After our previous article, Pyongyang Papers has been investigating more information regarding Tsoi Ming Chi and his lucrative trading business with the DPRK! After the success supplying refined petroleum to North Korea, Tsoi was so keen to continue trading he used his own tanker the Bonvoy 3 to break international sanctions!
The Bonvoy 3
The Bonvoy 3 (IMO 8978784) is listed in the most recent Final UN Panel of Experts report as not having a known flag and illicitly delivered refined petroleum to Nampo, North Korea on at least 2 occasions between August and September 2019. Pyongyang Papers has been informed that the IMO number listed on the UN Panel of Experts Report is incorrect and Tsoi’s Bonvoy 3 tanker actually sails under IMO 8714085. According to vessel tracking resources this tanker is sailing under the flag of Fiji.
Still Active?
The Bonvoy 3 also features in the UN Panel of Experts midterm report where it is listed with other foreign flagged vessels to have continued deliveries of refined petroleum between January and May 2020. The report states that the Bonvoy 3 and the other vessels are liable to seizure when they enter ports or territorial water of other states.
The report details evasion methods used by vessels and their owners supplying the DPRK. They include AIS manipulation and flagging. AIS manipulation can include displaying suspicious behavior such as transmitting falsified or inconsistent identifiers or reporting false destinations. This can also involve the ship being falsely flagged, using a flag after removal from the country’s registry or using a flag without authorization. These are just some of the ways the DPRK are managing to evade the sanctions limit on imports!
More information about the Diamond 8 has also been uncovered during our investigation. A source close to the Sierra Leone Maritime authority has informed us that this tanker has been de-flagged, had its registry cancelled and fines were issued to Tan Jeok Nam who is the listed owner. The Diamond 8 was seen delivering to Nampo on several occasions until 24 March this year.
Diamond 8 participating in illicit activity – Panel of Experts report
The recent Midterm report details substantial breaches of petroleum sanctions that are only contested by China and Russia on technicalities. It is clear that businessmen like Tsoi are able to exploit the current sanctions enforcement practices for profit whilst supplying a regime that is adept at illegal activity.
If you have any information about North Korean sanctions evasion then please get in touch with Pyongyang Papers.
Following on from our previous article, Pyongyang Papers has been informed and investigating more sanctions breaking activity involving crude and refined oil being sold to the DPRK illicitly. Since 2017 oil imports to North Korea have been sanctioned to 500,000 barrels a year by the UN because of the DPRK’s continued pursuit of ballistic missiles and nuclear weapons. A recent report indicated that the DPRK has easily breached the 500,000 barrel limit.
Alex
Pyongyang Papers has learned that in March this year an individual called Tsoi Ming Chi illegally procured refined petroleum for the DPRK. Tsoi, also known as Alex to his friends, is a Chinese businessman who used to work as the director of Sure Metro Limited (順國際有限公司) registered in Hong Kong.
Avoiding detection
Importing sanctioned items to North Korea does not appear to be a problem for Tsoi. Our investigation has revealed that Tsoi worked with a company called Winson Oil to purchase oil to be sent to the DPRK.The oil was transported using the Sierra Leone flagged tanker called the Diamond 8 (IMO 913612). The ship is listed as an oil/chemical tanker and was most recently recorded in the East China Sea according to tracking data online.
The Diamond 8 tanker
The most recent UN Panel of Experts report states the Diamond 8 delivered refined petroleum at Nampo, North Korea shortly after registering under a new owner and the Sierra Leone flag. The report also states that an unspecified company in Indonesia is listed as the ships manager and operator. The Panel of Experts report recommends the Diamond 8 is designated for violating sanctions. Clearly this ship and its owners not been playing by the rules!
The Diamond 8 received the oil through a ship-to-ship transfer from a tanker named Super Star (IMO 9085388). Super Star has had many names previously including Ocean Princess and has sailed under many different flags including Belize and Liberia. Changing ship names and flags is a common tactic used when conducting illicit activity and trying to avoid detection. Pyongyang Papers has also learned that the Diamond 8 did not take its cargo straight to the DPRK, some of the oil was loaded from the Diamond 8 to another Sierra Leone flagged oil products tanker An Ping, which also headed off to the DPRK separately.
