North Korean Economy Watch

London Times
Lloyd  Parry
10/11/2006

NORTH Korea’s economy, and the methods it uses to support a Stalinist society in the globalised 21st century, is a subject as murky, dark and dangerous as its totalitarian leadership. Many of the country’s traditional industries, such as mining, chemicals and textiles, are in ruins.
 
But the North Korean military and ruling elite have held off political collapse in the years since the end of the Cold War thanks to a web of criminal businesses backed by the power and military might of a well-armed dictatorship.

The greatest danger from Monday’s underground nuclear test may lie not in the potential for a missile attack on another country, but in the export of nuclear devices or technology, to which President Bush referred in his first remarks on the explosion.

Peter Beck, of the International Crisis Group in Seoul, said: “I’m not worried about them using one of their warheads on a neighbour because that would be suicide. But given their record of selling whatever they have — drugs, missile technology, counterfeit currency — the primary concern has to be proliferation.”

Illegal export businesses that North Korea is accused of operating include the manufacture and sale of drugs, counterfeit currency, fake brand goods such as cigarettes, the forging of tax revenue stamps and money laundering. On top of this there is the lucrative trade in weapons, principally missile parts, which is perfectly legal but deplored by the United States and its allies.

Over the years North Korea’s partners in these enterprises have ranged from Japanese yakuza, Russian drug dealers, Irish republican terrorists, bankers in Macau, ivory poachers in Africa, and the Armed Forces of Egypt, Iran, Libya, Pakistan, Syria, Vietnam and Yemen.

If the North does attempt to profit from its nuclear success it will be covert networks like these that it will employ.

North Korean official crime dates back at least to the 1970s when its diplomats based in the four Scandinavian countries were reselling tax-free alcohol and cigarettes.

Diplomatic bags were frequently abused for the purposes of smuggling drugs produced in North Korean factories, beginning with heroin and opium but diversifying in the late 1990s into crystal metamphetamine or “shabu”, the most popular drug in Japan, South Korea and South East Asia.

In 2003, Australian coastguards seized the North Korean boat Pong Su after it dropped off 150kg (330lb) of heroin at a beach in Victoria.

Even harder to pin down are the counterfeit $100 bills known to law enforcement agencies as Superdollar.

US security services have seized $50 million of the counterfeits since they began appearing 1989, of a quality so high that they are often detected only when they reach the Federal Reserve.

Sean Garland, the leader of the Official Irish Republican Army, a Marxist splinter group of the IRA, is presently fighting extradition from Ireland to face charges in the US that he purchased and distributed North Koran supernotes in Belarus, Russia and Ireland.

North Korean factories are reckoned to produce 41 billion fake cigarettes a year, for sale in China, Japan and the US.
In the past ten years at least six North Korean diplomats have been expelled from Africa for smuggling elephant tusks and rhinoceros horns.

Indentured labourers are exported to Russian logging camps and Czech factories as cheap labourers, in wretched conditions. Last year the FBI arrested 59 people at an elaborately staged fake gangster wedding, breaking a Chinese-North Korean racket which sold tens of millions of dollars of contraband every year, including forged notes, postage stamps, tax stamps for cigarettes, Viagra and AK47 assault rifles.

Most difficult to police is the North Korean arms trade — because, as big Western governments know better than most, the lucrative arms trade is not a crime. The US Government estimated that North Korea’s sales of rockets, missiles, parts and technology amounted to $560 million.

In 2002 the Spanish Navy boarded a North Korean ship carrying Scud missiles to Yemen — but had to let it go because it was operating perfectly legally.

A US Senate hearing last April concluded that income from these operations amounted to between $500 million and $1 billion a year.

“These extracurricular revenue streams allow North Korea to balk at participation in negotiations,” Tom Coburn, the chairman of the hearing, said. “Economic pressure is the civilised world’s only real leverage.”

If Kim Jong Il is ever to be forced to the negotiating table it is these sources of income that must be cut off.

“It will take a lot international co-operation, and it will take time,” says Song Young Sun, a South Korean MP and security expert. “It will not kill Kim Jong Il with a single shot. But if it works, it will slowly dry him to death.”

From AFP:
10/9/2006

The US already has broad sanctions in place against North Korea, giving it little additional economic and trade leverage to bring to bear following Pyongyang’s defiant nuclear test explosion.

