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9.2 Tons of Gold Replaces North Korea’s BDA for 3 Years

Sunday, April 1st, 2007

Daily NK
Han Young Jin
4/1/2007

Singaporean newspaper “Singapore Lianhe Zaobao” reported, “Though the recent BDA issue ended in shambles, Macao and BDA did face some trials” and “With the U.S. able to strangle any county with international financial sanctions, the BDA issue rang alarm bells for illegal acts occurring throughout the world.”

The Zaobao’s online site reported on the 24th, “7~8 small scale family run banks in Macau banks are faced with the threat of closing down as BDA concluded that these banks were acting as North Korea’s ‘laundering black money.’ Macau has been caught in this political issue after being targeted as a place dealing North Korea’s money laundering.” The newspaper also analyzed that the international community had questioned China’s morals.

“All these things have occurred because BDA agreed to supplement North Korea’s gold into dollars” the Zaobao added.

It continued, “During the last 3 years, BDA has exchanged 9.2tons of North Korean gold into $120 million” and “Even last year, North Korea exported gold and silver to Thailand and exchanged $38 million.”

The site reported, “The U.S. is empowering the international financial market and as a result, no financial marketer can oppose the willpower of U.S.” and consequently financial transactions between North Korea and London have ceased. In the past, North Korea had been placing at least 1ton of gold on London markets.

The amount of trade that occurs weekly in London’s gold market equals $2000~3000 million, which in turn equates to 43% of the world’s gold trade. The newspaper pointed out that North Korea’s detachment from London’s markets means that North Korea has now been excluded from the world’s mainstream market.

In the end, even China endured finite investigations as a result of BDA and North Korea’s funds and is now acting in a cautious manner added the report.

In all, the report analyzed that North Korea’s annual production of gold to reach 6 tons.

Posted in Finance, Fiscal & monetary policy, Gold, Illicit activities | Comments Closed

Fake North dollars used to cash UN check in ‘95

Monday, March 26th, 2007

Joong Ang Daily
Lee Sang-il
3/26/2007

North Korean bank allegedly gave counterfeit U.S. $100 notes to a foreigner working for the United Nations Development Program when he cashed a check at a bank in Pyongyang in 1995, a diplomatic source in Washington told the JoongAng Ilbo.

A spokesman for the UN agency confirmed the suspicion, adding that the bills will be handed over to the U.S. Treasury Department for verification.

In 1995, the UNDP’s Pyongyang office issued a check to an Egyptian consultant for his services on a North Korea project.

The consultant claimed that he cashed the check at the Foreign Trade Bank in Pyongyang and that the bank gave him 35 $100 bills.

After returning home, the consultant attempted to exchange the bills for Egyptian currency, but the bills were rejected as fakes, the source said.

The Egyptian sent the bills back to the UNDP office in Pyongyang, and the UN officials confronted the Foreign Trade Bank and asked for real money, the source said. The request was turned down, and the UN agency has been holding the bogus bills for 12 years.

The revelation of the incident highlights charges by the American government that North Korea has been passing so-called “supernotes” ― fake $100 bills ― for many years. Washington’s claim that Banco Delta Asia in Macao was a conduit for the release of the notes was one reason for the freezing of $25 million in North Korean funds in September 2005.

That money is now due to be released as a precondition for progress in the six-party talks. The U.S. has cut the suspect bank’s access to the American financial system.

In an e-mail interview with the JoongAng Ilbo, David Morrison, spokesman for the United Nations Development Program, said the agency is in the process of giving the notes to the Treasury Department. Mr. Morrison said he was not aware of any other incidents.

Mr. Morrison added that the Egyptian consultant has not provided further evidence that the bills were passed by the Pyongyang bank. He also said that UNDP had used Banco Delta Asia to send money to the North to finance projects from January 2000 to December 2002. He said they chose the bank for its convenient financial services.

Asked if North Korea asked the agency to use Banco Delta Asia, Mr. Morrison said it was an independent decision. He said the UN body stopped transactions with the Macao bank when the settlement currency was changed from dollars to euros.

UNDP opened its office in Pyongyang in 1980 and has carried out public hygiene, agricultural, energy and environmental projects.

