Japan « North Korean Economy Watch

Archive for the ‘Japan’ Category

Australia, Japan roll out curbs on Pyongyang

Tuesday, September 19th, 2006

Joong Ang Daily
Ser Myo-ja, Lee Sang-il
9/20/2006

Japan and Australia yesterday announced new sanctions against North Korea in another sign of increased financial pressure on the communist state, which has declared it possesses nuclear arms.

The announced purpose of the sanctions was to push Pyongyang back to six-party talks in Beijing to disarm the country in return for diplomatic recognition and financial aid.

In Washington, U.S. officials also signaled that additional sanctions against the North may be in store.

In Tokyo, the cabinet approved a partial freeze on North Korean assets in Japan, imposing restrictions on 15 North Korean agencies or companies and one individual.

“This shows the resolve of the international community and Japan,” said Shinzo Abe, the chief cabinet secretary and heir-apparent to Prime Minister Junichiro Koizumi.

The restrictions on financial transactions were directed, Tokyo said, at figures related to North Korea’s missile and nuclear programs.

After North Korea test-launched a barrage of missiles in early July, Tokyo barred the entry of a North Korean ship to its ports for six months and forbade the entry of North Korean government officials into Japan.

Australia, one of the few Western countries that had diplomatic relations with North Korea, acted the same day, imposing similar bans on financial transactions by people and companies it said were involved in North Korean arms programs.

Foreign Minister Alexander Downer told the press, “This supports and complements similar action taken by Japan today and previous actions taken by the United States, and sends a strong message to North Korea.”

In Washington, a State Department official told Korean journalists in a background briefing that the United States might reimpose sanctions lifted after an accord in 1994, which temporarily reduced tensions over the North’s nuclear programs. He said a proposal to restore the sanctions existing before 1994 was being studied. The relaxation was modest; U.S. companies were allowed to offer telephone service to North Korea and import some raw materials.

In Seoul, Song Min-soon, the Blue House senior security advisor, reacted cautiously to the announcements, saying it would be “inappropriate” to comment on sanctions imposed by other governments. He said the matter was one for capitals to decide, based on a United Nations Security Council resolution critical of North Korea’s missile and nuclear programs and those nations’ own laws.

Separately, Beijing rebuffed a U.S. invitation to a meeting Thursday of financial ministers in New York to discuss North Korea.

From the BBC:
New sanctions target North Korea

Japan and Australia have announced new financial sanctions against North Korea, stepping up pressure on the secretive state over missile tests.

The sanctions will freeze the transfer of money to North Korea by groups suspected of having links to its nuclear or missile programmes.

The move, which follows similar action by the US, comes after Pyongyang launched several missiles in July.

South Korea has urged other countries not to push the North into a corner.

The South is worried that the North may retaliate by carrying out a nuclear test, which would destroy any remaining hope of a diplomatic solution to the stand-off.

Japanese government spokesman Shinzo Abe said the new sanctions were in line with a United Nations resolution which denounced the missile tests.

The Japanese measures affect 15 groups and one individual, and will come into effect later on Tuesday, according to Japanese media.

The Australian measures applied to 12 companies and one person, according to Foreign Minister Alexander Downer, who said the sanctions were “consistent with our strong international stand against the proliferation of weapons of mass destruction.”

Media reports said the two lists were almost identical.

Tough stance

North Korea’s decision to test-fire seven missiles in July – including a long-range Taepodong-2 which is believed to be capable of reaching Alaska – angered the international community.

A UN resolution demanded that North Korea suspend its ballistic missile programme, and barred all UN member states from supplying North Korea with material related to missiles or weapons of mass destruction.

In the immediate aftermath, Japan imposed limited sanctions, including a decision to ban a North Korean trade ferry from Japanese ports and a moratorium on charter flights from Pyongyang.

The new measures also called for closer scrutiny of those wanting to send money or transfer financial assets to North Korea.

“By taking these measures, we have demonstrated the resolve of the international community and Japan,” said Chief Cabinet Secretary Shinzo Abe.

“I do not know how North Korea will respond, but I hope North Korea will accept the UN Security Council resolution in a sincere manner.”

The BBC correspondent in Tokyo, Chris Hogg, says there is still some doubt about how effective these sanctions will be.

Although Japan looks to be clamping down on North Korea, other countries that exert a strong influence on the country – notably China and South Korea – are reluctant to impose similar measures.

