Illicit activities « North Korean Economy Watch

Archive for the ‘Illicit activities’ Category

Kiribati issued passports to North Korean

Wednesday, March 13th, 2013

According to the Choson Ilbo:

The tiny South Pacific island nation of Kiribati issued passports to North Korean businessmen until 2004 as a “means of generating revenue,” its president has admitted.

There had been speculation for some time that North Koreans engaged in illicit activities such as arms deals were illegally obtaining passports from small countries.

Appearing recently on Australian radio, Kiribati President Anote Tong said he was embarrassed that the passports were reportedly related to international crime. “I can assure you that we had corrected that situation in 2004 when we stopped issuing these passports,” he said.

Late last year, a Japanese activist group said two agents from North Korea, Han Chol [한철] and Ju Ok-hui [주억희), used passports issued by Kiribati and the Seychelles.

They are board members of North Korea’s Tongsin International Trading Corporation, an agency suspected of illegally exporting weapons to Burma and other countries, the group added.

Both Han and Ju were given passports by the Kiribati government in 1996 and by the Seychelles in 2007. The countries reportedly sold passports to foreign businessmen but abandoned the practice due to mounting worries about illicit activities.

A Foreign Ministry official in Seoul said, “Kiribati has been neutral since it won independence from the U.K. in 1979. “It would have been easier for the North Korean agents to travel with those passports rather than with North Korean ones.”

Read the full story here:
South Pacific Island Admits Selling Passports to N.Koreans
Choson Ilbo
2013-3-13

Posted in Arms shipment, Illicit activities, International trade, Tongsin International Trading Corporation | Comments Closed

DPRK illicit trade activities

Monday, March 11th, 2013

Marcus Noland offers a new estimate of the DPRK’s illicit trade activities:

According to Marcus Noland:

The chart above shows our estimates of illicit revenues (inclusive of arms sales) as a share of merchandise exports. These are admittedly highly speculative and as a consequence we include high and low estimates as well as a best guess. As one can see, this share has been drifting down for more than a decade as both legitimate trade has expanded, and intensified interdiction efforts have crimped criminal activities. We estimate that in 2011, the illicit share of exports was in the range of 5-20 percent, with our best guess at roughly 10 percent. During the hearings, one of the witnesses, Professor Sung-yoon Lee, claimed that illicit activities account for up to 40 percent of the country’s trade; that statement was probably true in the past, but on our calculation, probably no longer true—though again, all this is highly speculative and anyone who claims that they know the real answer is, in the words of former Vice President Mondale, “a liar or a fool.”

A related issue is the degree to which central authorities exercise control over these activities. Some activities are almost surely subject to central control; some are probably conducted by state entities but without direction from central authorities (or perhaps without even their specific knowledge); some of these activities may well be conducted by what amount to local criminal gangs (which may include state, military, or party officials as participants); some of these activities may be organized by Chinese or other foreign gangs with the acquiesence of North Korea officials. Several years ago, for instance, when their was a crackdown no intellectual property rights theft in China, some of the counterfeiting activity allegedly moved across the border into North Korea where control was more lax.

The message is not that we should slack off in our attempts to eradicate these activities. Even they account for a declining share of the North Korean economy, they are still objectionable. But by the same token, we should not make the analytical mistake of thinking that shutting down these activities will halt the North Korean nuclear program or bring down the regime. The real message here is that the expansion of legitimate trade in recent years has made North Korea less dependent on criminal activities and less vulnerable to their disruption.

Posted in Arms shipment, Counterfeiting, Drug smuggling, Illicit activities, International trade | Comments Closed

2013 International Narcotics Control Strategy Report

Thursday, March 7th, 2013

It has been a while since much attention was focused on the DPRK’s capacity to produce narcotics for export, however, the DPRK did get a mention in the US Department of State’s 2013 International Narcotics Control Strategy Report.