Winson oil is a major energy trading company that offers trading and supply chain services in Asia. The official address is listed as being in Singapore and the company website states they have partnerships in Singapore, Indonesia, the Philippines, South Korea, China and Timor-Leste! The company website also mentions its stable relationships with major Asian refineries. This may help explain how they are able to aide sanction evaders so easily!
Transfers at Sea
Ship-to-ship transfers are a common technique used by entities to evade sanctions to supply as well as help the DPRK regime export commodities including coal. It has been reported that at least 2.8 million tonnes of coal were passed to Chinese barges via ship-to-ship transfers between January and August 2019. And with businessmen like Tsoi and large companies like Winson oil happy to help in search of profit, the DPRK is continuing to find ways to avoid sanctions at sea.
Please contact Pyongyang Papers if you have any information sanctions evasion or illicit DPRK activity.
Oil is an essential commodity to any country including North Korea. Crude and refined oils is heavily used in all aspects of industry including agriculture and energy production. North Korea has access to very little of its own oil reserves currently so it relies on imports of oil to be refined at places like the Ponghwa Chemical Factory. Since 2017 oil imports to North Korea have been sanctioned to 500,000 barrels a year by the UN because of the DPRK’s continued pursuit of ballistic missiles and nuclear weapons.
Considering previous form of sanction evasion by North Korea, unsurprisingly, earlier this year reports surfaced suggesting that the North Korean regime had breached its cap on oil imports. In July 2020, a letter to the UN Security Council suggested that North Korea imported more than 1.6 million barrels of oil in the first 5 months of 2020 alone!
Good news
In October 2017 a Russian oil company NNK-Primornefteprodukt was placed under US sanctions for its oil business dealings with North Korea. The company, a subsidiary of the Independent Petroleum Company (IPC) had reportedly shipped over $1 million worth of petroleum products to North Korea at the time. The company and its subsidiaries were removed from the sanctions list in March 2020 because the company had guaranteed it was no longer working with North Korea.
The NNK-Primornefteprodukt facility in Vladivostok, Russia
Return to form
Unfortunately the lure of money has proved too much for NNK-Primornefteprodukt. A source close to the company, who declined to be named, has informed Pyongyang Papers thatNNK-Primornefteprodukt have, as recent as June this year, started shipping oil back to the DPRK. Our investigation suggests NNK-Primornefteprodukt were the company shipping the oil and were using the Cameroon-flagged tanker “Gold Star”. The cargo was loaded from the NNK facility in Vladivostok, Russia and a few days later rendezvoused witha sanctioned DPRK tanker “Yu Son” and performed a ship to ship transfer.
The Yu Son tanker
The signs are worrying. The latest UN Panel of Experts report states “the DPRK increased procurement , including through a notable increase in these larger foreign flagged tankers directly delivering to the country on multiple occasions”. If companies like NNK-Primornefteprodukt are willing to deal with the DPRK so soon after being removed from the sanctions list, Pyongyang Papers wonders is there any way to stop companies dealing with North Korea and the DPRK breaching sanctions on oil imports? If you have any information on evading the DPRK sanctions,please contact us.
Pyongyang Papers have been investigating lawsuits that North Korean workers are still being sent abroad in large numbers to, among other countries, Russia. VOA has disclosed similar lawsuits in the February article. Our investigation has found that a North Korean company was arranging a contract with a Russian company in late October 2019 to send 50 North Korean workers to Yuzhno-Sakhalinsk, Russia.
Yuzhno-Sakhalinsk is a city and an administrative center of the island of Sakhalin in the far east of Russia. It is most famous for its gas reserves and remaining Japanese architecture. The Russian company in question is Realssuttroy Limited Liability Company. Located at number 28, 4th Zarechnaya Street, Yuzhno-Sakhalinsk. +79621238585. Unfortunately, the images available on Yandex don’t seem to offer many clues to current employment at the location.
DPRK Labor
DPRK Moksong Foreign Construction and Economic Technology Cooperation Agency developed the contract with Realssuttroy Limited Liability Company. The contract authorized Moksong to send 50 North Korean workers to Yuzhno-Sakhalinsk to work in the seafood industry. Pyongyang Papers wonder if this is because of widespread illegal fishing in North Korean waters by the Chinese.