Following the Japanese announcement, China restated its opposition to sanctions and called for further dialogue.

Nuclear fears

In addition to fears over North Korea’s missile programmes, the international community is also worried about its nuclear intentions.

The United States, China, Japan, Russia and South Korea have repeatedly tried to persuade the North to abandon its nuclear programme.

But the so-called six-party talks have been on hold since November 2005, because North Korea refuses to attend until Washington lifted economic restrictions against it.

Exactly a year ago, North Korea agreed in principle to give up its nuclear weapons programme in return for economic help and security guarantees.

The move was greeted by surprise and relief, but a joint statement issued at the time failed to bridge the wide gulf between North Korea and the US. One year on, the North remains as isolated as ever.

The region remains on alert in case Pyongyang decides to follow up on the July ballistic missile tests with a nuclear test.

Analysts say the North has enough plutonium for several bombs, but has yet to prove it can build a reliable weapon.

Posted in Australia, Banking, Chongryun, Fiscal & monetary policy, USA | Comments Closed

DPRK exports to Japan halved amid economic sanctions

Wednesday, August 30th, 2006

From Yonhap:
8/30/2006

North Korean exports to Japan dropped by nearly 50 percent last month from June amid Tokyo’s economic sanctions against the communist state for its test-firing of missiles early last month, a report by Japan’s Finance Ministry released on Wednesday showed.

The total amount of North Korea’s exports to Japan last month dropped to some 440 million yen (US$3.75 million), a 44.2 percent decrease from that of June, the report said. The amount is also down 42.2 percent from that of the same period in 2005.

The report failed to provide specific reasons for the drop, but observers believed it was mainly due to the country’s economic sanctions against the impoverished North, which followed Pyongyang’s test-firing of seven ballistic missiles on July 5.

The observers also said trade between the two is likely to further shrink amid Tokyo’s strong reaction to North Korea’s missile tests and the communist state’s alleged preparations to test a nuclear bomb.

The United Nations Security Council unanimously adopted a resolution on July 15, condemning the North Korean missile tests and prohibiting any missile-related dealings with the North. But Tokyo has been taking additional steps to cut off any cash inflow to North Korea from its country.

The country has banned a major North Korean ferry, Mankyongbong-ho, from its ports at least for the next six months, cutting off the largest and almost the only direct means of transportation between the two for North Koreans and some 200,000 pro-Pyongyang Korean residents in Japan.

Posted in Chongryun, International trade, Japan, Trade Statistics | Comments Closed

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.

Posted in Communications, Japan | Comments Closed

North Korea to accept UN food aid

Friday, August 18th, 2006

BBC
8/18/2006

The UN food agency says North Korea has agreed to accept emergency food aid in the wake of heavy flooding in July.

The decision is a reversal for Pyongyang, which said previously that it did not need international help and could manage by itself.

North Korea was hit by torrential rains and high winds last month.

Official media said the severe weather killed hundreds of people and left thousands homeless, as well as damaging large tracts of agricultural land.

The World Food Programme (WFP) said in a statement that it would supply 150 metric tons of food to feed 13,000 residents in South Phyongan province, 80km (50 miles) east of the capital.

North Korea also agreed on Thursday to send its Red Cross officials to meet counterparts in South Korea on Saturday to discuss food and reconstruction aid.

The moves come amid differing reports on the scale of the flood damage in the North.

North Korean news agency KCNA said that “hundreds” died, while a pro-Pyongyang Japan-based daily put the toll at 549.

One activist group in Seoul has suggested the number of casualties is well into the thousands, but aid officials have played this down.

North Korea is secretive about releasing details of accidents or natural disasters, making any confirmation of the extent of the flooding difficult.

But Pyongyang has cancelled a mass gymnastics display, called Arirang, which is a key source of income for the nation, to focus, it says, on recovering from the floods.

North Korea is already reliant on foreign donations to feed its people.

The WFP began working in the country in the mid 1990s, after about two million people died from famine.

Posted in Agriculture, Chongryun, International Aid, International/Korean Red Cross, UN World Food Program | Comments Closed

North Korean cigarettes-big news day

Thursday, August 17th, 2006

Well the notion that the DPRK has been counterfitting cigarettes to raise hard currency has had a big day in the press. I saw stories alone.

