agreement, the ministry said.

Still, to finalize the proposed free trade accord, South Korea and Asean have to have open talks on other deals regarding trade and investment.

South Korea is also engaging in talks for a proposed free trade accord with the United States, and the issue of Kaesong has been a key stumbling block.

Seoul demands Washington recognize the Kaesong-made goods as originating from South Korea, as part of its efforts to boost inter-Korean trade and bring a market economy to the communist neighbor.

Washington’s trade officials have been cool about the idea, saying the agreement should only cover goods from South Korea and the United States. 


Vietnam closing DPRK accounts

Thursday, August 24th, 2006

from the Joong Ang Daily:

North funds lose havens in sanctions

Vietnamese banks have closed down North Korean accounts over the past few weeks, most likely forcing Pyongyang to move its money to its last remaining haven, Russia, said Peter Beck, head of the International Crisis Group’s Seoul office, on Tuesday.

Mr. Beck said Nigel Cowie, general manager of North Korea’s Daedong Credit Bank in Pyongyang, e-mailed him last week and said Vietnamese banks have shut down Daedong’s and other North Korea-held accounts.

Daedong expected such a move by Vietnam after U.S. Treasury Undersecretary Stuart Levey visited Hanoi early last month, and had moved its funds elsewhere, Mr. Cowie said in the e-mail. He did not say where the money was moved to, but Mr. Beck said it’s most likely Russia.

“The only financial window [North Koreans] have left now is Russia, I am told,” Mr. Beck said at a roundtable on North Korea hosted by the Mansfield Foundation. Daedong is one of the several North Korean entities accused of shady financial transactions through Macao-based Banco Delta Asia.

The U.S. Treasury in September designated the Macao bank the primary money-laundering concern abetting Pyongyang’s illicit financial activities that it says range from counterfeiting of American currency to drug trafficking, smuggling of contraband and sales of weapons of mass destruction.

North Korea now demands that the United States lift the punitive measures on Banco Delta Asia before it will return to the six-nation nuclear talks. 

From Yonhap:

Vietnam already shut down N.K. accounts in past few weeks: ICG Seoul director

Vietnamese banks have already closed down North Korean accounts over the past few weeks, most likely forcing Pyongyang to move its money to its last remaining haven, Russia, said Peter Beck, head of the International Crisis Group’s Seoul office, on Tuesday.

Beck said Nigel Cowie, general manager of North Korea’s Daedong Credit Bank in Pyongyang, e-mailed him last week and said Vietnamese banks have shut down Daedong’s and other North Korea-held accounts.

Daedong expected such a move by Vietnam after U.S. Treasury Undersecretary Stuart Levey visited Hanoi early last month, and had moved its funds elsewhere, Cowie said in the e-mail.

He did not say where the money was moved to, but Beck said it’s most likely Russia.

“The only financial window they (North Koreans) have left now is Russia, I am told,” Beck said at a roundtable on North Korea hosted by the Mansfield Foundation.

Daedong is one of the several North Korean entities accused of shady financial transactions through Macau-based Banco Delta Asia (BDA).

The U.S. Treasury in September designated BDA the primary money laundering concern abetting Pyongyang’s illicit financial activities that it says range from counterfeiting of American currency to drug trafficking, smuggling of contraband, and sales of weapons of mass destruction.

North Korea now demands that the U.S. lift the punitive measures on the BDA before Pyongyang returns to the six-nation nuclear disarmament talks.

The Treasury’s designation led to a run by BDA clients, and the Macau bank froze US$24 million of funds related to North Korea.

Cowie has said in the past that Daesong’s accounts at BDA were not involved in any illegal activities, that its funds are all from legitimate sources.

“Talking to Cowie and others, he’s led me to conclude that it’s not just $24 million in Macau that North Korea is worried about,” Beck said.

“They are worried that Macau is just one step and means of cracking down on all North Korean financial activities, and Stuart Levey’s visit to Hanoi was clearly designed to further tighten the financial noose and get Vietnam to shut down,” he said.

Vietnamese central bank officials said earlier Tuesday that acting upon Levey’s suggestion, Hanoi has ordered all banks to investigate North Korea-related accounts.


China-DPRK trade Zone II

Wednesday, August 23rd, 2006

Updated from an Earlier Post.