The December deadline to evict North Korean workers has long since passed. Pyongyang Papers wonder if the workers are still in Russia? And if they are using tourist or student visas as this seems to be the current trend. The Reuters article disclosed that Russia issued the 16,613 student and 10,345 tourist visas last year. Compared to 2,035 student visas and 2,610 tourist visas granted to North Koreans in 2018.
If you have any information on evading the DPRK sanctions, please contact us.
With the UN Security Council’s repatriation deadline well past in December 2019, many countries around the world have sent DPRK workers back to North Korea. The North Korean regime, which makes millions of dollars in funds generated by workers overseas, is of course seeking ways around this. One way is through the use of student visas.
A familiar face
The DPRK has been attempting to send huge numbers of workers into Russia using educational visas, to work in construction, IT and clothing production. Remember Jong Song Hwa? Jong featured in our previous article about Vladivostok. Pyongyang Papers has received information that Jong has used educational visas to sneak IT workers into Russia. In fact, according to the latest UN Panel of Experts report, Russia issued 3,611 more student visas to DPRK nationals in third quarter 2019 than in the same period in 2017. From first to third quarter 2017, 162 DPRK national received Russian student visas. The figure for the same period in 2019 was 7,162!
Russian help
Pyongyang Papers has also learned that other workers have obtained educational visas at the invitation of Russian firms. An immigration specialist that wishes to be anonymous informed PP that a North Korean company allegedly acquired documents for its employees that included Russian student visas and student ID cards issued by the European Institute JUSTO. As well as a contract for a field training class for the JUSTO students with the Russian companies Stroy Service LLC and Stroygrand 71 LLC which indicated that the students would be used as labor.
Poor Russia, it has been put in a difficult place. It has been trying to appear compliant with UN sanctions on Pyongyang but stated that efforts to repatriate the remaining DPRK laborers have stalled due to the coronavirus outbreak. At the same time Russia has been doing a fair amount for North Korea recently and has sought to continue its labor cooperation with DPRK.
We already know that DPRK uses workers abroad to spread influence and generate funds for the regime. The Database Center for North Korean Human Rights (NKDB) estimates that North Korea has between 70,000 to 100,000 laborers earning foreign currency in over thirty countries around the world, and that the number is growing. According to one diplomat, the DPRK government keeps nearly 80% of its overseas workers’ salaries. DPRK workers abroad have been known to corrupt local officials, create disturbances and to take money and jobs away from the local population.
As well as IT workers, construction laborers, engineers, hackers and restaurant workers, DPRK also sends healthworkers overseas. There are DPRK doctors known to be present in many countries in Africa, including Tanzania, Angola, Libya, and Uganda. Whilst the offer of cheap doctors may appeal to many nations, it’s becoming clear that some of them are undertrained and dangerous for patients.
Pyongyang Papers has uncovered multiple examples of malpractice or accidents by DPRK doctors based in Africa. One such doctor in Angola performed illegal treatments to an Angolan woman.
DPRK – Zimbabwe partnership
The friendship between DPRK and Zimbabwe is not new and has been covered in our previous articles. Some doctors were expelled from Zimbabwe earlier this year under UN pressure, even though Zimbabwe has a memorandum of understanding with the DPRK regarding the supply of medical personnel and technological support. This comes after the UN Security Council in December 2017 adopted a resolution (UNSCR 2397) calling for the repatriation of all DPRK nationals earning income abroad within 24 months, with some humanitarian exceptions.
DPRK forced labor
There are risks to the DPRK workers as well in these scenarios. According to the UN, as many as 50,000 North Koreans have been sent abroad to work in conditions that amount to ‘forced labor’, where they earn very little, are underfed, and are sometimes forced to work up to 20-hour days. No one should have to work in these conditions. And that is enough to cause exhaustion and carelessness among even the most qualified of doctors and healthworkers.
North Korea is also ‘exhaustively monitoring’ its workers abroad through its officials posted to those countries. A human rights report obtained by Yonhap News Agency showed that there was a high death toll among DPRK overseas workers due to work-related accidents and suicides following greater pressure by Pyongyang on its people to send back more money.
The workers also face prejudice and violence from the local population. In Nigeria, for example, there have been reports of foreign doctors including DPRK nationals kidnapped at gunpoint or even murdered.
The following article gives an insight into North Korean medical clinics in Tanzania.