Posted in Banking, Counterfeiting, Foreign Trade Bank, Illicit activities, UNDP | Comments Closed

Banks balk at handling North’s ‘dirty’ money

Saturday, March 24th, 2007

Joong Ang Daily
Brian Lee
3/24/2007

The messy knot of North Korean funds frozen in a Macao bank is proving difficult to untangle despite Washington’s assurances that the money will be returned to Pyongyang.
As a result, the six-party nuclear talks, which recessed Thursday over the issue, remain on hold while a solution is sought. North Korea demands that it have the money in hand before sitting down again.

South Korean Foreign Minister Song Min-soon said yesterday that the problem of returning the $25 million in funds frozen in Macao’s Banco Delta Asia would be resolved next week and the talks would resume soon. Seoul’s top negotiator, Chun Young-woo, however, said on the same day that resolving the issue will be difficult.

“Next week we will resolve it and expect to move forward in implementation measures,” Mr Song said in a news conference.

Mr. Chun said that the Bank of China, despite pressure by the Chinese government, has refused to put the money into North Korean accounts but is working with Washington to find a way to relay the money to a bank in a third country.

A government official said yesterday that the Bank of China, which is listed on the Hong Kong Stock Exchange, has foreign shareholders and is not willing to risk alienating itself from the international financial community by associating itself with money branded illicit by Washington.

In September 2005, Washington declared Banco Delta Asia a prime money launderer on behalf of North Korea, a move which caused the funds to be frozen.

Furious, North Korea backed away from nuclear negotiations and demanded the money back as a precondition for substantive talks. Recently, Washington agreed to the release of the funds but it has ordered all ties between the rogue bank and the U.S. financial system cut.

Meanwhile, the U.S. State Department said that Treasury Department official Daniel Glaser will go to Beijing soon to consult with the Bank of China on the issue.

Sources said that providing written assurances to the bank from American regulators that it would not face scrutiny over relaying the money might be one way to resolve the issue.
Mr. Chun said that finding a bank willing to accept the money is the key. “North Korea has to designate a bank in a third country,” said the official. “North Korea does not want cash.”

A government official said yesterday that Pyongyang wants contact with an overseas bank and is also unwilling to have the money wired to a North Korean bank.

“Any bank will think that there could be problems with its credit rating when dealing with money stamped illicit by Washington,” the official said. “Finding a bank to receive the money will be a difficult task.”

Mr. Chun remained cautiously optimistic. While he admitted that little progress was made in the latest round of talks, he said that from a long term perspective Pyongyang has learned a lesson that would help it understand its current position of isolation in the international community. “Even if there is the political will to resolve the issue, North Korea has seen the cold reality of the international financial world,” he said.

Posted in Arms shipment, Banking, Counterfeiting, Drug smuggling, Finance, Illicit activities | Comments Closed

U.S., N.K. resolve BDA dispute

Tuesday, March 20th, 2007

Korea Herald
3/20/2007

‘Pyongyang pledges to use funds for education, humanitarian purposes’

The United States and North Korea have resolved a dispute over $25 million in frozen North Korean funds, clearing the way for progress in dismantling the North’s nuclear programs, U.S. officials said Monday.

The U.S. nuclear envoy, Christopher Hill, said six-party talks – which resumed Monday – could now “move on to the next problem, of which there are many.”

U.S. Deputy Assistant Treasury Secretary Daniel Glaser said the funds would be transferred into a North Korean account at the Bank of China in Beijing to be used for education and humanitarian purposes. Glaser said Pyongyang had proposed the arrangement.

The funds, some of which U.S. authorities suspect may be linked to counterfeiting or money laundering by cash-starved North Korea, had held up progress in nuclear disarmament talks.

“North Korea has pledged … that these funds will be used solely for the betterment of the North Korean people,” Glaser said.

“We believe this resolves the issue of the DPRK-related frozen funds,” Glaser said using the acronym for North Korea’s formal name, the Democratic People’s Republic of Korea.

Under last month’s deal, North Korea – which conducted its first atomic test in October last year – would get badly needed energy aid and diplomatic concessions in return for shutting down its nuclear programs.

North Korea was given 60 days from the signing of the agreement to close its main nuclear reactor at Yongbyon and allow International Atomic Energy Agency (IAEA) inspectors back into the country to supervise.

In return, North Korea would initially receive 50,000 tons of heavy fuel for energy.

The impoverished state would eventually receive 1 million tons of heavy fuel or equivalent energy aid if it permanently disbanded its atomic weapons program.