From Yonahp:

Fake cigarettes are major source of income for N. Korea: report

North Korea is believed to earn between US$500 million and $700 million a year by making and selling fake U.S. and Japanese cigarettes, a U.S. radio station reported Wednesday, quoting a former U.S. official.

“Counterfeit tobaccos are one of the largest, probably the largest single source of income for the North Korean regime,” David Asher said in an interview with the Washington-based Radio Free Asia.

Asher, who until July 2005 had served under former Assistant Secretary of State for East Asia and Pacific Affairs James Kelly, said the North’s communist regime operates as many as 10 plants to make fake U.S. and Japanese cigarettes.

Those plants are scattered throughout North Korea, including its capital, Pyongyang, and its eastern industrial zone, Rajin, he said.

The counterfeit cigarettes, Asher said, are usually packed and sent in containers to China and then to other Asian countries for sale.

“They need to start inspecting containers more aggressively,” he told the radio station, referring to a recent decision by Japan to block the North’s massive scheme to make counterfeit cigarettes.

Tokyo has recently ordered investigation into North Korean-made fake Japanese cigarettes reportedly circulated in China, according to Japanese media reports.

The amount of North Korean-made fake U.S. and Japanese cigarettes is estimated at about 2 billion packs a year, they said.

Asher claimed in an earlier report that as much as 40 percent of North Korea’s total earnings is believed to come from illegal activities such as counterfeiting, drug trafficking and weapons smuggling.

From the Daily NK (for the Japanese perspective):

‘Fake Cigarettes’ Japan Investigation on North Korean Authorities
North Korea reels in an annual income of $80mn~$160mn through counterfeit cigarettes
By Yang Jung A, Reporter

At the Prime Minister’s residence last August 14th, Japan’s Deputy Chief Cabinet Secretary Suzuki Seiji who heads the ‘Special Investigation Team on Japanese abductees to North Korea’ initiated an official investigation on North Korean Authorities to combat the issue of counterfeit cigarettes.

A Japanese Newspaper ‘Mainichi’ (Daily News) reported that North Korea had been shipping large scale counterfeits of Japan’s leading cigarette brand ‘Mild Seven’ throughout China and South-East Asia in order to produce greater foreign currency.

The investigation by the ‘Special Investigation Team’ will focus on cracking whether or not North Korean authorities partook in the trafficking. On release of results, explicit countermeasures will be taken by the police, financial affairs, agriculture and fisheries and other ministries.

Last July 31st, Vice Minister Suzuki said at a ‘Special Investigation Team’ meeting that “There is a high possibility that North Korea is distributing ‘counterfeit cigarettes’ to foreign countries” and that severe measures will be taken.

The Japanese government argues that the flow of illegal foreign currency made through sales from fake cigarettes needs to be stopped if not at least for the persecution occurring in North Korea, and for the past few months has been pressurizing governments to take action.

A Japanese tobacco industry announced that masses of fake Mild Seven cigarettes were known to be circulating throughout China, North Korea and districts around the boarder. However, there is not yet confirmation that fake cigarettes are circulating in Japan.

Last May, the Japanese Maritime Bureau confirmed that a foreign vessel was found to be transporting fake Japanese cigarettes made in North Korea to South Korea and Taiwan. According to an U.S. press report the amount of fake cigarettes manufactured in North Korea and smuggled out of the country reaches $80-160 mn every year.

Posted in Counterfeiting, Japan, Tobacco, USA | Comments Closed

DPRK citizens listening to KBS

Monday, August 14th, 2006

From the Daily NK:

Pyongyang Residents Secretly Watch KBS 9pm News
“On the Second-Hand TVs Imported from Japan”
By Kwon Jeong Hyun, Dandong of China
8/14/2006

It was found that Pyongyang residents in North Korea have secretly watched KBS 1 TV on high-fidelity receivers smuggled from China and TVs made in Japan.

The North Korean government has prohibited the North Korean people from watching South Korean TV programs. In order to prevent TV or radio waves from South Korea, it has done blanketing. Yet, it has been know that such control have not prevent the North Korean people from secretly watching KBS 1TV programs including 9pm News, and rather such trend has been spreading all over Pyongyang.

On the 30th last month, Kim Jin Ho(pseudonym, 42) staying in China to see his relatives said that, “Receivers smuggled through trucks from China are sold at 120 to 150 yuans (45,000 to 56,000 won of North Korea)at Jangmadangs “, adding “Quiet many people watch South Korean TV programs in Pyongyang”.

