Archive for the ‘Illicit activities’ Category

College Students Turn to Middlemen in Pyongyang

Monday, December 3rd, 2007

Daily NK
Yoon Il Geun
12/3/2007

An inside source told the Daily NK recently that about 20 to 30% of business agents in Pyongyang are university students.

Since the late 90s, college students started working as agents between artifacts buyers and sellers.

Pyongyang middlemen usually connect local merchants in border area and retailers in Pyongyang. Besides trading foreign goods, they also took part in artifact business around Kaesung, which was the capital of Koryo dynasty from 10th century to late 14th, and thus full of ancient artifacts.

College students lack funds, so their only way to earn money is to be agent.

The insider said “Pyongyang’s college students are the smartest and known for their business skills. Among them, students from Kim Chaek University of Technology are best. It is reasonable to assume at least two out of ten students have become working as trading agents since the March of Tribulation in 1990s.”

“Students are perceived as trustworthy because they are from middle class families. And those who are from local provinces and studying in Pyongyang have advantages.”

Most of these business-practicing students are former army veterans, especially those who are interested in earning money rather than studying. A few poor students who have not enlisted do business.

According to the source, these students rarely attend classes and bribe school college administrators in order to graduate. During “farming supporting period” every spring and autumn (every college student is mandatory to work at farms twice a year), business-students are exempt while buying food for those who participate.

A defector from Pyongyang said “There is little to learn at universities and society is changed to capitalist, so there is no shame for doing business among college students. The other reason might be influx of army veterans into colleges.”

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Defector detained for drug smuggling

Thursday, November 15th, 2007

Joong Ang Daily
Brian Lee
11/16/2007

A North Korean defector has been charged and detained for trying to smuggle North Korean-made Philopon, an illegal stimulant, into the country, the Incheon District Prosecutors’ Office said yesterday.

Identified only by his last name, Park, the 38 year-old tried to receive the drugs in a package mailed from China that was intercepted at Incheon International Airport, prosecutors said in a release.

Customs officials who monitor the incoming packages discovered 47 grams of the drug.

The package was addressed to Park; investigators arrested him on Wednesday. The package bore a Chinese address for the sender but Park told investigators that the drugs were manufactured in Chongjin, North Hamgyong Province in North Korea and delivered through another North Korean he had contacted in China.

Park defected to South Korea in January 2002 and established a small trading company doing business with Japan, China and Russia.

He told investigators that a member of a Japanese criminal group had asked to become a supplier of the drugs. The package was supposed to be a sample. Park also said he had already wired 3 million won ($3,200) to a bank in China for the other North Korean.

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Odd couple: The royal and the Red

Wednesday, October 31st, 2007

Asia Times
Bertil Lintner
10/31/2007

North Korean Premier Kim Yong-il is scheduled to pay a four-day visit to Cambodia in early November, underscoring the curious close relationship between one of the world’s last communist dictatorships and one of Asia’s most ancient monarchies.

Kim Yong-il, who should not be confused with the North Korean supremo, “Dear Leader” Kim Jong-il or any of his relatives, will hold talks with Cambodia’s retired king Norodom Sihanouk, the Cambodian Foreign Ministry said in a statement posted on its website.

The North Korean premier will also hold “official talks” with his Cambodian counterpart Hun Sen, and “pay courtesy calls” on Senate president Chea Sim, and the president of the National Assembly, Heng Samrin, according to the statement.

Cambodia has long served as a link between North Korea and Southeast Asia and beyond, so it is plausible to assume that trade and related issues will be on the agenda. For years the two countries ran a joint shipping company, and before the China-led six party talks, Cambodia had offered to mediate over Pyongyang’s contentious nuclear program.

Kim Yong-il’s visit to Cambodia is not the first by a North Korean dignitary in recent years. Kim Yong-nam, president of North Korea’s rubber-stamp parliament, the Supreme People’s Assembly, also visited the country in 2001 at the invitation of Sihanouk, who had then not yet abdicated in favor of his son, Norodom Sihamoni, the current serving monarch.

Kim Yong-nam now functions as de facto head of state, as Kim Jong-il’s father, “Great Leader” Kim Il-sung was elevated to the position of “eternal president” before his death in 1994, making North Korea not a monarchy, but rather the world’s only necrocracy.