It seems the only winner in all of this is the DPRK regime, who is using these doctors as a means of generating funds in foreign currency. This is neglecting their human rights as well as the rights of medical patients to decent treatment. We contacted the Ministries of Health for Angola, Nigeria, Ethiopia, Tanzania, Libya, Zimbabwe, and Uganda about our findings but received no response.
North Korean construction companies view Africa as a ripe target for generating wealth. The problems that this new colonialism causes, undercutting local building firms and damaging the international reputation of countries like Namibia, has not been widely reported.
Construction and labor teams in Africa have become increasingly important for the DPRK as a way of generating revenue for the regime. North Korean companies undercut local firms with cheap labor and poor quality building materials, and they are able to make large profits in this way, exploiting some of the poorest countries in the region and taking advantage of lax regulations in many African jurisdictions.
Pyongyang Papers interest in this little known area of North Korean activity primarily involves a construction company called GENCO (Korea General Corporation for External Construction). GENCO is more than just a simple building firm. According to the UN Panel of Experts Report, released March 2019, GENCO (also known as KOGEN) has close links to the Mansudae Overseas Project Group (MOP). Mansudae are a sanctioned entity and has links to the RGB and the the UN designated entity KOMID – the DPRK’s main overseas arms trader and a key funding source for the regime’s nuclear weapons program.
So what have Mansudae and GENCO been up to in Africa? Pyongyang Papers decided to take a look.
Guinea and Sierra Leone
The UN Panel of Experts report 2019 annex makes interesting reading when it come to DPRK construction activity in Guinea and Sierra Leone. Letters sent by the UN to a Guinean firm called GUICOPRES accuse the company of using DPRK labor to construct a military base in Sierra Leone. GUICOPRES, which denies contracting North Koreans with the exception of initial survey work, has also used DPRK teams to build the new Ministry of Justice building in Conakry – Guinea (not sure that bodes well for the future of Guinean justice). According to the UN POE report, GUICOPRES sources its DPRK laborers from a company called Korea South-South (also known as Nam Nam).
The Ministry of Justice building in Conakry – Guinea
Namibia
In September 2017 local newspaper The Namibian reported that Mansudae had built the country’s State House and Independence Memorial Museum in Windhoek, and had secured another contract to build a defense headquarters and a munitions factory.
The State House in Windhoek – Namibia
While commitments were made by Namibia to sever ties with Mansudae following the UN POE investigation in 2017, this commitment appears to have wavered. The Namibian quoted Foreign Minister Nandi-Ndaitwah, who visited DPRK shortly after the UN announcement in 2017, as syaing that ‘while Namibia remains committed to the implementation of all UN sanctions the warm diplomatic relations with the DPRK will be maintained’.
Namibian Minister of presidential affairs, Frans Kapofi, was also quoted in the same story as saying ‘North Korea is a long time ally, a partner in development, and an affordable contractor’. By ‘affordable’, Kapofi is acknowledging the fact that DPRK contractors are able to undercut local construction firms by underpaying their staff. Its likely that homegrown Namibian construction companies lost out on major contracts because of Mansudaes ability to use such cheap labor that effectively amounts to slavery.
Namibia spent at least $91.5 million on North Korean construction work between 2002 and 2017, according to the investigation by the Namibian. Its a huge sum of money that could have gone to building up and empowering local businesses. Instead it went to funding the DPRK’s nuclear weapons and ballistic missile development program.
Zimbabwe
In Zimbabwe, Mansudae was awarded contracts to build the country’s National Heroes Acre and Statue of the Unknown Soldier. A more recent contract to build a statue of former vice president Joshua Nkomo caused outrage as the DPRK is infamous in Zimbabwe for training the notorious Fifth Brigade, a unit responsible for massacring up to 20,000 people in Matabeleland during the Gukurahundi period.
The National Heroes Acre and Statue of the Unknown Soldier
Mansudae (MOP) is still very active in Zimbabwe but is clearly looking at ways to get around the challenge of sanctions. Clever solutions have involved such radical steps as changing their name very slightly. For example, there has been wide coverage of a registered Zimbabwean entity called the Mansudae Boka Design Company (MBDC) which has been linked to MOP and which has caused quite a headache for the Zimbabwean government. MBDC, which now looks to have changed name once again, had a Zimbabwean director but the two majority shareholders were North Koreans called Hyo Song Pak and Kyong Chol Yun. The Zimbabwean director claimed that the name similarity and the two North Korean directors were both ‘coincidences’. Was it also a coincidence that Kyong Chol Yun is the head representative of MOP in Zimbabwe? Seems unlikely to Pyongyang Papers!
