Illicit activities of North Korea
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The alleged illicit activities of the North Korean state include
Overview
Unlike criminal syndicates, the extensive nature of these illegal endeavors, and the claim that they are directed and sanctioned by the highest levels of government,[4]: 1 has led to the nature of the North Korean state being defined as a form of "criminal sovereignty" by Paul Rexton Kan and Bruce Bechtol.[4]: 3
However, there are questions remaining about the level of government involvement in each of the criminal enterprises. Many commentators agree that the North Korean state has been behind counterfeiting currency, human trafficking, the arms trade, etc., but the level to which it has been involved in the drug trade after the collapse of the Public Distribution System in the 1990s is not clear as semi-private and private black markets have arisen since then and some high-ranking officials may only be engaged in illicit trade for personal benefit.[5]: 6
Critical assessment
The British academic Hazel Smith has argued that the allegations have a weak foundation, being largely based on the claims of a few US officials and North Korean defectors. She has pointed out that there have been very few criminal convictions. She has queried the assumption that all the activities are directed by North Korea's government.[6]
According to North Korea scholar Andrei Lankov, the country's illicit activities never developed into lucrative hard currency earners. Instead, these activities exposed the country to international condemnation in exchange for marginal gain. Lankov suggests that smuggling was never intended to earn currency for the regime, but was simply a means of survival for diplomats whose funding was cut.[7]
Room 39
Room 39 (or Office 39) is the primary government organization that seeks ways to maintain the foreign currency slush fund of North Korea's leader.[8] Room 39 oversees many of the government's illegal activities (although the military also has its own illegal activity division) such as counterfeiting and drug production. In 2010, the department was reported to have had 17 overseas branches, 100 trading companies and banks under its control.[9] By 2009, the office allegedly had upwards of $5 billion in assets, much of which was spread in banks throughout Macau, Hong Kong, and Europe.[10]
In August 2014, Yun Tae-hyong, a senior representative of North Korea's Korea Daesong Bank, which is suspected of being under control of Room 39,[11] was reported to have defected to Russia taking $5 million with him.[12]
In 2015, the European Union placed the Korean National Insurance Company (KNIC) under sanctions and added that the KNIC had links to Room 39.[13] The KNIC (which had offices in Hamburg, Germany and London, United Kingdom) was reported to have had assets of UK£787 million in 2014 and had been involved in scamming insurance markets and making investments in property and foreign exchange.[14][15]
Zainichi Koreans in Japan
The Japanese government accused the General Association of Korean Residents in Japan of conducting illicit trade and espionage on its soil to raise funds back to North Korea.[16][17][18]
Drug trade
It is alleged that North Korea's illegal drug trade dates back to the 1970s and includes the manufacturing, selling, and trafficking of illicit drugs, as well as counterfeit otherwise legal pharmaceuticals.[19] Production began in the mountainous Hamgyong and Ryanggang Provinces, particularly in the village of Yonsah, where Kim Il Sung sanctioned the creation of an opium farm.[5]: 20
To provide a cover of legitimacy, the North Korean government uses front companies, like the Ryugyong Corporation under the control of the Korean Workers Party's Foreign Relations Department, to conduct clandestine activities.[20] The company also holds large tracts of land within the country for the sole purpose of growing opium[1] and each year the company sent tens of thousands of dollars in hard currency to Kim Jong Il for his use. Unlike most companies, Ryugyong Corporation has no import or export quota restrictions.[20]
According to defector Yoon Yong-sol, during the famine "[t]here were some complaints that during the famine we should be growing grain, not poppies, but the instruction from the central government was that if we grow poppies we can sell the product for 10 times as much to buy grain. ... The only way to earn hard currency is by drugs."[5]: 22
Reports of methamphetamine (known as "ice drug" in North Korea) use in the country surfaced in the late 1990s.[21] According to Isaac Stone Fish writing in Foreign Policy, the production of methamphetamine in North Korea is done by chemists and other underemployed scientists.[21] Methamphetamine is often taken as a "medication" within North Korea, which has helped to fuel its spread. As the production and sale of opium declined in the mid-2000s, methamphetamine became more pervasive.[21] To bring in much-needed cash, the international methamphetamine trade began, spreading first to China, and with the drug being made in state-run laboratories.[22] However, Isaac Stone Fish admitted with regard to his report: "I have no idea what is actually happening inside North Korea".[23]
China officially admitted to the drug problem stemming from North Korea in 2004, with
In 2001, income from illegal drugs amounted to between $500 million and $1 billion.
