Diplomatic relations between the Soviet Union (the predecessor state to the Russian Federation) and North Korea date back to 1948, shortly after the Democratic People’s Republic of Korea was proclaimed. The relationship between the two countries continued even after the fall of the Soviet Union, with it gaining further importance when Vladimir Putin was elected President of Russia in 2000.

In the late 1940s, roughly 9,000 North Korean migrant workers were recruited by the Soviet government to work in state-owned fisheries on Sakhalin, with a further 25,000 workers following suit in the 1950s. A secret agreement between country rulers (Leonid Brezhnev and Kim Il Sung) saw a second wave in the 1960s, consisting mainly of criminals or political prisoners. The flow of workers from North Korea to Sakhalin continues to this day, as reported in our previous article.

By the mid-2000s, masses of North Koreans were still entering Russia on work visas to try to escape their poverty-stricken homeland. Often compared to slave labor by outsiders due to the relentless working hours and poor living conditions, on the contrary North Koreans view the chance to work in Russia as a lifeline for both themselves and their families.

Kim Jong Un and Vladimir Putin meet for the first time in 2019 in Vladivostock

Slave labor?

According to Russia’s labor ministry, North Koreans are paid on average $415 per month, 40% less than the average salary in Russia. With recent reports suggesting a sudden hike, up to 70% of these wages earned by the workers are reportedly seized as ‘loyalty payments’ by the regime, to help prop up the government and its falling economy. This leaves the workers with even less money than usual to cover their living costs and to help support their families back home. However, due to the prestige and limited opportunity for North Korean citizens to improve their quality of life in the DPRK, it is impossible to find a job in Russia without paying a bribe, meaning it is often the more affluent Pyongyang citizens who get the opportunities to work overseas, with the underprivileged remaining poor with no means to better their future.

According to Ministry of Labor statistics, more than 85% of North Korean migrants work in construction. The rest are involved in a range of jobs from garment wok and agriculture, to logging, catering and traditional medicine.

Sanction evasion

However, Kin Jong Un’s persistent refusal to stop its nuclear testing program resulted in enforced UN International sanctions in September 2017 ensuing an embargo on the use of North Korean labor.

Unsurprisingly, in recent years Moscow and Beijing have appealed unsuccessfully to the member states of the UN to overturn the sanctions, in the hope to reignite the steady flow of migrant workers into both countries. Russia admitted missing the repatriation deadline, and here at Pyongyang Papers we know that Moscow’s claims of complying with the embargo are not wholly true- instead North Koreans continue to enter Russia to work via a loophole.

As North Korean’s on worker’s visas leave Russia, more enter on tourism and education visas, which aren’t banned by sanctions. During the first 9 months of 2019, 12834 tourist visas and 7162 student visas were issued to North Koreans, each rising about six-fold and three-fold respectively from a year earlier, according to Russian government data. With experts concluding that many of these visitors are likely working in Russia.

Students or construction workers?

A recent Pyongyang Papers investigation has revealed that a Moscow-based construction company was planning on receiving at least 100 student trainees to work on Moscow build projects.

BS Installation, LLC was founded in 2017 as a construction company with many projects under its belt. Also, plans are being discussed on sending student trainees to work on Moscow build projects for practical training.

Pyongyang Papers believes that Pyongyang will select the first group of 100 student trainees to arrive in Russia to work on projects in and around the Moscow area, following agreement between Russia’s SitiStroyProyekt, LLC, (СитиСтройПроект) an architectural planning company whose activities consist of engineering design and construction project management based in St Petersburg, and DPRK General Construction Company “Pyongyang” (Pyongyang). The agreement is believed to last until mid-2023.

Pyongyang Papers understand that this is based on a 2007 agreement between Russia and North Korea for temporary labor of the citizens of one government in the territory of the other to improve North Korean students’ professional skills whilst ‘studying’ in Russia.

Turning a blind eye

It seems the DPRK continue to ignore the UN sanctions enforced against them. Possibly partly to fund an ambitious building project under Kim Jong Un’s direction. Kim Jong Un promised in January to alleviate the capital’s housing shortage with 50,000 new homes by the end of 2025, including 10,000 in 2021 at the ruling Korean Workers’ Party.

It appears Russia is trying to turn a blind eye to the North Korean workers that continue to work in their country, but what will become of the regimes ballistic missile plans should we all continue to ignore the DPRK’s actions. Pyongyang Papers pledge to continue to highlight both countries and companies enabling sanction violations- as always please contact us if you have any information.

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 that NNK-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 with a 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.

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.