Washington imposed a near total economic embargo on North Korea at the start of the Korean War in June 1950, only beginning to ease the sanctions slightly from 1989 amid efforts to draw the reclusive Stalinist regime into the international community.

A series of measures aimed at encouraging North Korea to not develop nuclear arms culminated in a June 2000 Executive Order legalizing most transactions between US and North Korean nationals.

The order allowed many products to be sold to North Korea, though sanctions affecting trade in military, so-called dual-use and missile-related items remained in place.

But imports from the country remain under tight restrictions, managed by the Treasury Department’s Office of Foreign Assets Control, and North Korean assets frozen since 1950 remained frozen.

While restrictions on US investments in North Korea and on the travel of US citizens to North Korea were also eased under the 2000 measure, the two countries have no formal diplomatic relations and have never officially ended the Korean War.

Most forms of US economic assistance, other than purely humanitarian aid, remain prohibited and North Korea does not enjoy “Normal Trade Relations” with the United States, so allowable exports are hit by high tariffs.

The State Department acknowledges that “US economic interaction with North Korea remains minimal” and that Washington’s leverage over the reclusive regime is limited.

“There’s not a lot to grab hold of,” commented a senior State Department official about the hunt for ways to impact the North Korean economy bilaterally.

North Korea receives the bulk of its imports over the Chinese and Russian borders and relies on hefty aid from South Korea, giving those three governments far greater potential leverage in economic sanctions.

Washington did find one powerful pressure point last year when the Treasury Department slapped sanctions against a Macau-based bank, Banco Delta Asia, which US officials charged was the main conduit for bringing North Korean counterfeit dollar bills into the international system.

Washington and its allies have long contended North Korea uses counterfeiting, drug trafficking and sales of weapons to prop up its ailing economy.

The US decision to designate the Banco Delta Asia a “primary money-laundering concern” left the bank teetering and could foreshadow similar action targetting other financial transactions by the North.

Many analysts pointed to the banking sanction as possibly the main reason North Korea went ahead with its nuclear test shock at this time.

The North Koreans were “feeling under a great pressure from the United States and the sanctions that were being imposed, particularly the financial sanctions,” said David Albright, a former UN nuclear weapons inspector.

“I think this test is coming from that sense of being backed into a corner,” he said.

From the Choson Ilbo:
9/26/2006

N.Korean Ship With Contraband Cigarettes Nabbed
 
Officials in Greece nabbed a North Korean freight vessel that was carrying 1.5 million cartons of contraband cigarettes and arrested the seven seamen aboard, it was announced Monday. The ship’s load would have brought 3.5 million euros in taxes.

The Greek Merchant Marine Ministry said the vessel was discovered about 11 km southwest of the Katakolo port on the Peloponnesus Peninsula in southern Greece, and all of the cargo looked bound for that country. The Evva is currently anchored at the Katakolo port. Greece has uncovered 4 million cartons of contraband cigarettes at sea so far this year, of which 3 million were aboard North Korean vessels.

From the Korea Herald:
9/10/2006

The United States has had some success in limiting North Korea’s export of missiles by persuading other countries not to buy them, a senior administration official says.

Washington has long sought to stop such sales and stepped up its initiative after Pyongyang tested a string of missiles in July, including a long-range missile.

“As a direct result of our policies, we have cut off North Korea from several of its customers for ballistic missiles,” Robert Joseph, the Bush administration’s top nonproliferation official, told Reuters.

“We have made it more difficult for the North to ship missiles and have made it more likely that these shipments will be exposed. The risk of exposure further turns off customers,” he said in a recent interview.

He said Yemen committed not to buy more North Korean missiles after taking delivery of a shipment of 15 Scuds in 2002 and Libya promised to forgo North Korean missiles as part of a 2003 agreement in which it abandoned its weapons of mass destruction and missile programs.

Some U.S. officials say Pakistan and Egypt also are no longer buying from Pyongyang, leaving Iran and Syria as the major missile customers.

Some other U.S. officials and experts are skeptical of the effectiveness of the Bush administration policy.

Jonathan Pollack, chair of the Asia-Pacific Studies Group at the U.S. Naval War College in Rhode Island, welcomed the close scrutiny the U.S.-led program had brought on North Korea’s activities but said the results were difficult to measure and it was probably too soon to draw firm conclusions.