As incongruous as it may seem, Cambodia is North Korea’s oldest ally in Southeast Asia. It all began when Sihanouk met Kim Il-sung in 1961 at a Non-Aligned Movement meeting in Belgrade and a personal friendship developed between the two leaders. When Sihanouk was ousted in a coup in 1970, Kim Il-sung not only offered him sanctuary in North Korea but also had a new home built for him about an hour’s drive north of Pyongyang.

A battalion of North Korean troops worked full-time on it for almost a year, and when it was finished, only specially selected guards were allowed anywhere near the 60-room palatial residence. Overlooking the scenic Chhang Sou On Lake and surrounded by mountains, the Korean-style building even had its own indoor movie theater. Like the Great Leader’s son, Kim Jong-il, Sihanouk loves movies.

Sihanouk has both directed and acted in his own romantic feature movies and a few more were made in North Korea, with Cambodian actors strutting their stuff against the backdrop of Korea’s snow-capped mountains.

French wines and gourmet food were flown in via China, and Sihanouk and his entourage were treated as royals would have been in any country that respects monarchy – as North Korea evidently does.

By contrast, North Korea has maintained less cordial relations with neighboring communist Vietnam, which still exerts behind-the-scenes pressure on Cambodia. Kim Yong-il will nonetheless also visit Hanoi during his diplomatic tour of Southeast Asia.

Throughout the Vietnamese occupation of Cambodia, North Korea refused to recognize the regime that Hanoi installed in Phnom Penh in January 1979 – and that despite immense pressure at the time put on Pyongyang from Moscow. During a meeting between Kim Il-sung and Sihanouk seven years later on April 10, 1986, in Pyongyang, the Great Leader reassured the then prince that North Korea would continue to regard him as Cambodia’s legitimate head of state.

When Sihanouk returned to Phnom Penh in September 1993, after United Nations-led mediation to end Cambodia’s civil conflict, he arrived with 35 North Korean bodyguards, commanded by a general from Kim Il-sung’s presidential guards. They are still there, now guarding Sihanouk as well as the new king, Sihanomi, who is not as close to North Korea as his father, but has paid at least one visit to Pyongyang.

Sailing buddies
Sihanouk and the Cambodian royals showed their gratitude to the North Koreans when in the late 1990s they set up a privately-owned shipping registry, the Cambodia Shipping Corporation (CSC). The flag of convenience was used by the North Koreans, and it enjoyed royal protection as it was headed by Khek Vandy, the husband of Sihanouk’s eldest daughter, Boupha Devi.

CSC was also partly owned by a Phnom Penh-based North Korean diplomat and for a few years aggressively marketed itself as a cheap and efficient “flag of convenience” service for international shippers. A series of embarrassing maritime incidents, including the interception in June 2002 of a Cambodian-registered – though not North Korean owned – ship by the French navy, in a joint operation with US, Greek and Spanish authorities, of a massive haul of cocaine off the West African coast prompted Hun Sen’s government to cancel CSC’s concession and reportedly give it to a South Korean company, the Cosmos Group.

At the time, International Transport Federation general secretary David Cockroft told the Cambodia-based fortnightly newspaper the Phnom Penh Post that “they’ll need to be able to walk on water, because nothing short of a miracle will clean up the name of Cambodian shipping”. Indeed, little appeared to change, including North Korea’s use of Cambodia’s flag of convenience for controversial shipments.

In December 2002, a Cambodian-registered, North Korean-owned ship named So San was intercepted by Spanish marines, working on a US tip, in the Arabian Sea. It was found to be carrying 15 Scud-type missiles, 15 conventional warheads, 23 tanks of nitric acid rocket propellant and 85 drums of unidentified chemicals under a cargo of cement bags.

The destination of the weaponry was said to be Yemen, and following protests from both Yemen and North Korea – and intervention by the US, which apparently did not want to antagonize Yemen, a supposed ally in Washington’s “war on terror” – the ship was allowed to continue to Yemen. Later revelations indicated that the cargo was ultimately delivered to Libya, which caused considerable embarrassment in Washington.