Hill said he now expected the initial provisions of the February accord to be implemented on schedule.

“We look forward to that process continuing in the next 30 days, so that we will have the shutdown of the Yongbyon facility and the sealing of it and the monitoring of it by IAEA personnel,” he said.

Hill also insisted that the United States had achieved its goals in taking action against North Korea for money laundering and counterfeiting, despite allowing the $25 million to go back to Pyongyang.

“What this means is that the North Koreans understood our concerns (and were) prepared to cooperate with us to make sure the money is used appropriately,” he said.

South Korea, which has already said it will provide the initial batch of 50,000 tons of fuel oil, welcomed Monday’s development.

“Since the issue has been resolved, there will be no big obstacles… during the initial 60-day stage for disabling North Korea’s nuclear facilities,” chief South Korean envoy Chun Yung-woo told reporters.

Japan’s chief envoy, Kenichiro Sasae, expressed similar optimism but cautioned that the focus should remain on the much tougher task of permanently putting an end to North Korea’s nuclear program.

“What is important is that this is not the end… we must work by holding a broad view, a long-term view. We must not be caught up on day-to-day movement,” Sasae said.

Posted in Arms shipment, Banking, Counterfeiting, Drug smuggling, Energy, Finance, Illicit activities, Oil | Comments Closed

N. Korea Has 3 Stimulant Drug Factories

Monday, March 19th, 2007

Korea Times
3/19/2007

Japan’s National Police Agency (NPA) has reported that it suspects there are at least three secret factories producing illicit stimulant drugs in North Korea, the Yomiuri Shimbun reported Saturday.

The Japanese daily said that Hiroto Yoshimura, deputy commissioner general of the NPA, mentioned the suspicion of the facilities during his speech as a Japanese representative at the U.N. Commission on Narcotic Drugs’ closed-door meeting in Vienna on Wednesday.

The commission is under the U.N. Office on Drugs and Crime.

Two of the three factories are located in areas where pharmaceutical factories were situated when the Korean Peninsula was under Japanese colonial control, Yomiuri reported quoting sources.

It is highly possible that North Korea has been using the factories to produce the drugs, according to the report.

It is the first time that the NPA has mentioned at an international conference the locations of stimulant drug factories in North Korea.

Over smuggling of North Korea’s stimulant drugs, the NPA reexamined seven cases uncovered from 1997 to May last year, in which about 1,500 kilograms of stimulant drugs were seized.

As a result, the NPA determined in July that Pyongyang was involved in an organized way on the grounds:

_ Spy boats of North Korea’s secret agency have been used as a means of transportation.

_ North Koreans arrested for smuggling made confessions hinting they had been acting under the instructions of the North Korean government.

According to the authorities, the drugs seized are divided into three types, based on analyses made of the contents. Due to differences in impurities and crystalline elements, the police are increasingly under the belief the drugs were produced at different locations.

Further, the authorities analyzed confessions of suspects arrested for smuggling stimulant drugs, data from intelligence satellites and the moves of covert operations boats and cargo vessels that transported the drugs.

The police strongly believe buildings in Wonsan in North Korea’s east and Chongjin in the northeast are drug factories.

Both places are where the Japanese pharmaceutical factories were located before World War II.

Also, it has been confirmed that stimulant drugs were sent from a port at Nampo near Pyongyang and there is a building suspected to be a drug factory near the port.

In addition, the NPA has obtained information there is another factory along the Yalu River near the border with China.

In November, the NPA reported at an international conference in Bangkok on controlling drugs in the Asia-Pacific area of North Korea’s state involvement in stimulant drug smuggling.

Posted in Drug smuggling, Illicit activities, Japan, U.N. Office on Drugs and Crime | Comments Closed

Unfreezing North’s funds now up to Macao, says U.S.

Friday, March 16th, 2007

Joong Ang daily
5/16/2007

One obstacle to successfully concluding nuclear talks with North Korea may have been removed Wednesday in Washington when the U.S. Treasury Department concluded an 18-month investigation into a Macao-based bank suspected of money laundering activities on behalf of Pyongyang.

As part of its action against Banco Delta Asia, the U.S. will cut all ties between the small lender and the American financial system, a move that clears the way for Macao authorities to release $25 million in frozen North Korean assets held by the bank.

