North Korean Phone Brokers Take Huge Risk to Resume Remittances

The government crackdown is as intense as ever, but people are becoming desperate, including the brokers themselves.
North Korean Phone Brokers Take Huge Risk to Resume Remittances North Koreans read reports about the country's leader Kim Jong Un's arrival in Vietnam for his second summit with the U.S. President Donald Trump by using a smartphone in Pyongyang, North Korea, in this photo released by Kyodo February 27, 2019.

Despite a harsh crackdown on contacting people outside the country, people who facilitate overseas remittances in North Korea are returning to work at great risk as the economic situation in the country worsens, sources in the country told RFA.

Phone brokers make a living by putting North Korean families in touch with relatives who have escaped the country. They provide a channel for which the escapees can send money, usually through China, to their families inside North Korea.

The brokers usually charge fees as high as 30 percent of the remitted amount for taking on the risk. But since the start of the coronavirus pandemic in January 2020, the North Korean government has been cracking down on any and all contact with people outside the country, especially in the border regions, where the brokers use their Chinese cell phones on the Chinese cellular network.

Though the risk is now higher than usual, families who depend on remittances from abroad have no other choice but to try to get money from overseas as a matter of survival, sources said.

“Phone brokers who make connections between North Korean refugees and their families in North Korea and set up money transfers between them have resumed their activities here in Ryanggang province these days,” a source from the central northern province told RFA’s Korean Service Aug. 24.

“The reason why they have no choice but to resume their work in the face of harsh crackdown and the threat of severe punishment is because the refugees’ families and the brokers themselves are going through severe economic hardship,” said the source.

According to the source, the entire country has been affected by more than a year and a half of economic hardship brought on by the coronavirus.

North Korea in January 2020 closed down its border with China and suspended all trade, a move which devastated the entire economy. Food prices have gone up as shortages become more pronounced with no imports to cover the gap.

Recent flooding has only made the situation worse, and people are more desperate than ever to get money to survive in any way that they can.

“For North Korean refugees’ families who cannot get help from anyone here, their family members in South Korea or China are their last resort,” said the source.

“It seems like residents who have family members who have escaped the country and settled abroad are determined to risk their lives to contact them and get help, rather than dying of hunger,” the source said.

And as the authorities have stepped up their crackdown on refugee families and phone brokers, most of the brokers disappeared for a while.”

Returning to work

But now they are returning to work, requesting more for the increased risk.

“They are resuming their phone connection services, but the remittance fee, which used to be 30 percent of the total amount is now 50 percent,” said the source.

“Although the remittance fee has risen so much, the families of the refugees are begging the brokers to connect with them, even saying they are fine with getting only half of the money being sent to them. The brokers also have a hard time making a living, so they cannot help but take the risk,” the source said.

The source said that the authorities are working hard to maintain the crackdown by increasing surveillance over the border area, but the residents will still find a way to call out because of their will to survive.

Another source, from the northeastern province of North Hamgyong, confirmed to RFA on Aug. 23 that brokers there were returning to work at great risk.

“Thanks to them, a significant number of residents have been able to escape dire living situations with the help of their relatives abroad,” said the second source.

“It’s very different from last year when the brokers were making personal appeals to the refugee families to peddle their services. Now the families are seeking out the brokers, albeit cautiously because of the crackdown.”

'It's a risky job'

Though many of the brokers have been in the industry for a long time, newcomers from other areas of the country have moved to the border region, lured by the high brokerage fees, according to the second source.

“It’s a risky job, but a lot of the new brokers are people who have no other way to make money in a difficult time like this,” the second source said.

“A broker in his 20s, who first started working at the beginning of this month, was able to connect a 30-something man in Hwanghae province with his brother in South Korea," the source said.

"When the brother in the South heard that his family in the North was in big trouble, he quickly sent them 6,000 yuan (U.S. $927). The broker got to keep 50 percent, so he earned a huge amount for just the one transaction."

The high fees are becoming more standard as people become more desperate, according to the second source.

“Even though brokers are aware of the potential dangers, they cannot stop working because they are themselves in a terrible economic situation,” the second source said.

While the exact number of illegal phone users in North Korea is unknown, the Database Center for North Korean Human Rights, which interviewed 414 North Koreans in the South, reported that 47 percent of them were in constant contact with their families in the North in 2018.

Of those, about 93 percent said they called their families on the phone.

In the same survey, 62 percent said they had sent money to North Korea. Based on their answers, the center estimated that refugees in the South who send money to North Korea do it about twice per year, sending around 2.7 million South Korean won (U.S. $2,260) each time.

Each time they had to pay an average broker fee of almost 30 percent.

According to South Korea’s Ministry of Unification, more than 33,000 North Koreans have settled in South Korea since 1998, though only 229 entered the South last year due to the coronavirus pandemic.

Reported by Jeong Yon Park for RFA’s Korean Service. Translated by Jinha Shin and Leejin Jun. Written in English by Eugene Whong.


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