Here is what the report had to say (Source here):

Democratic People’s Republic of Korea (DPRK or North Korea)

Drug use may be rising within the Democratic People’s Republic of Korea (DPRK or North Korea), according to reports from DPRK refugees and travelers to North Korea. Chinese and South Korean press reports indicate that a substantial volume of methamphetamine continues to be produced within DPRK territory, mainly for transshipment to China. There are also reports of transactions between DPRK traffickers and large, organized criminal groups along the DPRK-China border, and of Chinese police enforcement targeting drugs entering China from the DPRK by way of enhanced patrols, periodic arrests, and drug seizures. However, the Chinese government rarely identifies the DPRK as the source of illicit drugs.

The proximity and availability of precursor chemicals in China likely contribute to the production of methamphetamine within North Korea. Reliable information is difficult to obtain regarding illicit activities within the DPRK territory, but drug production and other criminal activities, such as the counterfeiting of cigarettes, appear to have continued in 2012. There is insufficient current information, however, to confirm official DPRK state involvement in drug trafficking. There have been no confirmed reports of large-scale drug trafficking involving DPRK state entities since 2004. This suggests that state-sponsored drug trafficking may have ceased or been sharply reduced, or that the DPRK regime has become more adept at concealing state-sponsored trafficking of illicit drugs.

Despite the absence of reports of drug seizures linked directly to DPRK state institutions, the United States cannot entirely rule out the possibility of official DPRK state involvement in the manufacturing and trafficking of illicit drugs. A relatively large investment in precursor chemicals is necessary to produce the volume of methamphetamine trafficked from North Korea, and it is unclear how individual criminals could independently organize such activity within such a tightly-controlled state. It is likely that some official corruption on both sides of the DPRK-China border facilitates drug trafficking.

Posted in Drug smuggling, Illicit activities, USA | Comments Closed

DPRK ships missile parts to Syria

Wednesday, November 14th, 2012

According to the Korea Herald:

A shipment of graphite cylinders usable in a missile program and suspected to have come from North Korea was found in May aboard a Chinese ship en route to Syria in what appears to have been a violation of U.N. sanctions, diplomats said Tuesday.

South Korean officials seized the shipment of 445 graphite cylinders, which had been declared as lead piping, from a Chinese vessel called the Xin Yan Tai, U.N. Security Council diplomats told Reuters on condition of anonymity.

South Korean authorities stopped the ship at the South Korean port of Busan, the envoys said, adding that the cylinders were intended for a Syrian company called Electric Parts.

South Korean officials informed the Security Council’s North Korea sanctions committee about the seizure on Oct. 24, the envoys said, adding that China had offered to help investigate the circumstances surrounding the incident.

“It appears the cylinders were intended for Syria’s missile program,” a diplomat said.

“China assured us they will investigate what looks like a violation of U.N. sanctions.” Diplomats said the graphite cylinders appeared to be consistent with material usable in a ballistic missile program and that South Korea would investigate the case with China.

The shipment to Syria was arranged by a North Korean trading company, diplomats said. One diplomat said the Syrian company that was to have received the cylinders may be a subsidiary of the North Korean trading firm.

North Korea is barred from importing or exporting nuclear and missile technology under U.N. Security Council sanctions imposed on Pyongyang because of its nuclear tests in 2006 and 2009.

Read previous posts about the DPRK and Syria here.

Read the full story here:
Suspected N.K. missile parts seized en route to Syria
Korea Herald
2012-11-14

Posted in Arms shipment, Illicit activities, International trade, Manufacturing, Military, Sea shipping, Transportation | Comments Closed

DPRK and the ivory trade

Sunday, October 14th, 2012

As is well known, North Korean embassies self-finance their operational revenue and salaries. They also remit funds back to Pyongyang. As far as I am aware, the DPRK may have the only foreign service that is not a drain on the treasury.

Many times, however, the operations in which DPRK officials get involved take palce in the gray and black markets. I have previously posted about this here, here, here, here, here, here.

This weekend, news surfaced that a North Korean was involved in trading elephant ivory in Africa. According to AllAfrica.com:

The Mozambican customs service on Thursday seized 130 items of carved ivory, valued at about 36,000 US dollars, that a North Korean citizen named Jong Guk Kim was attempting to smuggle out of the country.

According to a press release from the Mozambican tax authority (AT), Jong was returning to Korea, via South Africa, and had already checked in for his flight, when customs officers intercepted him in the departure lounge of Maputo International Airport, and demanded that he open his hand baggage.