Kim told that, “Because of control of the government, people can not see soap dramas. They just usually watch 9pm news to know the trends of the world”, and “Family members and friends talk about them together”.

Kim said that receivers to receive the South Korean TV programs are 3m high and have two-edged looked like bones of fish. Kim said he is watching through the receivers only at night. The receivers are called ‘yagi receiver’, which are usually used as territory receivers. Given that the yagi receivers that have been used in the 70’s and 80’s are impossible for satellite broadcasting, people have received KBS program waves over the truce line.

Park Gi Chang(pseudonym, 34) from Pyongsung, South Pyongan province, said that, “Now if one does not know the trends of the outside world, he or she can not join the conversation” and “We can know about what the North Korean government did”. However, Park said that because of the strict control of the government, we have to be careful.”

Park said that, “I have watched KBS programs on a receiver purchased at Jangmadang after I saw my relatives seeing the programs in Pyongyang.”

Because North Korean TV standard is PAL(Phase Alternating Line) different from NTSC(National Television System Committee), we can not still see the South Korean program on the North Korean TVs. Seeing South Korean programs is possible only on the TVs made in Japan and China. Japanese TV standard is NTSC.

In addition, recently it was known that PAL and NTSC TVs are imported from China and Japan.

North Korean has imported TVs made in Hitachi, Japan since the 80’s in bulk. Some second-hand TVs had often been imported into North Korean, which were replaced by receivers only for North Korea.

A staff in charge of KBS broadcasting transmission said that, “No-person head end or transmission tops around the truce line area send electronic waves, which are possible to reach at Pyongyang”, and “it is surprising that we do not send electronic waves toward North Korea. But Pyongyang residents have received them”.

A researcher at a electronic waves research center under the Ministry of Information and Communication stated that, “Generally, waves sent towards Seoul reach at Cheonan or even Dangjin, the nearly southernmost part of S.Korea”, and “given the nature of waves, North Korea can not prevent the waves from South Korea”.

Kim Gi Hyuk, defector Producer of Free North Korea Broadcasting, said that, “I can remember that in Hoicheon, South Pyongan province, I watched a news announcing that Hwang Jang Yop came to South Korean as a political asylum, and saw a South Korean car advertisement through the receiver”, and “on the rainy day, the waves were better caught in the receivers”.

A staff of VideoLap, a video specialized company, said that, “If TVs’ standard is PAL, screens turn into black so we can not totally watch programs. However, sometimes the TVs work well”.

A government official briefly mentioned, “I heard that some North Korean people watch South Korean TV programs”.

The North Korean people have gotten world news on the broadcastings such as RFA or Korean Social education broadcasting. Furthermore, VCD and TV programs have been spreading. It has made the North Korean people free from informational isolation of the past.

Posted in Japan, Radio, South Korea, Television | Comments Closed

Isolated North Korea pulling back even more

Tuesday, August 1st, 2006

Joong Ang Daily
August 01, 2006

With North Korea more isolated than ever from the international community over its nuclear program and recent missile launches, Pyongyang is taking steps to tighten controls on its people in a bid to show it can defy the international community, North Koreans interviewed in Beijing said.

“It seems that we have to sing the revolutionary songs again,” said one North Korean in Beijing, saying it was time for his country to get mentally tougher. “Nobody listens to us, thus the only way left is to stick together,” the North Korean said.

If Pyongyang hoped to gain more concessions in nuclear negotiations and resolve the issue of financial sanctions imposed by Washington on Banco Delta Asia through its missile launch, the results have been the opposite.

A United Nations Security Council resolution backed by Pyongyang’s long-time ally, Beijing, was adopted. The Bank of China also froze North Korean accounts at its Macao branch, a Korean lawmaker has said.

In addition, a senior official of the United States Treasury Department said recently, Singapore and Vietnam have made commitments to clamp down on illicit North Korean financial activities such as money laundering.

A source in Seoul who is familiar with North Korea’s circumstances said yesterday that Pyongyang has decided to halt exchanges with the outside until April of next year. The Arirang Festival scheduled for this month has already been cancelled.

Experts said a series of economic measures aimed at reviving the North’s ailing economy, which have been underway since 2001, will also likely be put on hold.