Between 1977 and 2003, more than twenty North Korean diplomats, agents, and trade officials have been implicated, detained, or arrested in drug-smuggling operations in more than a dozen countries.
According to the Committee for Human Rights in North Korea, since 2001 drug trafficking operations by diplomats had ceased, with the focus then becoming the production of drugs to be smuggled by other criminal organizations.[5]: 18
In 2003, the North Korean owned cargo ship Pong Su was intercepted importing heroin into Australia. The ship was suspected of being involved in smuggling almost 125 kilograms (276 lb) of heroin into Australia with an estimated street value of A$160 million.[26] While four men who had landed pleaded guilty, the ship's four officers were acquitted on all charges.[27]
Counterfeiting
Currency
Counterfeiting currency is alleged to have begun in the 1970s under
The International Convention for the Suppression of Counterfeiting Currency is the primary treaty whereby states agree to criminalize acts of currency counterfeiting. North Korea is not a party to the treaty.[30]
Analyst Andrei Lankov has described the evidence for the counterfeiting of superdollars as merely circumstantial.[7] Gregory Elich of the Korea Policy Institute has argued that these allegations are unfounded. According to Elich, North Korea's intaglio press from the 1970s would be incapable of printing the supernotes, and the paper and ink would be extremely difficult for North Korea to produce. Furthermore, he says that the amounts of supernotes produced are too small to be economical.[31]
Counterfeit legal pharmaceuticals
There have been a few cases of North Korea being implicated in the production of counterfeit
Counterfeit cigarettes
Counterfeit cigarettes have been a lucrative item for the country. The trade is believed to have begun in the 1990s and greatly increased in 2002 after Chinese authorities shut down many counterfeit operations in China, which then provided added incentive, knowledge, and capacity which could be relocated to North Korea.[5]: 32 During a 2006 Congressional hearing, Peter A. Prahar of the Department of State quoted reports that mentioned the existence of "as many as 12" factories in North Korea capable of producing "billions of packs of counterfeit cigarettes annually."[32] The factories appear to be owned and operated by the North Korean military.[32] The major factories for cigarette production were reportedly based in Rason, though defectors also mentioned a factory in Pyongyang.[5]: 33
In 1995, Taiwan stopped a ship and confiscated 20 containers of counterfeit cigarette packaging, which is enough to make 2 million cartons of popular Japanese and British brands.
Human trafficking
North Korea is a "Tier 3" country (those who do not comply with human trafficking laws) as listed by the U.S. Department of State and has retained this ranking since 2007.
While the North Korean government claims these are "contract workers", reports claim that they are actually subjected to forced labor, that their movements and communications are subjected to strict surveillance, and that workers sent overseas do not have a choice in the type of work they will be doing nor do they receive pay for their work.[33]
It is estimated that there are thousands of North Koreans working in logging, construction, and agriculture industries in Russia. These workers reportedly only receive two days of rest each year and face punishment if they fail to meet quotas.[33]
North Korea is not a party to the 2000 UN
Arms trade
During the 1980s, North Korea emerged as a legal arms trader to primarily Third World countries, exporting relatively inexpensive, technically unsophisticated, but reliable weapons.[37] During the Iran–Iraq War, some 90% of arms exports from North Korea went to Iran, and between 1981 and 1989, North Korea earned an estimated $4 billion from arms sales.[37]
North Korea has a known track record in proliferating nuclear and missile technology and in 2001, missile sales came to $560 million.[1] Following its 2006 nuclear test, international sanctions have sought to limit or prevent North Korea from exporting various types of arms, materials, and technology.[38] Prior to UN sanctions however, countries such as Japan and the United States took unilateral steps to curb such activities.[1]
UN sanctions now ban all arms, including small arms and light weapons.[39]: 14 North Korea has developed an extensive and complicated arms trade network in an attempt to circumvent sanctions and uses front companies and embassies to traffic weapons.[40] In a 2014 UN report, Syria, Myanmar, Eritrea, Tanzania, Ethiopia, Somalia and Iran were all suspected to have bought weapons from North Korea.[40]