From the Daily NK:

China-N. Korea, Slow Progress in ‘the Tumen River Free Trade Region’ Construction
‘Road-Ports Integrating Plan’ Disappeared… because of Passive Attitude of N. Korea 
Han Young Jin, Reporter

On the 21st, ‘Chizingsbao’, a website related to Chinese investment, reported that the projects to construct ‘the Tumen River Free Trade Region’ and integrate ‘Road-Ports’ have faced problems because of North Korea’s passive attitude.

In the article ‘Slow Progress in N.Korea-China Free Trade Region Construction’, this website illustrated that, “A half year ago, the projects to construct free trade regions for foreign trades in Tomen and integrate “Road-Ports between China and N. Korea” had been hot issues. Yet now nobody talks about them.”

China has ambitiously carried out the project ‘Integrating Road-Ports between China and N. Korea’ that links Najin Port to Hunchun City adjoining three countries North Korea, China and Russia to reinvigorate foreign trades.

In the meanwhile, Tumen City has set up building ‘N. Korea-China Free Trade Regions’ in Rodongja district of Namyang, North Korea.

Cheng Guoli, vice-director of the Department of Temen Commerce, stated that, “We already got an approval to build free trade regions from the government of Jilin. As we know, officials of Onsung district also consented on the free trade region construction and reported to the North Korean government.”

However, he said that, “We have been waiting for a certain action of North Korea, yet until now no progress”.

In the website, Cheng Guoli revealed, “Tumen City will contract the construction of free trade regions to one company,” yet adding “revealing the name of the company is premature”.

Hunchun City also is in the same situation. Donglim Public Economic Trade Corporation promoting the project ‘Road-Ports between China and N. Korea’ revealed that, “We have prepared the construction of the integration, yet North Korea has not taken any actions for that.”

Donglim Public Economic Trade Corporation that was entrusted with the ‘Road-Ports between China and N. Korea’ made a contract with Nasun People’s committee, North Korea last July, and Bosae Public Incorporated Corporation of Hunchun Economic frontier also jointed the construct.

Donglim Public Economic Trade Corporation had set up the Huchun-Najin road construction under the collaboration with Design Center of Hunan University. It was to build a second rank road at 48km in length, yet North Korea did not even start on the construction yet.


Number of N. Koreans defecting to S. Korea increases nearly 60 percent

Wednesday, August 23rd, 2006

Byun Duk-kun

The number of North Korean defectors coming to South Korea increased by nearly 60 percent in the first seven months of this year compared to the same period of last year, the Unification Ministry said Wednesday.

A total of 1,054 North Koreans have come to the country as of the end of July, up 59 percent from a year ago, the ministry said in a report. Apparently hundreds more are waiting to find their way here, it said.

Earlier reports said a group of 175 North Koreans were rounded up by Thai police on suspicion of illegal immigration Tuesday, only hours before they were to board a passenger jet flying to South Korea.

The chief of the Thai police’s immigration bureau, Lt. Gen. Suwat Tumrongsiskul, was quoted as saying the North Koreans would be prosecuted, but would be detained “on a humanitarian basis” until they leave the country since they are seeking refuge in third countries.

The number of North Koreans coming to the South has steadily increased since the late 1990s with more than 100 finding their way here in 1999 for the first time since the end of 1950-53 Korean War.

The number increased to 1,139, breaking the 1,000 mark for the first time, in 2002, and rose to 1,281 in 2003 and 1,894 a year later.

International relief agencies, however, believe as many as 100,000 North Koreans may still be hiding in other countries, mostly in China, while civic organizations working to help the North Koreans put the number at 300,000 in China alone.

With no relatives or jobs in China, most of the North Korean defectors live in extreme destitution, usually making a living by begging. The Chinese government refuses to recognize them as refugees and regularly rounds them up and sends them back to their communist homeland where they are reportedly tortured, prosecuted and often executed.

The South Korean government says it will accept any North Koreans coming to the country, but cannot encourage or support their defection because of its relations with the North, as well as with other countries, which are used as stopovers for North Korean defectors.

Beijing is bound by a written agreement with Pyongyang to repatriate any North Koreans in its custody, according to government officials.

North and South Korea remain divided along a heavily-fortified border since the fratricidal Korean War (1950-53).

Defection through the inter-Korean border is not unprecedented, but is nearly impossible with nearly 70 percent of some 1.8 million troops on both sides standing guard within a radius of a few kilometers from the border.

Relations between the divided Koreas significantly warmed up following a historic meeting of their leaders in the North Korean capital in 2000.

The two, however, still remain technically in a state of war as the Korean War ended with an armistice agreement, not a peace treaty.