The U.S. strategy includes a crackdown on banks that aid the North’s illicit activities and the “proliferation security initiative” in which some 88 member nations share intelligence and practice interdicting weapons shipments.

In addition, potential buyer nations now may find their U.S. aid curtailed if they buy weapons from North Korea. Pakistan, Iraq and Egypt are major recipients of U.S. assistance.

After Pyongyang tested seven missiles in July, the United Nations called on countries to avoid supporting the missile program. Missile sales earn the impoverished state hundreds of millions of dollars in hard currency.

One long-range missile crashed soon after launch during the July tests, but the other medium range missiles hit their target areas, U.S. officials and experts said.

U.S. Defense Secretary Donald Rumsfeld has said North Korea – which claims itself to be a nuclear weapons power – is more dangerous as a proliferator than as a military threat to neighbor South Korea.

Pyongyang has been working on missile production for three decades and is the leading supplier of ballistic missiles to the developing world, experts say.

The chief exports are variations of Soviet-origin Scud missiles, regarded as fairly reliable and accurate but based on technology advanced military powers would consider obsolete.

North Korea’s oldest and most loyal customer has been Iran, which helped finance Scud development, according to various U.S. studies. The connection dates to the Iran-Iraq war of the 1980s when Pyongyang tested and shipped missiles to Tehran.

North Korea, as well as China, provided ballistic missiles, cruise missiles and their production facilities to Iran, Iraq, Syria and Egypt, U.S. government reports say. Libya and Pakistan have also been missile customers.

Arms connections between North Korea and Iran are very strong, with the former regime being the main supplier of ballistic missile technologies to Tehran, a senior U.S. nonproliferation official said Wednesday.

Undersecretary of State Robert Joseph, in charge of arms control and international security, was cautious about going into intelligence.

“But I can say that the connections between North Korea and Iran are very strong,” he said at a news conference with the foreign press.

“And North Korea has been, I think, the principal supplier to Iran of ballistic missile technologies,” he said.

Suspicions about exchanges of personnel, technology and equipment between Pyongyang and Tehran on missile development date back decades. Joseph noted that a number of revelations about such ties have already been made public.

From the Choson Ilbo
8/28/2006

A Californian man indicted on charges of smuggling counterfeit dollars into the U.S. testified at his trial that the high-quality counterfeit US$100 bills or “supernotes” were manufactured in North Korea, the National Intelligence Service said Monday. The NIS reported to the National Assembly’s Intelligence Committee that the man admitted conspiracy to smuggle the supernotes and admitted where the phony bills were made.

The man is a Chinese-American named Chao Tung Wu, the NIS said. There have been reports in the U.S. media quoting anonymous government officials as saying the supernotes were made in North Korea, but this is the first time the claim was confirmed in legal testimony by a chief suspect.

A joint taskforce of the FBI, the CIA, the Justice Department and the Treasury conducted secret investigations and rounded up 59 suspects around the U.S. on charges of smuggling counterfeit dollars and cigarettes in August last year. The taskforce worked under the code name “Smoking Dragon” and “Royal Charm” between 1999 and 2005. It alleges suspects attempted to smuggle millions worth of forged dollars and some $40 million worth of counterfeit cigarettes.

The case drew much publicity not only because of its sheer scale but also because of North Korea’s suspected involvement. The Treasury Department led the investigation that ended up designating Macao’s Banco Delta Asia as Pyongyang‘s “primary money laundering concern” on Sept. 15 last year, a month after the suspects were arrested.

“We should note that talk of political solutions between the U.S. and North Korea over the counterfeit dollars disappeared in South Korea and China since the end of last year,” a diplomatic source in Seoul said. Some until then claimed the U.S. was pressuring the North without clear evidence, but they lost their ground as Washington acquired evidence to support North Korea’s involvement.

The trial is likely to take one or two years, a diplomatic source said. If it ends with a guilty verdict for the main suspect for smuggling made-in-North Korea supernotes, it would get Pyongyang into serious trouble on the global stage. The North denies the charges and says the resulting sanctions amount to “theft.” The communist country in a statement last Saturday said the U.S. has produced no clear evidence so far. But the suspect’s guilty plea undermines the credibility of that claim.

