North’s money men leave China

Some 50 key North Koreans doing business in China are finding new footholds in Southeast Asia, following the stiffening of economic sanctions on Pyongyang.

A China-based source familiar with North Korean affairs told the JoongAng Ilbo on Monday that “executive-level personnel from North Korean agencies, who have lived in major Chinese cities such as Beijing and Shanghai to earn foreign currency, are shifting their footholds to countries such as Vietnam, Cambodia and Myanmar and thinking up new projects.”

The move comes following the implementation of United Nations Security Council Resolution 2270 in March, which imposed the toughest-ever sanctions on Pyongyang to cut cash flows into the country that support its weapons of mass destruction program.

North Koreans involved in earning foreign currency in China are called “Pyongyang’s red capitalists,” the source said.

Some of them are affiliated with agencies and banks on the UN Security Council blacklist, including the Korea Mining Development Trading Corporation (Komid), Tanchon Commercial Bank and Office 39, a secretive bureau that manages slush funds and generates revenue for the leadership. Office 39 is also known as Room 39, Bureau 39 and Division 39.

The source added that in some cases, North Korean officials move to countries where it is easy to apply for citizenship, such as Cambodia, and even acquire citizenship.

“Since early March, when the UN Security Council resolution was adopted, North Korean authorities began to relocate its workers involved in trade and earning foreign currency in China to Southeast Asia,” said another North Korea source who requested anonymity. “As China showed signs it would actively implement the Security Council resolution, authorities moved activities to regions determined to be less stringent.”

Some Chinese authorities initially were anxious after they mistook the movement of these North Korean workers as a defection en masse.

“In order to change North Korean agents such as trade representatives, it takes at least two to three months,” said Kim Kwang-jin, a researcher with the South Korean Institute for National Security Strategy who headed the Singapore branch of Pyongyang’s North East Asia Bank before defecting in 2003. Because of this time-consuming process within the North’s ruling Workers’ Party, Kim said, “It is highly likely that North Korean authorities planned the moves from China since early January, right after its [Jan. 6] nuclear test.”

“North Korea is trying to diversify its routes for earning foreign currency and enabling remittances to get around the UN sanctions,” a South Korean government official said.

Vietnam has been active in the implementation of the latest UN Security Council resolution on North Korea. Two North Korean officials based in Vietnam, including Choe Song-il, a vice representative of Tanchon Commercial Bank in Vietnam, were among those blacklisted in the resolution.

Choe left Vietnam on April 23 for Pyongyang, seemingly voluntarily. Some reports see it as a deportation as Vietnam implements the UN blacklist.

BY LEE YONG-JONG [kim.sarah@joongang.co.kr]