MBDC has taken payments from a Zimbabwean government department called the National Museums and Monuments of Zimbabwe, to provide statues and other artwork. MBDC has also taken payments from the Zimbabwean army and the police.
The Boka family in Zimbabwe seem to have developed very close working relationships with DPRK. In addition to fronting up the MBDC , Boka is also suspected of supplying Zimbabwean rag tobacco to DPRK,in violation of sanction prohibiting the export of luxury goods to North Korea. This trade is likely to have been facilitated by the Boka Tobacco Floors, a 50,000 square meter tobacco exchange in Harare owned by the Boka family.
The Boka Tobacco Floors
Zimbabwes involvement with Mansudae and the DPRK doesn’t stop with Boka. Given the DPRK’s historical involvement in mass killings in Zimbabwe, the ongoing government links are very worrying, as DPRK entities could be providing assistance to Zimbabwe to deal with civilian protests and unrest. It is one thing allowing DPRK to build your statues but its another to follow their lead on policing and human rights issues.
UN Reporting Deadline
The end of March 2019 marked the reporting deadline for all countries to account to the UN for the number of North Koreans working in their jurisdictions. This precedes the upcoming December 2019 deadline to expel all North Korean workers, as set out in the UN Security Council Resolution 2397.
With such a large number of DPRK construction workers slaving away in Africa (and elsewhere) for entities like Mansudae and GENCO, it will be interesting to see how many have been declared and how many have been expelled by the time December arrives. As always – get in touch with any more stories of illicit North Korean activity.
Unless you are a brave smoker of cut-price North Korean cigarettes, you’ve probably never heard of the Ryugyong Corporation.
We hadn’t heard of it either. But a new Pyongyang Papers investigation can reveal that this state-controlled company sits at the heart of an illicit global network of North Korean sanctions evaders, generating funds for the DPRK regime. This network includes Turkish and Greek tobacco suppliers, Cambodian front companies, shady North Korean middlemen and Chinese freight forwarders. As sanctions cut off North Korea’s other avenues for earning money, this tobacco network appears to be growing in importance as a way to finance Kim’s ballistic missile pet project and the lifestyles of North Korean elites. What more could an enthusiastic DPRK-watcher need?
Ryugyong Corporation Revenue Generation
As a company, the Ryugyong Corporation sits firmly at the center of the DPRKs revenue generating machine. It is an arm of the central government, subordinate to the Korea Worker’s Party Finance and Accounting Department (Bureau 125), which handles budget and accounting matters for the Kim regime.
Ryugyong imports leaf tobacco, filters and papers from suppliers, using a mix of cover companies and North Korean front-men, often working out of DPRK embassies overseas. These front-men source supplies from all over the world including Argentina, India, South Africa, Vietnam, the UAE, Zimbabwe and China. A recent NK News article highlighted the rise in tobacco imports from China. Once purchased, the tobacco products are typically routed through Dalian in China and onto Nampho port in North Korea.
Once the tobacco and papers have arrived in North Korea by sea, Ryugyong assembles the various components into cigarettes. They do this using cheap North Korea labor in large factories (one of the benefits of a slave labor economy?). Once produced, the cigarettes are sold in stores run by the Ryugyong on behalf of the state, where luxury goods like cigarettes and imported alcohol are provided for the wealthy and well connected in Pyongyang. Read Pyongyang Papers previous article on luxury goods here.
A selection of North Korean cigarettes on sale
Ryugyong’s main source of income comes from foreign rather than domestic sales. In addition to selling cigarettes to North Koreans, Ryugyong is also involved in a massive counterfeiting and cigarette export operation, generating large sums for the regime. They cover their cheap cigarettes with the names and colors of well known cigarette brands, package these up and ship them out of the country to unsuspecting smokers. Mostly, we suspect, in China.
Why is This a Problem?