Premier Kim Yong-il is likely to be quite familiar with the CSC, as he served as minister for land and marine transport from 1994 until the Supreme People’s Assembly appointed him to the premiership in April this year. But since the scandal-ridden CSC was reorganized five years ago, Cambodia’s economic importance to Pyongyang would appear to have waned, and North Korea’s only known activity in the country today is in the restaurant business, including eateries in Phnom Penh and Siem Reap.

Yet as a diplomatic link to the wider region, Cambodia is still important to North Korea. In April 2003, the Cambodian government, at the urging of Sihanouk, had plans to send an envoy to Pyongyang in a bid to persuade the North Korean leadership to be more flexible about talks on its nuclear program, which at that time had stalled.

The mission never materialized, but North Korea no doubt remembers that its trusted ally Cambodia tried first to mediate – and that Phnom Penh in future could still serve as a gateway for improved contacts with the outside world. It remains to be seen what message Kim Yong-il will bring to Phnom Penh, but it is reasonable to assume that his visit will, despite the official announcements, be confined merely to “courtesy calls” and royal audiences.

Bertil Lintner is a former correspondent with the Far Eastern Economic Review and the author of Great Leader, Dear Leader: Demystifying North Korea under the Kim Clan. He is currently a writer with Asia-Pacific Media Services.

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North Korea on Google Earth

Saturday, October 6th, 2007

Version 5: Download it here (on Google Earth) 

This map covers North Korea’s agriculture, aviation, cultural locations, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks. It is continually expanding and undergoing revisions. This is the fifth version.

Additions to the latest version of “North Korea Uncovered” include updates to new Google Earth overlays of Sinchon, UNESCO sites, Railroads, canals, and the DMZ, in addition to Kim Jong Suk college of eduation (Hyesan), a huge expansion of the electricity grid (with a little help from Martyn Williams) plus a few more parks, antiaircraft sites, dams, mines, canals, etc.

Disclaimer: I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. These efforts include pouring over books, maps, conducting interviews, and keeping up with other peoples’ discoveries. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds as to what they see. I cannot catch everything and I welcome contributions.

I hope this map will increase interest in North Korea. There is still plenty more to learn, and I look forward to receiving your additions to this project.

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North Korea: Illegal Exporting of Weapons to Sri Lanka Guerilla Groups

Thursday, September 27th, 2007

Daily NK
Namgung Min
9/27/2007

The Sankei Shimbun reported on the 26th that a smuggling vessel containing North Korean weapons have been caught on their way to illegally entering Sri Lanka.

According to the Sankei, the Sri Lanka navy arrested the vessel containing the 68 automatic rifles manufactured by the Munitions Industry Department (No. 99 Department) of the Worker’s Party that was leaving from Chonjin to Sri Lanka.

The Sankei announced that when the Sri Lanka navy tried to capture the smuggling vessel on October in 2006 and February this year, the smuggling vessel opened fire so the Sri Lankan navy shot them down. On March in 2007, the Sri Lankan navy took the North Korean vessel near the shore and confiscated the North Korean weapons and arrested the captains.

Furthermore, the newspaper revealed that there was no sign implying the nationality but it was identified as North Korean due to the confiscated weapons which were identified by the former North Korean military men who defected to South Korea.

It was announced that the North Korean machine guns and antitank guns were planned to be passed over to the Anti-government guerrilla groups named the Liberation Tigers of Tamil Eelam (LTTE) in Sri Lanka.

The U.S. appointed LTTE as a foreign terrorist group in 1997 and the EU also appointed the LTTE as a terrorist organization in April, 2007.

According to the newspaper, the Sri Lankan government conducted investigation and came to a conclusion that a Chinese weaponry company probably acted as an intermediary to smuggle the North Korean weapons to the anti-government guerrillas in Sri Lanka.

In regards to this incident, the Sri Lankan government raised complaints to the North Korean ambassador located in India and the Chinese government, but the both representatives are denying their relations to the illegal smuggling of the weaponry.