From the Korea Times:

North Korea has recently changed its means of selling missiles to avoid interception, delivering them by air instead of by sea and in the form of components and equipment rather than complete products, a U.S.-based research organization said yesterday.
In its latest report, the Center for Nonproliferation Studies (CNS), headquartered in Monterey, California, said North Korea’s missile program appears to be under the command and control of its air force, not the army, an arrangement similar to Iran, which is believed to be buying missiles from the communist regime, according to the Yonhap News Agency in Seoul.

The report, called “CNS Resources on North Korea’s Ballistic Missile Program,” said that as Western opposition to the deliveries has increased, Pyongyang’s shipments have begun to be made by air rather than by sea, sometimes with the help of Moscow.

“Insome instances, this has been accomplished with private-sector Russian assistance, thereby calling into question the Russian government’s ability and/or willingness to control North Korea’s missile proliferation,” said the report.

The CNS Web site says the report was updated Aug. 11 this year.

North Korea also resorted to selling missile components and production equipment to clients, which include Iran, Pakistan and Syria, the report said.

“These changes will allow more rapid shipping deliveries, and interception of such shipments will become more difficult,” it said.

The CNS noted with interest that North Korea’s ballistic missiles appear to be under air force, not army, command and control.

It was Gen. Jo Myong-rok, then commander of the North Korean Air Force, who led a delegation to Iran in February 1994 to discuss testing of the Rodong missile in Iran, the report said.

“It should also be noted that Iranian ballistic missiles fall under the command and control of the air wing of the Iranian Revolutionary Guard Corps,” it said.

North Korea’s missile program came under renewed scrutiny after the secretive regime test-fired seven missiles last month, ranging from versions of its short-range Rodong to its long-rang Taepodong presumed to be able to strike the U.S. west coast.

The CNS said that while the test launches suggest advances in North Korea’s missile capabilities, there are still several technical hurdles before the long-range versions can be fielded.

“The developmental leaps to successful multiple stage systems using large rocket motors cannot be achieved without external technological assistance,” it said.

“Some of this assistance is probably being provided by Russian specialists, both in North Korea and Russia,” said the report, due mainly to Moscow’s inability to completely halt the leakage of information.

It added that while the shorter-range Rodong missiles are operational, since it has exported some to Iran, Pakistan and other nations, “it may not have enough missiles to field a full brigade.”

From Kyodo News:

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

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

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

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

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

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

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

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

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

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

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

from the Joong Ang Daily:

North funds lose havens in sanctions
8/24/2006

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

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

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

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

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

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

From Yonhap:

Vietnam already shut down N.K. accounts in past few weeks: ICG Seoul director
8/22/2006

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

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

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

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

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

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

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

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

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

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

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

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

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

From the Joon Ang Daily:

Ties sour at North’s China border

Signs of discontent between those two closest of allies, China and North Korea, have begun to appear. Last month, despite Chinese urging, North Korea fired off a test salvo of seven missiles. Although the tests were generally considered to be a bid for international attention, they provided Japan with more domestic ammunition to change its constitutional bar on warfare as an instrument of national policy, a development China does not see as in its interests.

Some suggestions of those cooling ties can be seen in this Chinese border city. Recently, about 40 North Korean women were waiting in front of the customs office in preparation for returning to North Korea. One of the women said Chinese authorities had order the women, who had worked at a stuffed-toy factory, out of the country.

“We received a three-year approval originally to work there, but after less than a year we are going back,” the woman said. Customs officials said the women were working illegally, but other people here were skeptical. One noted that many Russians have no problems because of a lack of work papers. “When relations between China and North Korea were good, there were no problems,” one said. “These incidents are in line with the cooling ties in light of the North Korean missile launch.”

In all, about 300 North Koreans have been told to leave Dandung for their homeland. The head of a trading company here, who has been dealing with North Korea for 10 years, said another 300 North Koreans will be sent home from Dandung within a month.

A source in Beijing said the Labor Ministry headquarters told its subordinate offices earlier this month not to issue work permits to North Koreans who carry passports and visas issued to government officials. “In the past, these people were allowed to work, and given the fact that they already have a visa, this measure is probably a retaliatory move by Beijing,” this source said.