The ivory was hidden in several plastic bags. The 130 carved pieces weighed about three kilos.

Ivory can only be exported with the authorisation of the Ministry of Agriculture – if, as seems more than likely, Jong Kim has no such authorisation, the ivory will be confiscated and revert in favour of the state.

The Korean was also carrying 133,300 US dollars in banknotes in his hand baggage. Under current Mozambican exchange regulations, the maximum that anyone can take out of the country without declaring it is 10,000 dollars.

Anything above this sum must be authorised by the Bank of Mozambique.

Jong Guk Kim must now explain how he obtained this money. If he can prove that it came from a legitimate source, he will be allowed to export it – but only through normal banking channels.

The AT also revealed that it had recently seized in Maputo, seven rhinoceros horns, and about a tonne of abalone. Abalone is a genus of marine mollusks, threatened with extinction, due partly to overfishing, and partly to acidification of the oceans arising from climate change.

The abalones seized in Maputo probably came from South Africa. Abalones occur along much of the South African coast, and the South African authorities require permits for any export of this shellfish.

A tonne of abalone is valued at about five million dollars. It is believed that the ultimate destination of the Maputo abalone was Hong Kong.

I tried to locate the press release by the Mozambique Tax Authority but was unsuccessful.

Read the full story here:
Mozambique: North Korean Caught Smuggling Ivory
AllAfrica.com
2012-10-12

Posted in Illicit activities, International trade, South Africa | Comments Closed

Chinese customs confiscate North Korean wildlife products

Monday, September 3rd, 2012

By Michael Rank

Pictured above: North Korean tiger bone wine in Rason tourist shop (Source here)

Chinese visitors to North Korea are increasingly bringing back endangered wildlife products, a Chinese website reports (http://www.#removed-for-malware-warning-external-site#idprkorea.com/news/news/view.asp?id=2446).

Between January and July this year Dandong customs have confiscated 137 bottles of tiger bone wine, five bears’ gall bladders weighing 172 grams and five boxes of powdered bears’ gall bladders weighing 50 grams.

It gave no further details but said such confiscations have increased with the growing numbers of Chinese tourists visiting North Korea. It noted that under China’s law on trade in endangered species traffickers can be fined or in more serious cases face criminal proceedings.

North Korea is known to have been involved in rhino horn smuggling in Africa and tiger bone wine is available in tourist shops in North Korea where it is popular with Chinese visitors on account of its alleged aphrodisiac properties. But it is not clear how much, if any, tiger bone the wine actually contains, or where it is derived from.

There is strong demand for bile from bears’ gall bladders throughout East Asia, with large numbers of bears being farmed for this purpose in China and South Korea, although the governments of both countries say the industry is coming under increasingly strict control. Little is known about bear farms in North Korea.

Posted in China, Environmental protection, Illicit activities, International trade, Tourism | Comments Closed

North Korea aiding Syria to upgrade Scud D capability

Wednesday, June 27th, 2012

According to IHS Janes:

In marked disregard of UN sanctions (Resolutions 1718 from 2006 and 1874 from 2009 both prohibit North Korea from conducting security-related exports), North Korean technicians and engineers stationed in Syria are working with specialists from Syria’s Scientific Studies and Research Centre (SSRC) to develop an arsenal of advanced SSMs. Co-operation between Pyongyang and Damascus also constitutes a Syrian violation of the same two resolutions, which, among other sanctions, include “an arms embargo, which also encompasses a ban on technical training or services”.

Nevertheless, IHS Jane’s has learned that engineers from North Korea’s Tangun Trading Corporation are working with engineers from the SSRC’s Project 99 in a compound located in Jabal Taqsis, near the city of Hama, to advance the Scud D development programme.

Read the full story here:

North Korea aiding Syria to upgrade Scud D capability
IHS Janes
Robin Hughes
2012-6-27

Posted in Arms shipment, Fiscal & monetary policy, Illicit activities, International trade, Military, Syria | 1 Comment »

Cyber attack capabilities and speculation

Tuesday, June 5th, 2012

According to the Joong Ang Ilbo:

North Korea was caught attempting cyberattacks on Incheon International Airport using viruses planted in game programs, according to the Seoul Metropolitan Police Agency.

