KCNA
5/23/2006
An agreement on trade between the governments of the DPRK and Brazil was signed here on Tuesday. The agreement was inked by DPRK Minister of Foreign Trade Rim Kyong Man and Brazilian Ambassador to the DPRK Luiz Augusto de Castro Neves.
From the Daily NK:
On the 15th, Tokyo Shinbun reported that “At the inspection on board by Japanses Maritime Safety Department, it has been confirmed that fake Japanese cigarettes produced in North Korea have been delivered to South Korea and Taiwan”.
Although the US has recently announced that the most profit-making illegal activity that North Korea is involved in is production of fake cigarettes, it is the first time that physical evidence is obtained.
Japanese Maritime Safety Department analyzed the testimony of the crew and information obtained by reconnaissance satellite, and concluded that ships dock at Wonsan, Chongjin and Najin to leave with fake cigarettes. It is suspected that the goods are transferred to ships that belong to Taiwanses or South Korean mafia on the sea of Taiwan or Busan.
There are tens of different kinds of fake cigarettes, including Japanese such as Mild Seven, Seven Star and American, such as Marlboro.
Production of Fake Cigarettes started with Growing Opium
When and how did production of fake cigarettes start?
It is almost the time of order to “grow poppy” by Kim Jong Il in November 1992 that production of fake cigarettes started.
At the time, much effort was put into creating a cigarette-production base in North Hamkyung Province. Grain Factory at Hoeryong changed its name to ‘Hoeryong Food United Company’ and the cigarette factory under it was expanded. After 1994, soldiers discharged from their duty were put into ‘4.25 farm’ where they produced the raw material for cagarettes. 4.25 farm was built where #22 political prison camp used to be, in Changpyong, Hoiryeong City.
The area centered around 4.25 farm is known for the good quality of cigarettes in North Hamkyung Province. Especially, “Poisonous” cigarette (contains high nicottine) in Ryonggye, Saebyul, near 4.25 farm is known to be the best of the best.
The average cigarette in South Korea “THIS” has 0.65mg of Nicottine, while the ‘poisonous cigarette’ has about 1.5mg. Even a habitual smoker needs to mix in tobacco. Well-known tobacco is produced in Yunsa, North Hamkyung Province.
The poisonous cigarette from 4.25 farm and tobacco from Yunsa have potential to be the raw material for high quality cigarette such as Mild Seven and Seven Star. However, it seems that it has been hard to produce high quality fake. It has been heard that raw material is imported from foreign countries.
“North Korea Is Fit For Production of Fake Cigarettes”
North Korea is fit for production of fake cigarettes in terms of domestic and international environment. In other countries including China, production of fake goods is strictly controlled and is illegal. However, it is not so in North Korea. A brandname for North Korean cigarette ‘Sweetbrier’ produced in Pyongyang factory is also made in Soonchun cigarette factory in South Pyongan Province and other thousands of domestic factories.
Domestic factory means a co-op where goods are produced using the leftovers from factories. Kim Jong Il started the movement on 3 August 1984, which is why the movement is called ‘August the 3rd Movement for Production of Goods By The People”.
In North Korea, the order from Kim Jong Il turned itself into a commercial activity where fake goods are produced and sold to the people. Accordingly, production and transaction of fake goods are not illegal in North Korea.
Main customer for the fake cigarettes is foreign small and middle scale businesses. Especially in China, as the regulation has gotten stricter, the fake cigarette producing factories turned to North Korea. North Korea smuggled machines and raw materials from China to cigarette factoriesin places such as Pyongyang and Hoeryong to produce fake cigarettes.
Production of Fake Cigarettes Was Run By the Government From The Beginning
North Korea supplies labor and factory, while Chinese companies took charge of supply of raw material and circulation. It is hard for fake cigarettes to be circulated through legal procedure. Therefore, the deal needs to be made with international mafia.
The analysis coincides with the testimony of a North Korean defector (51) who has delivered raw material for cigarette from foreign countries to Pyongyang cigarette factory. He did not want to reveal his identity, but he said he clearly saw a cigarette paper and packs with foreign language on them in 1996.
Japanese Maritime Safety Department said North Korea started producing fake cigarette when it became difficult for them to produce and smuggle stimulants such as opium, which is not a correct analysis.
Production of cigarette in North Korea started when Kim Jong Il order to grow poppy in November 1992. Production of cigarette was not started in order to replace the production of opium, but was managed by the government from the beginning.
From Yonhap:
A Chinese delegation of avian influenza experts arrived in the North Korean capital of Pyongyang on Sunday, according to state media there.
The Chinese group visited the statue of former North Korean leader Kim Il-sung in downtown Pyongyang, said the (North) Korean Central Television Broadcasting Station, monitored here, but it did not report the purpose of the group’s visit.
The Chinese government has donated equipment and material to North Korea to conduct an examination for bird flu, and on Wednesday signed an agreement with Pyongyang for cooperation regarding examination and possible quarantine measures.
North Korea has not reported a case of bird flu ever since an outbreak earlier last year was brought under control.
From Yonhap:
North Korea continues to buy raw materials and components from various foreign sources for ballistic missiles despite announcing in 1998 that it would suspend missile tests, according to a recent U.S. intelligence document.