A South Korean trader with ties to the North and China said that custom checks at the border have been increased, resulting in longer delays in shipping goods. The Dandung Customs Office said concerns about drug trafficking was the reason for stepped-up measures, an explanation that some residents here say has no precedent.  

From the Daily NK:
8/17/2006

National Defense Commission’s Inspection Task Force Dispatched to Sino-Korean Border
By Kim Young Jin, Yanji of China
 
An inspection task force under the National Defense Commission (NDC) is deployed on the Sino-Korean border in order to review border security and to check defection from North Korea to China.

Kim Choon Il (a false name), a 36-year-old defector living in South Korea since 2003, said on Wednesday that in a telephone conversation with his family in North Korea on Tuesday, he was told that NDC’s inspection team came to the border area since the end of last July and inspection became much tighter.

Kim also said that the inspection task force, cooperating with local Workers’ Party office, National Security Agency, and police, blocked the Sino-Korean border.

This inspection task force is under the control of the highest state organ NDC, which surpasses the power of other previous inspection squads organized under the lesser authority.

Since the task force is directly responsible to Kim Jong Il, it is expected that the task force is granted some specific inspection guideline.

The NDC inspection squad was deployed after the UN resolution on North Korean missile crisis was passed. Also it was immediately after a flood killed thousands and created hundreds of thousands victims who lost their homes.

Dispatch of the inspection team is a measure against infiltration of outside ideology and culture and also to prevent massive defection due to recent internal and external crises.

North Korean authority sent a party inspection team to the border area in 1992 after China and South Korea normalized diplomatic relationship. Also, as the number of defectors increased since then, another inspection team under the combined control of five departments (army, security agency, prosecutor’s office, police and party) was sent.

NDC’s dispatch of an inspection task force represents the highest authority’s distrust of previous inspection teams’ activities. It’s been pointed out that due to corruption and bribery previous inspection squads were unable to root out crimes.

According to inside sources, NDC inspection task force’s primary mission is to thwart defection, leak of documents, infiltration of outsiders, guns trafficking and any other anti-socialist activities. It is confirmed that in Sino-Korean border area not only drug and counterfeit dollar bills but also guns and ammunition are smuggled.

The informant also reported that it is ordered illegal defectors and their families to be deported, and infiltrators from outside and missionaries to be executed publicly.

According to Han, a defector living in Inchon, South Korea, who is aiding North Korean refugee in China, among those who suffered flood, an increased number of them wants to escape to China or South Korea.

Daily NK
Yang Jung A
8/21/2006

Vietnam, 1 of 10 Countries with North Korean Accounts

After the U.S. financial sanctions last year, the Kim Jong Il regime has set-up accounts with 23 banks from 10 countries including Vietnam, Mongolia, Thailand and Russia. The U.S. now sends a warning to countries with financial relationships with North Korea.

On the 20th, U.S. data and analytics provider ‘Bloomberg’ published a report by Professor Lee Young Hwa of Japan’s Kansai University, stating that Vietnam has set-up at least 10 accounts with North Korea.

Furthermore, the report stated that North Korea has established accounts with other South-East Asian countries and parts of Europe.

Professor Lee said “Through counterfeit money, fake cigarettes and illegal acts, North Korea is not conducting lawful trade nor initiating proper bank accounts. This report depicts the true melancholic situation of North Korea.”

After his visitations to South Korea, Vietnam and Singapore, on July 18th-19th, U.S. Secretary for Terrorism and Financial Intelligence (TFI) Stuart Levey, informed Bloomberg’s to alert and warn countries with financial ties to North Korea.

Following the U.S. warning, Vietnam Central Bank began investigations on Vietnam’s City Bank accounts with North Korea.

In addition, on the 19th a newspaper Sankei Shimbun also reported that 23 banks of 10 countries had established financial accounts with North Korea.

The newspaper which cites news and issues on North Korea, reported that Vietnam, Mongolia and Russia were a few of the 10 countries associating with North Korea.

Further, the newspaper revealed that the U.S. is insisting that it would freeze banks in order to intervene in North Korea’s transfer of funds,

U.S. authorities say that the affect of the U.S. financial sanctions was stronger than the affect of Banco Delta Asia. As a result, it appears that North Korea began to instigate accounts with countries in South-East Asia in which it already has international relationships.

It was reported that North Korea began to use hidden personal identities to open accounts so as to avoid regulations and account freezes.