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US to Announce More Sanctions on NK Entities

Wednesday, September 26th, 2007

Korea Times
Jung Sung-ki
9/26/2007

(UPDATE: On Oct. 23, [2008] the State Department blacklisted two North Korean companies, Korea Mining Development Corp. and Korea Taesong Trading Co., for violating U.S. bans on the sale of equipment used in building missiles or other weapons of mass destruction to Iran and Syria. Citation: “North Korean Plane Was Grounded at U.S. Request “, Wall Street Journal, Jay Solomon, 11/1/2008 ) 

The U.S. State Department is expected to announce additional sanctions on North Korean entities connected to missile proliferation, Yonhap News reported Wednesday.

Some of the entities are believed to be linked to the Korea Mining Development Corporation (KOMID), which was designated in June 2005 in an executive order for supporting weapons of mass destruction proliferation, it said.

The measure would come at an awkward moment as envoys from six nations _ South and North Korea, the U.S., China, Russia and Japan _ gather in Beijing from Wednesday for a fresh round of negotiations aimed at disabling and eventually dismantling Pyongyang’s nuclear weapons and programs.

The U.S. Treasury had frozen some $25 million in North Korea-related money held in a Macau bank in late 2005, a punitive measure imposed as the six countries were signing an agreement toward denuclearization. That led to more than a year’s suspension in negotiations with the North.

The new round of six-party talks is already on shaky ground with suspicions that Pyongyang may have transferred nuclear-related material to Syria, prompting the unexplained Israeli air incursion into Syria earlier this month.

Tom Casey, a State Department spokesman, said Tuesday the new sanctions are related to missile technology transfers and downplayed possible negative repercussions on this week’s talks.

“The company that was sanctioned has been sanctioned previously for the same thing. So the net effect of this is really pretty minimal,” he said. “I don’t see…any reason why this should impact on the six-party talks.”

North Korea accused the United States of defending Israel’s recent airstrike against Syria, calling the strike a grave crime that undermines regional peace and stability.

The North’s main Rodong Sinmun newspaper said, “Israeli warplanes’ intrusion into the territorial airspace of Syria and bomb-dropping are an outright violation of Syria’s sovereignty and a grave crime that destroys regional peace and security,” according to Yonhap.

The North’s comments came days after high-level talks between North Korea and Syria. The two countries, which deny the allegation of a secret nuclear connection, did not provide details of Pyongyang talks.

Andrew Semmel, acting U.S. deputy assistant secretary of state for nuclear nonproliferation policy, said earlier this month that North Koreans were in Syria, and that Syria might have had contacts with “secret suppliers” to obtain nuclear equipment.

Semmel did not identify the suppliers. However, he said he could not exclude the possibility that a nuclear black-market network, run by the disgraced Pakistani nuclear scientist A.Q. Khan, might have been involved.

Semmel’s comments raised speculation that an alleged Sept. 6 Israeli incursion into Syrian airspace was a strike targeting a nuclear installation. U.S. officials have said Israeli warplanes struck a target. One U.S. military officer said the strike was aimed at weapons being shipped to Hezbollah militants in Lebanon.

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North Korea Is Taken off U.S. Drug-Trafficking Countries List

Wednesday, September 19th, 2007

Bloomberg (h/t One Free Korea)
Bomi Lim
9/19/2007

North Korea was dropped from the U.S. list of countries producing illicit drugs, a sign of further relief of tensions between the two countries.

“North Korea is not affecting the United States as much as the requirements on the list,” Deputy Assistant Secretary of State Christy McCampbell said on Sept. 17 in Washington, according to a transcript of her speech on the State Department Web site.

Ties are improving between the U.S. and North Korea after a February agreement on ending the government in Pyongyang’s nuclear weapons program. As North Korea moves to scale back the program, the U.S. has promised to review ways of improving ties with the communist country, including removing it from a list of states that sponsor terrorism.

North Korea agreed to a year-end deadline to disclose and disable its nuclear facilities after it shut down and sealed its sole operating reactor at Yongbyon in July.

North Korea was first mentioned in the annual presidential report on “major illegal drug transit and drug-producing countries” in 2003, when President George W. Bush said the U.S. would fight the country’s suspected drug trafficking.

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Every Time I Enter North Korea Customs I Feel Like a Criminal

Friday, August 31st, 2007

Daily NK
Kim Min Se
8/31/2007

There is one place that traders curse every time they pass through North Korea and China. That is towards the corruptive and fastidious North Korean customs officers.

