North Korea Mobilizes Private Traders to Bring in Foreign Cash

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Goods bound for North Korea are shown at a customs checkpoint in China in a file photo.
Goods bound for North Korea are shown at a customs checkpoint in China in a file photo.

North Korean state trading firms tasked to earn foreign currency for cash-strapped Pyongyang are evading U.N. sanctions by setting up regional branches run by private businessmen who turn over a share of their profits, sources say.

The sanctions, imposed in August by the world body to punish North Korea for its nuclear weapons and missile tests, prohibit the country from exporting coal, iron, seafood, and other goods, but much is still being sold abroad to earn foreign cash, sources say.

With cross-border trade becoming more difficult, though, North Korea is resorting to “desperate measures” to increase its volume of business by mobilizing private merchants, a source in North Korea’s North Hamgyong province told RFA’s Korean Service.

These merchants now work out of newly forming regional branches of Pyongyang-based and government-run trading firms such as Daesung, Chilsong, and Unha, RFA’s source said, speaking on condition of anonymity.

“These branches are organized as state-run foreign currency generating firms, but if you look at them closely, they are just groups of private trade merchants operating under the names of the trading companies,” the source said.

And once these traders are brought into the state-run or military corporations, they are entitled to privileges like using official company documents to travel to China, the source said.

“Foreign currency generating firms under the military use military code for their regional branches, but use titles intended for public viewing on their official travel documents,” the source said.

“The headquarters of the military firms use three-digit codes such as 600 or 100, and their branches use two-digit codes such as 80 or 90.”

Traders employed by the newly opened branches are now all private merchants, a second source in North Hamgyong told RFA, also speaking on condition he not be named.

“The [state-run] trading groups used to give them a hard time, but now they are allowing anyone to become a trade worker as long as they have a connection to China,” he said.

“The newly established foreign currency generating firms support the trade merchants’ work much more than the old firms did. Once contact is established with a Chinese partner, they are easily granted approval,” he said.

Reported by Jieun Kim for RFA’s Korean Service. Translated by Leejin Jun. Written in English by Richard Finney.





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