The money has been a major issue in the six-party talks with North Korea.

Stuart Levey, undersecretary for terrorism and financial intelligence, told reporters that it was now up to Macao to decide what to do with the frozen accounts.

“I think we still have some consultations to go but I think we won’t get ourselves into a situation where the BDA will pose a stumbling block to the six-party process, so what was important about the announcement was the treasury went final on this ruling,” Christopher Hill, Washington’s chief envoy to the six-party talks, said yesterday.

The Treasury Department said in a press release, “Abuses at the bank included the facilitation of financial transactions related to illicit activities, including North Korea’s trade in counterfeit U.S. currency, counterfeit cigarettes and narcotics.” Mr. Levey said, “In fact, in exchange for a fee, the bank provided its North Korean clients access to the banking system with little oversight or control.”

By barring the family-owned Banco Delta Asia from transactions with U.S. banks, the firm is essentially cut off from the global monetary system.

“Do you think I look worried? I’ll take it as it comes,” Delta Asia Group (Holdings) Ltd. Chairman Stanley Au told a television reporter in Beijing. Mr. Au is close to senior leaders in Beijing.

In taking the action, U.S. anti-money laundering laws are enforced and the talks with North Korea are no longer in peril over a relatively small amount of money.

Sources had said earlier that once the investigation was completed, Washington would leave the final decision to unfreeze some of the $25 million to Beijing, which has sovereignty over Macao. Kim Gye-gwan, the North’s chief representative to the six-party talks, demanded earlier that all the money be freed. North Korean officials who met with Mohammed ElBaradei, head of the International Atomic Energy Agency, earlier this week reiterated that demand as a precondition to taking initial steps to implement a deal to denuclearize the North.

That is a message to the Chinese, a South Korean government official said yesterday. “Pyongyang wants to get back as much as possible so they are telling Beijing what they want,” said the official. “If the amount released is below Pyongyang’s expectation it could still hamper the negotiations.” Another government official said that Beijing needed to come up with a “magic number” that could save face for both Pyongyang and Washington.

“If they release all of it, that would mean Washington created a fuss about nothing but they can’t go too low either,” said the official. “And as host of the nuclear talks China wants the thing to move on.”

Asked yesterday by reporters whether he expected all of the money to be released, Kim Myong-kil, deputy chief of North Korea’s U.N. mission, said, “As far as I know there was an agreement to do that.”

The implementation of a broad agreement reached in September 2005, under which Pyongyang committed to scrap its nuclear programs in exchange for security guarantees and energy aid, hit a wall almost immediately when Washington designated Banco Delta Asia a “primary money laundering concern” in the same month. U.S. banks and other financial institutions cut ties with the bank, thus severing a vital link between the isolated North and global finance.

Pyongyang agreed last month to take initial steps to implement the 2005 agreement only after Washington indicated that the bank issue would be resolved.

Analysts have speculated that the frozen funds ― as well as the proceeds of counterfeiting and other activities ― have been used by North Korean leader Kim Jong-il to lavish goodies on his inner circle.

The six-party talks are set to resume Monday in Beijing.

The small bank with the big problem

Once virtually unknown outside of Macao, Banco Delta Asia is a small family-owned bank that has had a big impact on nuclear negotiations with North Korea. The bank emerged from the shadows when it was designated in September 2005 as a “primary money laundering concern” under Section 311 of the U.S. Patriot Act by the State Department. The designation put control of the bank in the hands of Macao authorities who have reviewed procedures at the bank to prevent money laundering. Established in 1935, the bank has a total of 15 branches in locations such as Hong Kong and Japan. In 2004, it listed deposits of $423 million and loans of $1.4 billion. Bank executives had a long-standing relationship with the North, the U.S. says.

Reportedly, up to $12 million of the $25 million in frozen North Korean money could be from legal activities, and that could be a ball park figure of how much may be released. Washington has now barred all U.S. financial institutions from conducting business with the bank, but the eventual fate of the firm rests with Chinese-controlled Macao. Sources said recently that among the findings by the Treasury department, transactions were confirmed with the Pyongyang-based Tanchon Commercial Bank, which has been identified by Washington as the main North Korean financial agent for arms and ballistic missile deals.

Click bleow for a timeline.

