Radio Free Asia reported last year on the state of North Korean workers abroad and specifically Africa. Their appropriately titled piece says it all – “North Korean Workers Remain in Africa Months After Sanctions Deadline To Repatriate”. They referred to Tunisia’s repatriation report following sanctions on North Korea, where it was stated that most African countries were ignoring sanctions. The deadline for UN member states to repatriate North Korean workers passed over year ago on 22 December 2019.
It is well known that many African countries have maintained close ties with North Korea, with previous reports describing major construction projects in Africa including monuments, museums, government buildings and weapons factories, and eventraining for soldiers and police officers. The line between military and construction projects in such a bilateral relationship is often blurred and is well described in “People for Profit: North Korean forced labor on a global scale“. When both parties are engaged in acts that are mutually beneficial it is no surprise to hear of them ignoring UN sanctions. This certainly appears to be the case with a Togo based company – (Societe) Alzema SARL. According to business listings, Alzema SARL is registered in Lomé – Togo
Lomé – Togo
Alzema SARL
Pyongyang Papers has been informed that a number of DPRK medical staff are currently working in Togo for the organization Alzema SARL. Alzema SARL are headed by Alassane Yatabare, who is listed as the Company Director General. The company specializes in construction materials and also has links with the mining sector. Pyongyang Papers believes that the medical staff are supplied by the DPRK Moranbong Medical Cooperation Company as required.
Pyongyang Papers has reported previously about North Korean doctors in Africa. Is the provision of medical staff into construction companies with ties to mining a way to maintain links in this area, perhaps for future proliferation of staff? Or maybe Alzema SARL have branched into medical provisions. We know from previousUN Panel of Experts reports that North Korea has sent mining representatives abroad in the past.
With political, economic and military incentives for Africa and North Korea it is clear to see the reason companies and the regime are so keen break sanctions and exploit workers abroad. However, this is the first time Pyongyang Papers have heard about them doing this under the name of God.
Links to the Church?
Our sources indicate that North Korean doctors Han Yong Il and Hwang Yun Bin met with the Togolese Ministry of the Interior thanks to Churches of the Evangelical Ministry of the Works of God of Togo who set up the meeting.
The irony of the DPRK links to churches does not escape Pyongyang Papers. Christianity is not something that openly ventures into North Korea, not publicly anyway without harsh consequences. The DPRK is described as being an atheist state, with no real freedom of religion. According to the 2021 World Watch list, North Korea is the worst offender for persecution against Christians. A position it has held for 20 years in a row! So, using churches to facilitate meetings proves the lengths the regime will go to avoid sanctions and achieve its ambitions.
Are you aware of any other church involvement helping evade sanctions against North Korea? Or if you have information on any other North Korean sanctions evasion please get in touch with Pyongyang Papers.
This year has seen a pandemic affect the whole world, infecting over 66 million people and resulting in excess of 1.5 million deaths worldwide, according to the World Health Organization. There are very few countries unaffected by COVID-19. With one of these exceptions being North Korea who have recently taken offense to South Korean remarks by an official! Pyongyang Papers questions how the DPRK has managed to avoid what has been described by some as the worst pandemic the world has ever seen? Is it realistic that a country of over 25 million people sharing a border with the rumored country of origin has escaped without any cases or is this claim just propaganda? Pyongyang Papers has investigated this story!
According to the UN Panel of Experts midterm report, the DPRK responded rapidly to the COVID-19 outbreak with border closures and enforcing severe quarantine measures on thousands of its citizens. Flights to and from China and Russia were suspended in late January, except for a single flight to Vladivostok on 9 March. Passenger rail services to China and Russia were also suspended at around the same time, as was cross-border road transportation – immobilizing the DPRK’s economic lifeline.
Vladivostok
Even if the unlikely claims that there have been zero confirmed cases of COVID-19 within North Korea are true, unfortunately the same cannot be said for the North Koreans based overseas. Pyongyang Papers has been informed that North Korean citizens working illegally overseas in Vladivostok, Russia, have contracted COVID-19 and that many more are in quarantine. Issuing work permits to nationals of the DPRK is currently prohibited due to the regimes continued pursuit of ballistic missiles and nuclear weapons, with Russia citingprevention of travel due to COVID-19 as their justification for non-compliance with UN sanctions.
Instead of helping their citizens and providing healthcare, North Korean officials have apparently grown angry with their citizens and issued a stern warning to keep the virus away from North Korea. It seems it is too late for those poor North Korean workers already infected, as North Korean officials are now demanding extreme measures from the infected citizens in Vladivostok. No doubt to ensure that North Korean workers illegally in Russia are not identified, in the future, as the way that COVID-19 entered the DPRK.
An image of Vladivostok
DPRK Healthcare
North Korea claims to provide universal healthcare with a national medical service and health insurance system that is all offered for free, however this claim is widely disputed by North Korean defectors. They claim that patients must pay for all health care services and that the upper classes have a higher standard of health care. “How much money a patient has determines whether they live or die”.
Neurologist Choi Jung Hun, a North Korean defector, disputes Kim Jong Un’s claims that North Korea has not had a single case of COVID-19, believing that the deadly virus entered the country prior to the closure of the 1400Km shared border with China at the end of January. When asked the motive behind the DPRK falsifying this information, Choi stated “The healthcare system is very weak. They don’t want to show that to the world”. Instead the DPRK have been quietly seeking help from China, Russia and other UN agencies. Lack of basic medical supplies, equipment, sanitation and access to water are just a few of the difficulties that the DPRK could face in this aggressive war against COVID-19.
The Tripoint Memorial in Fangchaun, China
The Regime
More importantly it is not only the rest of the world that the DPRK wants to fool with their claims, it also wants to uphold the following of its own population. As Dr Choi states “If it becomes clear that the health care system cannot take care of the people then they will lose confidence in their government. It would mean the system is not infallible”.
It is well documented that the North Korean regime mistreats its workers abroad. Pyongyang Papers has previously published an article investigating the regime refusing permission for severely ill workers abroad to receive treatment. The regime views its illegal workforce abroad as a means to make money to be sent back to Pyongyang and continues to show a total disregard for human life, even during a global pandemic!
If you have any information about evasion of DPRK sanctions, please get in touch with Pyongyang Papers.
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.
