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.

North Korea continues to pressure its overseas workers to produce revenue with little regard for their wellbeing – slavery?

PP found reports that according to a Mauritius investigative journalist, a North Korean fishing crew based in the country was refused the permission to access medical treatment by the DPRK regime – in spite of severe illness that left the members of the crew unable to work. The North Korea government refused permission for the sick workers to even leave Mauritius despite warnings about a severe threat to life and wellbeing.

The problems of North Korean fishing crews has made headlines before, as the isolated country’s desperate economic situation forces them into waters further and further from the North Korean coast. In January this year, three members of a twelve-man crew were found dead after their boat capsized in the Sea of Japan. Four more bodies were found in a separate boat nearby. (See article here.)

Fishing is not the only dangerous industry that DPRK laborers are forced into by the regime. North Korean workers have been killed in industrial accidents all around the world, including three miners that burned to death in an explosion at a coal mine in Malaysia in November 2014. (See article here.) Construction workers building the World Cup stadium in Qatar were taking home approximately 10% of the salary they were supposed to earn, with the rest being sent straight to the regime. The amounted to approximately $100/month in pay left over for the workers to live on – less than $3.50 per day.

It is clear to PP that higher pressure on fisherman shows that ‘maximum pressure’ sanctions are having a major impact on North Korea’s economy. Since the United Nations Security Council Resolution 2371 in September last year, pressure has really increased against the state and its overseas business ventures. 2371, which bans the member states from accepting additional workers from North Korea, has been strongly implemented by some of DPRK’s previous international allies.

For example, Angola, traditionally a North Korean ally, expelled 154 North Korean construction workers in November 2017; Sudan announced the stop of all their trade and military and the U.A.E. agreed to suspend any new visas from October 2017. The pressure is only increasing!

This should all be good news for North Korea’s overseas workforce, which has long labored under a form of slavery in support of the repressive government. However, reports from human rights activists suggests to PP that North Korea continues to send workers overseas in contravention of UN sanctions and the dangerous working conditions they are facing. The numbers are unclear but between 50,000 and 80,000 North Koreans are believed to be laboring overseas, with most of them based in Russia and China. (see article here.) There are still reports of construction workers earning less than $2 an hour, a figure which looks even more worrying if the workers only actually receive 10% of their earnings.

North Korea continues to make the case for more work permits for laborers based in Russia, as well as seeking to send more workers to other countries including Uganda , Belarus and Nigeria. Former US Secretary of State Rex Tillerson’s call for African nations to end economic ties with North Korea suggests to PP that this activity remains a concern, in spite of the extensive sanctions in place. North Korea’s continued human rights abuses against its own citizens, at home and abroad, must stimulate other countries to stick firmly to UN resolutions.

The outlook for North Korean workers overseas remains difficult. Showing just how close to slavery this employment is, PP hears reports that workers have had their mobile phones confiscated to limit their access to information and to prevent defections. To get around this, the regime chooses workers who have wives and children in the DPRK so they are less likely to defect.

Without more international pressure to stop this form of modern day slavery, North Korean citizens will continue to die in unsafe mines, fishing vessels and construction sites around the world.

In a blind response to the effect of international sanctions, the North Korean regime elites continue to channel funds towards luxury goods as its people suffer

PyongyangPapers learned this week that North Korea continues to import huge amounts of luxury goods for its leaders and elites, including expensive watches and branded spirits, while its people struggle with the malnourishment due to heavy rationing of food.

In the first quarter of 2018, North Korean brokers overseas sourced cars, champagne, brandy, and Mont Blanc wristwatches to import into the isolated nation. Favorites for the wealthy elite include brandy,  scotch whiskies and the Western cigarette brands. These actions cheat tough UN sanctions on the import of luxury goods.

At the same time, inside North Korea, citizens are facing what is being spoken of as the next “arduous march” – the terrible famines of the mid-1990s when over three million North Koreans died of hunger.

Fuel shortages have had a strong impact on North Korea. The authorities demanded last year that ordinary citizens abandon their motorized vehicles in favor of the ox carts, even while shipping in luxury goods for the elites. In February, in a demonstration of how serious the shortages have become, the captain of the North Korean ManGyongBong ferry put out a mayday call (see article) after his boat ran out of fuel and low on food supplies!

Fuel shortages are also limiting the coal mines from operating at their highest capacity, causing regular power cuts and a lack of heating for many houses. PP hears that the price of electricity increased by 11% in the last two weeks of November 2017 – a devastating increase in price as winter temperatures began to move into the minus numbers.

The lack of fuel is also hurting the availability of food. PP hears that rations are now cut by half, with the white rice almost impossible to get hold of in places and cooking oil short as well. Even the army, the regime’s most important source of support, has not been spared rationing, and soldiers have complained of malnourishment. This supports recent studies on the health of North Korean military military defectors, with many found to be suffering from chronic hunger, diseases and very serious infections of the parasites and worms.

See article on defectors and parasites

The outlook for the rest of 2018 does not show much improvement. PP has learned that the North Korean Ministry of Agriculture was told by senior leadership that no fuel would be available to plough rice paddies for the rest of the year. This means fields will have to be turned by hands or by hands or by simple ox plows – greatly reducing the amount of food each farmer can produce.

With the possibility of famine approaching, the decision of North Korea’s elites to continue shipping in expensive whisky, cars and watches shows just how out of touch the regime has become, and how little they care for the ordinary people in rural areas outside of Pyongyang.