“Inside the North, there are even some calling for a halt of the Kaesong Industrial Complex and the Mount Kumgang tours,” said the source, who added that large numbers of North Korean college students are submitting requests to enlist in the military.

Recently, a senior North Korean official on a visit to Beijing said the North is fully prepared to engage in “a march of suffering.” Recent rhetoric coming out of Pyongyang reflects a war-like atmosphere in the country. The state-run Rodong Sinmun has warned that “invaders would be swept away by the fierce anger of the country.”

A government official in Seoul yesterday admitted that in the short run, diplomatic efforts to lure Pyongyang back to nuclear negotiations would be tough. “We are in a difficult situation, but what else can we do but try?” said the official.

Posted in Arduous March, China, International trade, Japan, Kaesong Industrial Complex (KIC), Mt. Kumgang Tourist Special Zone, Political economy, South Korea, USA | Comments Closed

ROK mitigates calls for additional sanctions-Japan in no hurry

Saturday, July 22nd, 2006

From the Korea Herald:

Lee opposes additional sanctions on N. Korea

South Korean Unification Minister Lee Jong-seok has taken another shot at the United States, saying that additional sanctions against North Korea were undesirable.

“The solution to the missile problem is for South Korea and the United States to collaborate and for China, Russia and other countries to cooperate […] We must think about whether what the United States does immediately equals to what the international community wants to do.”

Lee’s comments are in line with the South Korean government’s policy to expand sanctions against the communist regime and avoid creating further tension on the peninsula, government officials later explained.

Lee underscored the “South Korean government, as a valid member of the international community must make our own voice known as well.”

The Seoul government has been visibly cautious against slapping sanctions on North Korea, which test-fired a barrage of ballistic missiles July 5 despite international warnings.

“There must not be any more comments or actions that will heighten military tension on the Korean Peninsula,” Lee said.

He urged that it was most important to bring North Korea back to the negotiating table and not give it more time to further develop any weapons.

But inter-Korean relations continue to take on a sour note. Upon North Korea’s demand to halt the ongoing construction of a family reunion center in Mount Geumgang, most of the 150 South Korean workers were set to return home yesterday afternoon.

The United States, in the meantime, reportedly refused a visa application for Ri Gun, North Korea’s director-general of the North American Division at the Foreign Ministry.

Ri was set to attend a seminar hosted by Massachusetts Institute of Technology and Stanford University later this month.

The United States is stepping up pressure on the North through investigating its alleged money counterfeiting and by highlighting its human rights abuses.

Japan has also made moves to fortify its defense lineup against the possible threat from North Korea.

“To solve this, any form of dialogue must be accomplished (with the North),” Lee said. Seoul officials said bilateral talks between the United States and North Korea should be considered as a possibility.

Here is what the US has been up to: 6/22/2006 From the Joong Ang Daily:

U.S. and Japan press on with plans for sanctions

The recent visit to Seoul by a U.S. Treasury Department official and his stops in other regional capitals is a sign that Washington intends to tighten the financial noose around Pyongyang. After telling Korean officials that Washington might reinstate trade sanctions on North Korea that were lifted during the Clinton administration, Stuart Levey, the under secretary for terrorism and financial intelligence, moved on to Vietnam, Singapore and Japan. Sources in Seoul said yesterday that the main purpose of his trip was to search for bank accounts linked to illicit activities in which North Korea is engaged.

On Tuesday, the under secretary reportedly met with Vietnamese government and financial officials. A diplomat in Seoul said, “A bank account that is used by Hyundai Asan and North Korea has been under investigation there.”

Last autumn, Washington warned Banco Delta Asia in Macao of financial sanctions if it did not tighten its controls against money laundering; about 40 North Korean accounts there have reportedly been frozen. Hyundai Asan once sent its payments to North Korea to that bank; Pyongyang has directed the payments to other bank accounts in Austria and Vietnam since then.

After arriving in Tokyo on Thursday Mr. Levey reportedly gave officials there a list of persons and companies suspected of being linked to North Korea’s missile programs. The U.S. official also discussed with his hosts possible measures to block the flow of cash from ethnic Koreans in Japan to their homeland, a move Tokyo has said publicly it was considering.