Posted in Counterfeiting, Illicit activities, International trade | Comments Closed

Treasury Reportedly Set to Act to Free North Korean Money

Wednesday, March 14th, 2007

NY Times
Steven R. Weisman
3/14/2007

The Treasury Department is expected to move formally this week to bar American banks from engaging in transactions with a bank in Macao linked to North Korea, clearing the way for North Korea to regain possession of money at the bank frozen since 2005, a Bush administration official said Tuesday.

American officials see such a step by the Treasury, which has been expected for weeks, as a crucial part of the recent deal to disarm North Korea’s nuclear program. The deal, announced last month, requires North Korea to disarm its nuclear facilities in return for economic and energy benefits.

The Chinese government effectively froze about $25 million connected to North Korea a year and a half ago, when the Treasury Department listed Banco Delta Asia, a small family-owned bank in Macao, as a “primary money laundering concern.” As much as half of the money is expected to be returned to North Korea.

American officials charged in 2005 that the bank was helping North Korea conduct counterfeiting, narcotics trafficking and transactions related to its nuclear weapons program, a charge that North Korea and the bank denied.

The initial Treasury announcement put American banks on notice that after further investigation, the department would decide whether to bar United States banks formally from facilitating transactions with the bank.

However, the practical effect was to make all United States banks voluntarily cease transactions with Banco Delta Asia.

Without the ability to acquire dollars, Banco Delta Asia collapsed. Macao froze all its funds related to North Korea, and most of its other customers withdrew their money in a run on the bank. The bank was then taken over by the authorities in Macao, a semiautonomous province of China.

Subsequently, American and Chinese authorities pored over more than 300,000 documents describing the transactions with North Korea. These included accounts of 20 North Korean banks, 11 North Korean trading companies, 9 North Korean citizens and 8 Macao-based companies that did business with North Korea, according to bank records filed with the Treasury Department.

The Treasury announcement expected this week would formalize what is already in place. It would probably mean that the bank could do only a modest amount of business, without the benefit of dollar transactions.

But it would mean that the Chinese government would be in a position to return some of the funds to North Korea that are not linked to counterfeiting, drugs, nuclear arms or other illicit activities.

For example, some of the funds belong to a North Korean unit of British American Tobacco, American officials say, and those funds are expected to be returned to the company, which is owned by British interests.

When the North Korea nuclear deal was announced last month, no mention was made of returning funds to North Korea from the bank, but American officials now say that the return of those funds was a major incentive for North Korea to reach an accord.

The disarmament agreement was negotiated with the United States, China, South Korea, Japan and Russia as part of what were called six-party talks.

Christopher R. Hill, the assistant secretary of state for East Asian and Pacific affairs and the central envoy in the talks, said this month that North Korea was “concerned about the fact that we were able to go after an important node of their financing” but that the United States would continue to monitor its illicit activities.

Posted in Arms shipment, Banking, British American Tobacco (BAT), Counterfeiting, Drug smuggling, Finance, Illicit activities | Comments Closed

South will give money directly to North Korea

Sunday, March 11th, 2007

Update: the money went missing.

South Korea criticizes North Korea for failing to disclose how aid was used
Herald Tribune
2/11/2008

South will give money directly to North Korea
Joong Ang Daily
Lee Young-jong and Ser Myo-ja
3/12/2007

Although South Korea does not allow cash to be given directly to North Korea, it made a deal of its own.

The two countries announced Saturday that Seoul would give Pyongyang cash to buy video conference equipment. A South Korean official said yesterday the amount will be $400,000.

North Korea will use the money to set up video conference calls between families separated during the Korean War, according to a joint statement issued Saturday by the two countries.

The South Korean government has strictly banned humanitarian groups ― as well as all residents ― from giving cash to the North due to concerns the money could be spent for other purposes.

“We decided to assist the North to smoothly resolve the separated family issue,” the official said, adding that the government will thoroughly monitor the spending of the money and the use of the equipment.

The cash payment agreement was first made at a Red Cross meeting in June 2006, but never publicly announced. The money was not exchanged because North Korea conducted a missile test the next month, temporarily freezing inter-Korean relations.

After progress in the recent six-party talks designed to make North Korea nuclear-free, South Korean Red Cross officials pledged again on Saturday at a meeting at a Mount Kumgang resort to give Pyongyang the money, the official said on condition of anonymity.