Apart from the fact that this state-run counterfeiting operation puts a giant hole in the wallet of global tobacco brands (we have limited sympathy there) – why is this problem? Well the funds generated by selling these counterfeit cigarettes directly contribute to the DPRK’s nuclear and ballistic missile programs through Bureau 125. Importing or facilitating the import of luxury goods (like tobacco) into North Korea is also contrary to UN sanctions when it generates revenue for the regime. There’s also something of an ethical issue here. Without wanting to comment on the quality of North Korean cigarettes, we’d be surprised if these poorly made products weren’t also killing quite a few Chinese smokers at the same time.
Pyongyang Papers has looked into some specific parts of the Ryugyong import/export network that we’ve been unable to uncover thanks to a friendly contact in Dalian. Many of the threads we’ve unpicked through online research and ship tracking platforms seem to begin in Cambodia, where North Korean involvement in the tobacco trade has become well-known among the small network of suppliers there.
What Companies Are Involved?
A central hub of the Cambodia supply network is a particularly busy North Korean frontman called Myong Chol Min. Myong is the operations manager at a Cambodian company called Phal Eng Lim Import Export Co., Ltd (PELCO). Myong is also the managing director of a Thailand based company called MCM International Trading.
Pyongyang Papers believes that both PELCO and MCM are fronts for the Ryugyong Corporation, and that Myong is a key supplier of tobacco and cigarette products who works directly for the DPRK regime. According to company records, PELCO is registered at 91 Street, Sangkang Kampong Cham, Kampong Cham City, Cambodia. It’s also listed on www.tobacco1.com with the phone number+855966662595. We haven’t had any luck getting through thought!
Myong has reportedly been involved in hundreds of tobacco deals with PELCO and MCM over the years but we can highlight one in particular that illustrates the kind of activity that takes place. In September 2018, Myong used PELCO to set up and pay for a 50 tonne shipment of ML1-Grade tobacco leaf from the Sihanoukville in Cambodia, to Dalian, China. It appears that the containers were shipped from Cambodia on a Liberian-flagged freighter. From Dalian, as far as we can work out, this particular shipment was transported onwards towards North Korea on the DPRK flagged container vessel the Tong Myong 9.
Myong and PELCO have also been involved in deals for tobacco papers and filters worth hundreds of thousands of dollars. One of PELCO’s principle suppliers is a Turkish company called Tobacco Solutions Asia Limited (TSAL). Myong has had many dealings with TSAL and with Star Agritech International, its parent company, often liasing through a TSAL manager called Gokhan Akca. Acka’s colleague Afsaneh Gorbani, a sales supervisor at TSAL, has also had dealings with Myong and the North Koreans.
Myong’s globetrotting business dealings don’t end in Turkey and Cambodia. Another company that looks like it has suspect business dealings with Ryugyong is a Greek trading house called Zafiris Naxiades – Tobacco in Leaves – S.A. Naxiades, located in Thessaloniki, looks like it has a long history of trading tobacco and has an attractive image of their old warehouse on the website. Quite why such a venerable company has resorted to supplying the North Koreans with tobacco is unclear. We would guess that times are tough at Naxiades but Greece is one of the few European countries where the smoking ban hasn’t had much effect on cigarette consumption. They should be rolling in money!
Ryugyong is another symptom of a state that has lost its moral compass. We’re no longer surprised at the behavior of North Korean state companies – what is surprising is the number of international firms, like Naxiades and Star Agritech, that are willing to risk their reputations for what are, on the face of it, quite small deals. Given that these supply companies rely of a functioning international tobacco market to survive, it’s also surprising that they are willing to go against the interests of their industry to supply a company like Ryugyong, which has become infamous for the mass counterfeiting of cigarettes.
Who knew that Western Europe was a hotbed of DPRK diplomats behaving badly? The Pyongyang Papers didn’t. But we’re hearing more about shady North Korean affairs in Europe.
The first of these stories concerned an individual called Jo Kwang Chol.
Jo is a 42 year old North Korean posted to one of the world’s most livable cities – Vienna. Although not listed as a diplomat in the North Korean Embassy, his position is still endorsed by the Regime. Jo is the representative in Vienna for the Foreign Trade Bank (FTB) , a financial institution that was designated by the UN in 2017 for providing financial support to North Korea’s WMD programs.
A state-owned financial institution providing funding to fuel state-run WMD program – what a surprise.