It is widely known that North Korean customs officers blatantly seek bribes and extort goods justifying it is for inspection.

As more and more citizens became disgruntled by the security at customs, North Korean authorities enforced strict investigations towards customs officers. However, tradesmen who travel in and out of North Korea comment that the corruption occurring at customs is still prevalent.

Wang Hae Dong (pseudonym), one tradesman who has been bringing goods manufactured in China into North Korea for the past 10 years said on 29th, “It’s becoming harder and harder to bring goods into the country because of the demanding customs officers” and “There is nothing left if you bring 100,000 yuan amount of goods as there are now many tradesmen who have been specifically sent from North Korea to acquire items manufactured in China.”

Wang, a Chinese merchant born in North Korea has been living in North Korea for over 20 years and now runs a trading company which sends items for daily living to North Korea.

Wang said, “Not only is it becoming harder to earn money but when customs officers speak rudely and undergo picky inspections, I don’t want to trade anymore and want to give everything up.” He said, “What’s more annoying is the fact that goods disappear every time inspections are made and yet there is no where to make complaints.”

“Losing one or two items of clothing is nothing. I am lucky not to get bundles of clothing taken away from me” he said.

He said, “I barely make a profit of 0.2~03 Yuan from a piece of clothing bought for 10 Yuan. I import about 5 tons of goods in 3 trucks in one go (worth 1million Yuan) but after I sell all of the goods, I’m left with about 3~40,000 Yuan. After delivery fees and taxes, there are many times I’m left with only 10,000 Yuan but when one or two bundles of goods disappear, the work becomes worthless.”

Irrespective of importing or exporting goods to and from China, all items must undergo thorough inspection at customs. Nothing is exempted from goods transported by car or containers to individual pockets and even purses.

Local traders describe the scene of North Korean customs officers opening and inspecting every piece of item as pandemonium.

Many goods also become damaged despite have been well packaged as they are roughly handled by officers. Losing one or two items is common, though there are cases where even whole boxes are lost.

Wang said, “As of 2 years ago, money was given to Chosun superintendents with an import license to clear goods because Chosun customs was so selective yet still goods went missing. What can I do? I still take goods to Chosun once a week, 4 times a month. Don’t I just have to accept the fact that I can’t redeem the lost money?”

Regarding the reasons why North Korean customs officers scavenge through all the goods like searching for lice, Wang said, “Isn’t so they can find another reason to collect extra money?” and “I think that’s what they live off.”

He added, “Every time I pass through Chosun customs, the customs officers seem like the prison guards and I feel like a criminal who is paying for his crime.”

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Lifting US Sanctions Key to NK’s Economic Revival

Wednesday, August 15th, 2007

Korea Times
8/15/2007

To understand what is at stake, we need to look back at key events in the past that led to North Korea’s isolation in the global economy.

U.S. economic sanctions against North Korea began on June 28, 1950, only three days after North Korea invaded South Korea, when the United States invoked a total embargo on exports to North Korea. Over the years, many more U.S. sanctions have been imposed against North Korea, and North Korean companies. Three of these sanctions have had a significant impact.

The first was the suspension of the Most Favored Nation (MFN) trade status, imposed on September 1, 1951. This sanction, which is still in effect, made it impossible for North Korea to even consider exporting its products to the United States.

The second is the placement of North Korea on the list of countries that support international terrorism. This sanction, imposed on January 20, 1988, followed North Korea’s blowing up of Korea Air Lines 858 on November 29, 1987, off the waters of Thailand.

This sanction has entailed many restrictions, including denial of North Korea’s ability to borrow money from international financial institutions.

The third measure is not a single action, but has taken the form of a tightening grip around the financial network used to fund North Korea’s illicit financial activities.

Although the ultimate target is North Korea, the threat of actual sanctions has been targeted against banks, including Banco Delta Asia, which deal with North Korea’s accounts. These financial sanctions involving Banco Delta Asia have been the focus of recent overt and covert negotiations between North Korea and the United States.

On September 17, 1999, President Clinton agreed to the first significant easing of economic sanctions against North Korea since the Korean War ended in 1953.