In Singapore, at least one bank account has been linked to money sent by the Hyundai Group to North Korea before the 2000 inter-Korean summit between Kim Dae-jung of South Korea and Kim Jong-il. Ironically, Don Kirk, a reporter for the International Herald Tribune in Seoul, mentioned that account in an article he wrote shortly after the summit; Seoul reacted with fury and the matter lay dormant for some time. Prosecutors eventually announced in 2003 that $450 million had been sent to North Korea to induce Kim Jong-il to host the summit meeting.

As other nations study ways to step up pressure on North Korea, the Roh administration remains defiant in pursuing reconciliation. But even more important to North Korea than the South is China. Efforts to coordinate sanctions have centered on the North’s major ally and provider of food and energy; Beijing is seen internationally as having enough leverage to bring Pyongyang back to the six-nation nuclear negotiations.

But a senior Chinese general said Thursday there was little his government could do. Guo Boxiong, the vice chairman of China’s Central Military Commission, flatly told an audience at the National Defense University in Washington, D.C., that “China cannot possibly force the DPRK to do anything or not to do anything.”

Separately in Washington, the Bush administration is planning to implement the recent United Nations Security Council resolution on North Korean missiles and nuclear programs by enacting new legislation. Senator Sam Brownback, a Kansas Republican, told a news conference that a bill called the “North Korea Nonproliferation Act” is in the works. It would bar companies or individuals involved in North Korea’s mass weapons programs from doing any business with U.S. companies. The act is similar to legislation already in force, aimed at Iran in 2000 and then expanded to include Syria.

Defenses against missiles are also being given more attention. Washington and Tokyo are expected to sign an agreement on the operation of missile defense systems that includes commitments to more sharing of intelligence on North Korea. The Mainichi Shimbun, a Tokyo daily, added in an article yesterday that the agreement will allow Japan to receive U.S. satellite photos and data more quickly.

by Lee Chul-hee, Brian Lee

From the Associated Press (Via Korea Liberator)

Japan Won’t Rush Sanctions on North Korea
7/19/2006
Hiroko Tabuchi

Prime Minister Junichiro Koizumi said Wednesday Japan will not rush to impose more sanctions on North Korea, amid reports Tokyo may call for five-party talks on the sidelines of a regional security forum on the North’s nuclear ambitions.

Japan, meanwhile, plans to launch two spy satellites to monitor North Korean activity by the end of the year, a news report said.

Koizumi told reporters Wednesday Japan will wait for a further response from North Korea to a U.N. Security Council resolution and a Group of Eight summit statement condemning its missile test-launches.

“North Korea should take the resolution and the (G-8) chairman’s statement seriously. I think it’s better for us to wait and see,” Koizumi said.

He also urged Pyongyang to return to six-nation talks on its nuclear weapons program, which have stalled over the North’s anger at U.S. sanctions for alleged counterfeiting and money laundering activities.

Koizumi’s remarks seemed at odds with recent hardline remarks by Japan’s top government spokesman, as well as a report carried earlier Wednesday by Japan’s largest daily newspaper, the Yomiuri Shimbun.

Chief Cabinet Secretary Shinzo Abe suggested Tuesday that Tokyo had begun preparations to impose further economic sanctions on North Korea.

The Yomiuri said Wednesday Japan was considering banning cash remittances and freezing North Korean assets in Japan early next month. The newspaper did not say where it got the information.

Tokyo has so far imposed only limited sanctions — such as barring a North Korean trade ferry from Japanese ports — against North Korea in response to its missile tests.

A separate news report said Wednesday Japan has called for five-party talks, excluding Pyongyang, on the sidelines of the ASEAN Regional Forum next week to explore ways to resume stalled multilateral negotiations on the North’s nuclear ambitions.

It remained unclear whether the talks — potentially involving Japan, South Korea, Russia, China and the United States — would materialize, because Beijing hasn’t said whether it is willing to participate, Kyodo News agency reported. Kyodo did not say where it obtained the information.

Chun Young Woo, South Korea’s deputy foreign minister and chief South Korean delegate to the six-party talks, was slated to visit Japan for talks Thursday with Japanese counterpart Kenichiro Sasae.

Also Wednesday, Japan’s space agency, JAXA, said it would launch two more spy satellites using H-2A rockets, according to Kyodo. JAXA launched two spy satellites in March 2003 to monitor North Korea. JAXA officials couldn’t be reached for comment late Wednesday.

North Korea drew international condemnation this month after test firing seven missiles, including a long-range Taepodong-2 believed capable of reaching parts of the U.S.