Incidents
As of 2010[update], trade in banned small arms and ammunition was relatively insignificant. Reports include: imports totaling $45,500 by Brazil in 2007, $3.1 million by the United Arab Emirates in 2006, $364,400 by Ethiopia in 2005, and $121,400 by Mexico in 2005.[39]: 14
In 2009, three vessels were intercepted which were carrying North Korean weapons. Western and Israeli intelligence officials believed the weapons were destined for Hezbollah and Hamas.[39]: 7
In December 2009, Thailand intercepted a charter jet from Pyongyang carrying 35 tons of conventional weapons, including
In 2012, the United Nations reported that 445 North Korean-made graphite cylinders (which can be used to produce ballistic missiles) were seized from a Chinese freighter at the South Korean port of Busan on their way to Syria.[38]
In 2013, a
In August 2016, US intelligence tracked a ship sailing under a
Wildlife trade
Over the past three decades, at least 18 North Korean diplomats have been caught smuggling
Evading sanctions
According to the United Nations Panel of Experts in April 2019, North Korea had developed a number of techniques and a complex web of organisations to enable it to evade the
In May 2019, the United States announced it had seized a North Korean cargo vessel for carrying a coal shipment in defiance of sanctions. The Justice Department said the 17,061-tonne Wise Honest is one of the North's largest cargo ships and it was first detained by Indonesia in April 2018 but is now in the possession of the United States.[46]
Politically motivated actions
As well as illegal money-making ventures, North Korea has been condemned for politically motivated criminal acts related to the long-running Korean conflict.
Terrorism
In 1988, North Korea was added to the
In 2017, North Korea was relisted as a terrorist state in response to the
International abductions
Between 1977 and 1983, North Korea abducted several Japanese citizens.[52] North Korea has admitted to abducting 13 Japanese citizens,[53] and Japan lists 17 as having been abducted.[54] There are also testimonies which list nine Europeans as being abducted by North Korea.[55]
The purposes of abduction ranges from using the abductees as translators/teachers,[56] to become wives,[57] and to obtain identities for other clandestine operations. During the Korean War North Korea abducted an estimated 82,959 South Koreans, and in the post-war period South Korea claims that a further 489 South Koreans have been abducted by North Korea.[58]
Hacking
According to cybersecurity experts, North Korea maintains an army of hackers trained to disrupt enemy computer networks and steal both money and sensitive data. In the previous decade, it was blamed for numerous
After the
Hacking has also emerged as an important source of income for North Korea.
In 2019, the UN panel of experts on North Korea released a report stating that $2 billion USD were raised through cybercriminal operations.[67]
International responses
The United Nations Security Council has passed multiple resolutions against North Korea and its weapons program including UNSC Resolution 825 (May 1993), UNSC Resolution 1695 (July 2006), UNSC 1874 (June 2009), UNSC Resolution 2094 (March 2013) and UNSC Resolution 2371 (August 2017). Were the international community to fully enforce UNSC 1874, it is estimated that North Korea would lose between $1.5 and $3.7 billion.[39]: 4
Since 1950, the United States has maintained an embargo against North Korea for their role in starting the Korean War. The embargo and related sanctions have been extended to combat North Korea's various illicit activities and continued aggression.
In 2005, under the
In 2010, US President
See also
- Kippumjo
- Human experimentation in North Korea
- Corruption in North Korea
- Bangladesh Bank robbery
- Sony Pictures hack
- WannaCry ransomware attack
General:
References
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- ^ Adam Taylor (March 13, 2013). "Kim Jong-un Estimated To Have Up To $5 Billion In Secret Overseas Accounts". Business Insider. Retrieved September 4, 2014.
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Further reading
- Chestnut, Sheena (2007). "Illicit Activity and Proliferation: North Korean Smuggling Networks". International Security. 32 (1): 80–111. S2CID 57559037.
- "Democratic People's Republic of Korea (DPRK or North Korea)" (PDF). International Narcotics Control Strategy Report: Drug and Chemical Control. Vol. 1. Washington: United States Department of State. 2017. p. 143. Archived from the original (PDF) on 2017-05-04.