According to the joint statement, the two Koreas agreed that video conference call reunions will be expanded. The two Koreas also agreed a video conference call reunion center will be built in Pyongyang, separately from the reunion center under construction at Mount Kumgang, and that Seoul will provide construction material and equipment. The material and money will be released at the end of March, the agreement said.

Neither the joint statement nor the press release specified the amount of money, but the Seoul official said it will be $400,000. The construction material to be provided to the North is worth another $3.5 million, he said.

The South Korean government was unable to give the video conference call equipment, such as liquid crystal display monitors and computers, directly to the North because of United States regulations banning the export of dual-use goods to North Korea. Under the United States export administration regulations, strategic goods that include more than 10 percent of United States-made components or technology, are banned for export to state sponsors of terrorism, which include North Korea.

According to the official, South Korea advised the North to purchase the items from China with the cash. Washington could make an exception to the export ban, presumably at Seoul’s request, but it would take time to do so.

In addition to the cash, the $3.5 million worth of goods, such as trucks, construction materials, air conditioners, heaters and cables, will be provided to build a video conference call center in Pyongyang.

At the Red Cross talks, the North also agreed to resume the construction of the reunion center on Mount Kumgang on March 21. The two Koreas began the construction in August 2005, but the work stalled last July. The buildings are about 30 percent complete.

Last week’s Red Cross meeting was scheduled for only one day, for about two hours. Due to the North’s persistent demands for cash and materials, the talks went on for a second day, the government official said.

Posted in Civil society, Counterfeiting, International/Korean Red Cross, Mt. Kumgang Tourist Special Zone, South Korea | Comments Closed

Chairwoman of Women’s Union Caught With Drugs Unsettles Hoiryeong

Thursday, March 1st, 2007

Daly NK
Kim Young Jin
3/1/2007

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted in Black markets, Civil society, Drug smuggling, Heung Nam Pharmaceutical Company, Illicit activities, Maebong Company, Political economy | Comments Closed

US Concludes Probe Into NK-Linked Bank in Macau

Tuesday, February 27th, 2007

Korea Times
2/27/2007

U.S. officials said Monday they had wound up their probe into a Macau bank accused of laundering millions of dollars of illicit North Korean funds, Agence France-Presse reported.

The U.S. move raised expectations that sanctions placed on the lender may soon be lifted, AFP said in its dispatch from Hong Kong.

AFP quoted Daniel Glaser, an assistant to the U.S. Treasury Department’s deputy secretary, as saying that a team of U.S. officials had met Macau financial authorities during their one-day visit.

“We’ve completed our investigation,’’ Glaser was quoted as telling reporters at a hastily convened press briefing in nearby Hong Kong hours after the talks ended.

“Everything that we have seen throughout this investigation has confirmed and reinforced the concerns we initially expressed in September 2005,’’ he added.

The talks follow a deal announced two weeks ago between the U.S., the two Koreas, Japan and Russia on initial steps towards dismantling Pyongyang’s nuclear program.

As part of the agreement, the U.S. Treasury team probing Banco Delta Asia (BDA) and other banks believed to have links to North Korea said they would begin talks that would lead to the lifting of sanctions.

“All of this work has put us in a position where we can begin to take steps resolve the BDA matter,’’ Glaser was quoted as saying, adding that he had discussed the matter with North Korean and Macanese authorities.

However, he would not say when a decision would be made on lifting the sanctions, nor on what would happen to some $24 million worth of bank assets frozen by the Treasury.

“I don’t think it would be responsible for me to get into a specific timetable, but we do intend to take steps to resolve the matter and we do intend to do that in a timely fashion and to do it as soon as possible,’’ Glaser said.

BDA has been under administration in Macau since the Treasury announced its inclusion on the watch list in 2005.

The government stepped in after fearful depositors began withdrawing funds at a rate that threatened to destabilize the southern Chinese territory’s financial system.

AFP said that in December the bank admitted to buying gold bullion produced by North Korea.

According to the AFP report, the bank also admitted to continued dealings with Tanchon Commercial Bank for three months after the North Korean lender was blacklisted.

Promising never again to deal with North Korea, BDA has appointed an outside compliance officer and hired Hong Kong-based consultants to upgrade its computer system.

Macau’s authorities, meanwhile, with the backing of China’s central government in Beijing, have instituted tough new laws against money laundering and counterfeit currency.