On Saturday, the U.N. Security Council passed a resolution criticizing the missile tests and banning all U.N. member states from trading with Pyongyang in missile-related technology. The North has since rejected the resolution, warning of further repercussions.

Posted in Banking, Fiscal & monetary policy, Illicit activities, Japan, Ministry of foreign Affairs, South Korea, USA | Comments Closed

Are sanctions curbing DPRK illicit activities?

Friday, July 21st, 2006

From the Joong Ang Daily:

Experts say money squeeze on North is working

For 10 months, Washington has enforced a systematic plan to clamp down on cash going into North Korea. The measures are working, experts say.

Nam Sung-wook, a North Korea expert at Korea University, estimated yesterday that the recent measures have led to a 40 percent decline in North Korean leader Kim Jong-il’s income.

Since the 1980s, Kim Jong-il has regularly collected money from four sources: forged bank notes, arms sales, drug trafficking and money coming from ethnic Koreans living in Japan who acquire money by operating legal gambling casinos there.

Mr. Kim used the money to cement his hold on the North Korean elite, such as the military. Those in the right position received from the “Dear Leader” gifts ranging from German luxury cars to Japanese electronics.

However, since 2002, when the Bush administration started to tackle the issue with its North Korea Working Group, the situation changed and has squeezed the North. The U.S. group is composed of 14 government organizations, including the U.S. treasury department. Washington’s efforts against counterfeit money have yielded results: At the end of last year Irish national Sean Garland and six others were indicted for distributing North Korean-manufactured “supernotes.”

The North is believed to have produced annually $15 million to $25 million of forged money.

As a result of international pressure, one government official said it would be harder for the North to print new forged bank notes and circulate them.

The arms trade is also an important money maker for the North. However, since it sold 15 Scud-type missiles in December 2002 to Yemen, Pyongyang has not inked another arms deal. Sources said yesterday Pyongyang tried last year to sell missiles to African nations, but in light of Washington’s international call to prevent the transfer and sales of weapons of mass destruction, cautious African nations have distanced themselves from Pyongyang.

In the international arms market, Chinese-manufactured AK-47 assault rifles and other cheaper alternatives are being preferred over North Korean-made ones. The North’s drug trafficking is reportedly giving Pyongyang an annual income of $100 million. From 1998 to 2002 Japanese authorities seized 1,500 kilograms (3,300 pounds) of North Korea-manufactured philpone, a methamphetamine.

Nevertheless, a continued crackdown has narrowed the avenues of sales to organized crime groups such as the Japanese yakuza.

Money sent from the North Korea- backed Chongryon, the General Association of Korean Residents in Japan, amounted to 2 billion yen ($1.7 million) to 3 billion yen annually until 2002 with the money being shipped by a North Korean ferry.

However, since 2003, Tokyo has imposed regulations on the ferry, dropping the money flow to 1 billion yen per year. With the recent missile launch, Tokyo is now considering cutting off the money flow even more by strengthening the monitoring of insured postal parcels above a certain amount.

Posted in Arms shipment, Banking, Chongryun, Counterfeiting, Drug smuggling, Fiscal & monetary policy, Illicit activities, International Aid, Japan, Military, Political economy, South Korea, USA | Comments Closed

DPRK-China realtions a little bumpy

Thursday, July 20th, 2006

From the Joong Ang Daily:

The United States is blocking all possible ways of transferring money to North Korea. Along with a United Nations resolution, Washington is putting pressure on companies and banks of all countries that have business transactions with North Korea to cut the relations. Japan has blocked money transfers to North Korea, banned a North Korean ferry from entering its ports, frozen North Korea’s assets and banned companies from having transactions with North Korea.

The hardest blow on North Korea was China’s approval of the UN resolution. As the only ally to North Korea, China has provided it with more than half the food and energy the North needs. It is North Korea itself that has made China change its stance.

North Korea-China relations these days are the worst since in June 1995. Back then, North Korea’s leader Kim Jong-il released a statement in the Rodong Sinmun, or Newspaper of the Workers that China had betrayed the spirit of socialist revolution by introducing a market economy. Although the head of North Korea depends heavily on China for the survival of his country, he recently told an American delegate that China was unreliable.

Posted in China, Japan, Political economy, South Korea, USA | Comments Closed

North Korean Economy Watch