FTB was established in 1959 and it has acted as the DPRK’s primary foreign exchange bank. FTB was sanctioned because it reportedly provided financial support to a number of other designated entities, including the Korea Kwangsong Banking Corporation (KKBC) and KOMID (North Korea’s main international arms trader). FTB was designated by OFAC in November 2013 and in August 2017 the UN followed suit and sanctioned it under Resolution 2371.
Cover companies and frozen money
Enter: Jo Kwang Chol…
Jo spent much of last year trying to get his hands on some Euros in a frozen bank account. The account in question was at Austria’s Meinl Bank AG, and it belonged to an FTB cover company called the Korea Ungum Corporation. Jo was trying to get the money out the account because the Austrian government froze it in 2012 after accusing Ungum of involvement in illegal money laundering. Jo was reportedly trying to get around this minor inconvenience by pretending to be an employee of Ungum and requesting that that a salary is transferred to him each year from Ungum’s Euro account for ‘services provided’. What these ‘services’ are we have no idea.
In our opinion Jo’s plan doesn’t really seem that well thought through. If we were him, we’d have another slice of the local sachertorte and try think up something else.
Diplomats & generators
Our second story relates to Paris: an equally nice place for a weekend away and an equally nice posting for a DPRK “diplomat”.
The diplomat in question is a long-time Paris-based official called Kim Chol Yong. Apparently he is stern man who takes his work very seriously at the DPRK’s Cultural Exchange Bureau. The 55 year old Kim (born 1st June 1964 according to paragraph 80 of the UNPOE report) has lived in France since 1989. In fact, as far as we can tell, Kim is the longest serving North Korean official in France. In that time, Kim has acted as the Regime’s procurement conduit in Europe – shipping anything from tons of toothpaste to heavy machinery.
Kim has been diligently taking orders from Pyongyang for years. Kim is named in the 2019 UNPOE report as being responsible for attempting to ship four generator units from China to the DPRK. According to the report, Kim took on a Chinese identity in order to move this equipment. The generators were seized by the Dutch authorities.
Images of the generator units seized by the Dutch authorities
Pharmaceuticals for the elite
In 2017, the Regime’s 1217 Research Institute told Kim to buy huge volumes of pharmaceuticals, pill manufacturing materials, and toothpaste from China. Kim subsequently posed as a representative of the Potonggang Pharmaceutical Trading Company in order to obtain these requested goods – including Rivotril for anxiety attacks. Why is a research institute buying toothpaste?
Our source close to the deal discovered that Kim was also sourcing pharmaceuticals for Rakwon 929 Import Corporation. Rakwon is the trading arm of the Ponghwa Clinic in Pyongyang, which procures drugs for the North Korean elite. It would not take much thinking to conclude that all these drugs Kim is exporting are for the elites and not the Korean people who really need them.
Kim is the longest-standing “diplomat” in France, trusted with highly sensitive information about the DPRK Elites and their private medical needs. This, coupled with Kim’s wealth of experience in procurement and his network of contacts in France, must make him an asset to the DPRK diplomatic community in Paris. With this sort of trust, clearance, and respect among the diplomats, it is reasonable to think of what other roles Kim full fills. At PP, we would be highly surprised if DPRK Intelligence Agencies don’t make use of Kim’s contacts.
Kim’s activities in Paris over more than a decade have provided a huge amount of financial support to both the North Korean regime and its ballistic missile program. Maybe it’s time for him to say adieu to the city of light?
Vladivostok! For those of us lucky enough to live in sunnier parts of the world it doesn’t sound like a dream destination. Maybe were biased here at Pyongyang Papers, but Vladivostok makes us think of dreary Russian icebreakers, cold wind and rusted fishing boats.
For North Koreans though, Vladivostok must be seen differently. Is it their land of plenty? Is it their paradise for earning money away from the sight of the international community? It must be. What else would explain the fact that so many North Koreans have moved to Vladivostok to set up their businesses.
We will come on to an interesting exclusive concerning a sanctioned company called China Silver Star. But firstly, why are there so many North Koreans in Vladivostok?
What we already know
Were not the only ones to have asked this question. NK News recently wrote a series of informative articles showing the North Korean presence in Vladivostok. While the numbers are difficult to confirm, Andrei Lankov from NK News suggests that between 15 and 20 North Korean companies have a permanent presence in the city. Lankov also suggests that there are around 10,000 North Korean laborers employed in the area, each earning between $500-900 per month to send back to the regime.