A 39-year-old South Korean game distributor was arrested on Sunday for involvement and charged with violating the National Security Law. The National Intelligence Service helped arrest him, police said.

According to the police, the South Korean man, identified by the surname Jo, traveled to Shenyang, northeastern China, starting in September 2009 and met agents of an alleged North Korean trading company. He allegedly asked them to develop game software to be used in the South.

The North Koreans were actually agents from the North’s Reconnaissance General Bureau, and Jo was aware of that, police said.

Jo purchased dozens of computer game software for tens of millions of won, which was a third the cost of the same kind of software in the South. The games were infected with malignant viruses, of which Jo knew, an official at the police agency said.

Jo sold the games to South Korean operators of online games. When people played the games, the viruses used their computers as zombies, through which the cyberattack was launched.

So-called “a distributed denial-of-service attack,” this cyberattack against Incheon International Airport occurred two or three times in March 2011, police said. The attack was fended off by the intelligence authorities in the South.

The police and intelligence authorities also suspect that the North’s Reconnaissance General Bureau is behind a technical glitch in the flight data processor that paralyzed air traffic control at Incheon International Airport for nearly an hour last Sept. 15. It’s not clear if Jo’s viruses were linked. The glitch disrupted the departures of 18 airplanes from the airport. Initially, the Ministry of Land, Transport and Maritime Affairs said it wasn’t linked to North Korea.

AFP reports some slightly different details:

Cho, who was detained on May 23, sold the programmes to South Korean game operators, according to police.

They said the malicious software would paralyse users’ computers and steal personal information. It was not immediately clear how many computers may have been infected.

Cho is also accused of allowing North Korean agents to use his server for distributing denial-of-service (DDoS) attacks on the South’s online systems.

He is alleged to have kept personal information on hundreds of thousands of people from major portals at his home.

Read the full stories here:
Incheon Airport cyberattack traced to Pyongyang
Joongang Ilbo
2012-6-5

S. Korean held for selling N. Korean malware
AFP
2012-6-4

Posted in Computing/IT, Crime, Cyber attacks, Illicit activities | Comments Closed

122 ROK ships affected by GPS jamming

Thursday, May 31st, 2012

UPDATE 4 (2012-5-31): Three arrested in South Korea over GPS jamming. According to the Choson Ilbo:

Spies in South Korea were involved in North Korea’s recent jamming of GPS signals, police said Wednesday. The Seoul Metropolitan Police Agency said it booked or arrested three men on espionage charges of collecting confidential military information to help the North.

They include a businessman identified only by his surname Lee who was formerly a prisoner of war from North Korea, a Korean-New Zealander identified as Kim, and another man who formerly worked for a defense contractor.

Export of electronic jamming devices to some countries including the North is banned.

Lee and Kim, who are engaged in trade activities in Nampo, North Korea and New Zealand, are suspected of attempting to hand over GPS jamming devices and radar systems to Pyongyang at the direction of a North Korean agent.

Police say they have footage of their meeting with the agent and a statement from Kim saying he received an order from the North.

Read previous posts on this topic below:

(more…)

Posted in Arms shipment, Aviation, Illicit activities, Military, Ministry of Post and Telecommunications, Sea shipping, Transportation | 1 Comment »

Petrov on the Chinese boat situation

Saturday, May 26th, 2012

UPDATE: The PRC’s China Daily has published a timeline and related information on the “Hikacked” fishing vessel.

ORIGINAL POST (2012-5-25): Leonid Petrov writes in the Asia Times:

China often describes its relations with North Korea, its closest regional ally, as intimate but not substantial. For more than half a century, Beijing’s attitude towards the Korean Peninsula has revolved around the avoidance of three scenarios: “No new war on the Korean Peninsula”; “No regime change in North Korea” and “No American troops on the Sino-Korean border”.

But can the developments of recent weeks shake this strategic alliance tested by time, wars and revolutions?

Read the remainder of the article below…
(more…)

Posted in China, Illicit activities, Sea shipping, Transportation | Comments Closed

North Korean Economy Watch