The U.S. easing of sanctions against North Korea, announced on June 19, 2000, may have been too little to persuade the leaders of North Korea to give up their prized long-range missile technology. North Korea carried out a nuclear test on October 9, 2006, and the United Nations passed Resolution 1718, further tightening North Korean economy.

There is no doubt that all these sanctions are having an impact on the North Korean economy. For instance, the North Korea’s annual trade deficit has averaged between $800 million and $1 billion in recent years, depending on whether deficits against South Korea are included.

The huge trade deficit is not sustainable, and it will eventually lead to a decrease in North Korea’s trade and gross domestic product. Studies indicate that the entire trade deficit appears to have been financed by weapons sales, illicit activities, and funds flowing from South Korea through joint projects. With the two UN resolutions adopted during 2006 and the tightening of North Korea’s financial transactions that began in 2005, North Korea should find it increasingly more difficult to pay for its trade deficit.

The key issue is not whether North Korea deserves the lifting of all the sanctions imposed against the country on the basis of its behavior since 1950, but how to bring about a peaceful resolution of pending security and humanitarian issues without military confrontation. This brings us to the importance of the upcoming summit between President Roh and North Korean leader Kim.

My assessment is that the collapse of the Soviet Union in 1989 led to an important change in the approach of North Korean leaders toward a better calculation of costs and benefits.

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Chinese Government Demands Abolition of North Korean Drug

Tuesday, July 17th, 2007

Daily NK
Kim Min Se
7/17/2007

Researcher Raphael Pearl at the U.S. Congressional Research Service (CRS) maintained that recently, the Chinese crime syndicate has interfered in North Korean drug manufacturing and deals. Through the steady appearance of the up and coming wealthy class who have amassed a lot of money through sales, a significant amount of drugs began to be circulated in China.

North Korea-Chinese businessman Kim Myung Guk (pseudonym), who is in charge of North Korean mineral exports, frequently enters Hamheung to get minerals (uranium concentrate). Presently, Mr. Kim is in Dandong, China to meet Chinese businessmen.

Mr. Kim said, “The philopon from Hamheung is the best. In Pyongyang, Shinuiju, and Chongjin, Hamheung-made philipons are the most trusted. So I frequently receive requests to deal Hamheung philopon from other businessmen.”

Mr. Kim said, “It got to the point that the Chinese government requested inspection of the Hamheung factory, so the North Korean authorities carried out partial abolition. Nowadays, there is hardly anyone among the North Korean businessmen who do not know about the fact that Hamheung is the center of drug production.”

The Chinese government, when North Korean drugs started coming in on a mass-scale, pointed out the Heungnam Pharmaceutical Factory in Hamheung as a drug production factory in North Korea and demanded the abolition of the factory.

With exports to the outside closing, the great enterprise sold in North Korea

Currently in Shinuiju, philopon made in Hamheung is being sold for 9,000 to 10,000 dollars per kilogram. Drug dealers bring these into China and resell them at three times the higher price to Chinese drug dealers.

However, foreign sales of North Korean drugs is significantly decreasing as a whole.

In recent years, PSI and other international surveillance network have been strengthened regarding North Korea’s illegal actions, so drug exports have remarkably decreased. Further, North Korea-Japan relations have become worsened, so it seems to have exerted an influence on control of North Korean drug sales.

In Dandong, Chinese-North Korean businessman Kim Jong Man (pseudonym), who does trade with North Korea, said, “North Korea, before it ceased trade with Japan due to bad relations, sold a lot to Japan. It is a well-known fact that they were sold at high prices to Japanese yakuza via regular traders.”

However, with the worsening of relations, most avenues for drug sales have been closed. Also, the Chinese government, while proclaiming an all-out war with drugs recently, have significantly intensified control and inspections.

The Chinese government has shown a strong intention to control by broadcasting live via China’s CCTV the trial process of drug criminals through recent unconventional circumstances.

Mr. Kim said, “Due to the circumstances, the significant decrease in North Korean drugs going into China, compared to a year or two ago, can be felt.” Such an atmosphere is collectively acknowledged by other businessmen.

Inevitably, since routes for foreign sales have been closed, drug sales are increasing inside North Korea recently.

If such a trend continues, the day when North Korea will become one of the handfuls in the world known for its drug production and consumption does not seem too far off.

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