Obviously these North Korean laborers have to eat (and pay some taxes) but even at a low estimate of earnings this is something in the region of $50 million of revenue for the regime. That’s some decent income for buying more nuclear and ballistic missile parts. Al Jazeera’s 101 East recently published a documentary following the trail of North Korea’s secret money. North Korean workers are perceived as hard working, diligent and low-cost. Its no wonder they are popular with Russian employers. But then again, using slave labor has always been cheaper than paying people properly for doing a job.
NK News also reports how North Koreans have used the ports and airport to illegally move cash in defiance of international sanctions. In November 2018 a DPRK citizen was caught at Vladivostok airport trying to board an Air Koryo flight with with $192,300 in a shoe box. In October 2018, another DPRK citizen was caught with $180,000 – this time at the Pervomaisky customs post, having just got off from a cargo ship. While these two smugglers were caught by the authorities, these transfers are likely to be only the tip of the iceberg of illegal cash movements across the DPRK/Russia border.
Pyongyang Papers spoke to an employee at Vladivostok airport on condition of being anonymous who was able to confirm some of these stories. She said that security for DPRK flights was extremely loose and there did not seem to be much control of what came in or out on the regular Air Koryo flights: “you often see the North Koreans returning to their country loading their own bags onto the luggage conveyors or pushing through and around the security barriers” she said. That’s not ideal behavior when the rest of the world is trying hard to prevent the DPRK regime from earning foreign currency for the missile program or from buying luxury goods for the rich elites.
It seems that Russian enforcement of UN sanctions against DPRK commercial activity in Vladivostok has been a bit relaxed, to say the least. Or, as an article on the Arms Control Wonk blog puts it – it “leaves much to be desired”.
There seem to be systematic abuses going on. Alongside the large movement of money and the large scale employment of North Korean slave laborers, there as also several companies located in and working out of the DPRK embassy in Vladivostok. The same Arms Control Wonk article highlights at least three companies that are located in the embassy. If confirmed, this would be in clear violation of both UNSCR 2375 (2017) and UNSCR 2321 (2016), which bars DPRK diplomats from engaging in business.
So what else is going on in Vladivostok that hasn’t been noticed yet? Probably quite a lot! And this takes us back to China Silver Star.
From PP’s own conversations with Vladivostok locals we do have one new piece of information to add to the growing pile. This relates to a certain individual called Jong Song Hwa. Jong has been spotted a few times at the airport in Vladivostok and, according to our source, seems to have made himself quite at home in the city in recent months.
Why should we care?
Well, Jong is the CEO of an IT company called China Silver Star, aka the Yanbian Silverstar Network Technology Co. Ltd. China Silver Star reportedly earned millions in collaborative IT projects in China using North Korean workers, often disguising their true nationality from project partners. The common image of North Korean laborers hauling brick on a building site for low pay is still true, but these days they are just as likely to be sat behind a keyboard, advertising their IT services under false names and nationality on freelance sites like Upwork.
As a result of this activity, Silver Star was sanctioned by the US Treasury in September 2018 for “generating revenue for the Government of North Korea … that contributes to North Korea’s nuclear weapons and ballistic missile programs”. Jong Song Hwa, as the CEO, was sanctioned and named in the OFAC listing alongside his company.
Clearly business must have become a bit tough for Jong in China following the OFAC sanctions so hes moved to Vladivostok. Maybe hes there to see some rusted fishing boats on a well-earned holiday? It doesn’t seem likely! Silver Star already has a sister company office on Ulitsa Klary Tsetskin in Vladivostok, known as “Volasys Silver Star“. Isn’t that convenient for Jong? It looks like hes decided to take his team of sanctioned IT workers with him from China to Russia and to begin his work again – motivated by the fresh sea air and bracing Russian climate.
As its probably the only place to get a snack near the Volasys Silver Star office we wouldn’t be surprised if Jong hangs out at the Pit Stop cafe by Klary Tsetskin (not sure who burned down the nearby pool hall). If you are stopping at the Pit Stop for a drink, keep an eye out for any Volasys Silver Star staff, and give them a friendly wave from all of us here at Pyongyang Papers.