“North Korea is nearly self-sufficient in developing and producing ballistic missiles, yet continues to procure the required raw materials and components from various foreign sources,” the report said.
The “Report to Congress on the Acquisition of Technology relating to Weapons of Mass Destruction and Advanced Convention Munitions” was submitted by the office of the director of national intelligence to Congress earlier this month.
The report said that in 2004, North Korea continued to abide by its voluntary moratorium on flight tests adopted in 1998 and reaffirmed in May a pledge made in September 2002 to extend the moratorium beyond 2003.
The 15 intelligence services, including the Central Intelligence Agency (CIA), also expressed caution about the kind of sensitive material North Korea could potentially sell.
“We remain concerned about North Korea’s potential for exporting nuclear materials or technology. At the April 2003 trilateral talks in Beijing, North Korea privately threatened to export nuclear weapons. During the third round of six-party talks on the North Korean nuclear issue in June 2004, Pyongyang included a ban on nuclear transfers in its nuclear freeze proposal,” the report said.
It added that inspectors from the IAEA (International Atomic Energy Agency) recovered two tons of uranium hexaflouride from Libya in May 2004 that was linked to the North.
From Joong Ang:
Hyundai Asan Corp., a Korean company spearheading inter-Korean economic projects, said yesterday it is pushing to expand its tour program for a scenic North Korean mountain resort open to South Koreans.
North Korea has opened the outer part of Mount Keumgang on its east coast to South Koreans since 1998. Hyundai officials said the North has agreed to consider opening the inner side as well to South Koreans.
Before developing full-fledged tours to the inner side of the mountain, or Naegumgang, Hyundai Asan plans to hold an experimental tour to the area on May 27.
Hyundai Asan hopes that the new tours will help it bring more South Korean tourists to the North. More than 1 million South Koreans have visited the resort since 1998 but it was not enough to break even.
Hyundai Asan executives, including Hyundai Group chairwoman Hyun Jeong-eun, and North Korean officials will join the test tour.
The new tours to be developed cover 50 kilometers of trails dotted with ancient temples and valleys that would give visitors a new sense of the beauty of the craggy resort, Hyundai Asan officials said.
PYONGYANG ― In a rare visit to this reclusive communist country, a group of South Korean government officials, journalists, businessmen and economic experts attended a series of investment promotion events arranged this week by the North Korean government.
At a trade fair, South Koreans toured bustling booths set up by North Korean and foreign firms, and witnessed North Koreans buying goods there with U.S. dollars in their hands ― an indication that Pyongyang’s limited foray into capitalism, which began in 2002, is slowly progressing in the North’s strictly controlled economy.
The delegates on Wednesday visited the 9th Pyongyang International Trade Fair, where 196 companies from 12 countries set up booths. The delegates were allowed to look around the fair freely. Of the participating firms, 21 were from North Korea and the rest came from 12 other countries, including China, Russia, Spain, Sweden, Syria, Italy and Thailand.
At the fair, Jeil Trust Bank, a North Korean bank, advertised its savings account programs for foreign currency deposits. Cars, bicycles, tires and machinery made in the North were also displayed.
About 1,000 Pyongyang residents and North Korean businessmen also attended the fair, and most flocked around the sales booths of Chinese appliances. Some North Koreans purchased handbags, pots and other goods, making payments with dollars.
The 72-member delegation also visited a glass manufacturing facility southwest of Pyongyang on Wednesday. Daean glass factory, completed in October, was built with a $20 million investment from China. About 30 Chinese technicians are also training North Korean workers at the plant.
“In early 2000, North Korea decided to shut down all its glass factories, and decided to build a new plant,” Pak Jong-ung, deputy manager of the plant, said. “China learned about the plant and invested in it.”
The South Koreans also toured a ship repair plant in Nampo, South Pyeongan province. At the Yongnam factory, Cha Son-mo, senior North Korean maritime affairs official, gave a presentation. “Last year, we finished the second dock, capable of repairing a 50,000-ton ship,” Mr. Cha said. “Please use our facility to promote inter-Korean economic exchange.”
Jeong Nam-su, senior planning manager of STX Corporation, a South Korean ship maintenance firm, said the facility was better equipped than he expected. “It is also surprisingly modernized,” Mr. Jeong said. “I am considering asking the North Korean factory to repair one or two ships after I return to the South.”
On Tuesday, the group attended an investor-relations session hosted by the North’s Trade Ministry, with simultaneous translations into Chinese and English available. About 70 foreign investors attended. It is the first time South Koreans were invited to such an event. Rim Tae-dok, the trade ministry’s councilor, gave the presentation, promising tax benefits and land leases at low prices.
The delegation visited Kim Chaek University of Technology and Kim Il Sung University and toured Mount Myohyang. The group, which began its trip on Monday, will return to Seoul Saturday.
Froom the Daily NK:
5/18/2006
Approximately one million crossed the DPRK/PRC border back and forth during the food shortage. Today, the border area is where most recent, accurate information about North Korea can be obtained.
China stationed soldiers from Shunyang military district to the North Korea-China border three years ago. The border line of North Korea including Yalu River and Tumen River is 1,376.5 km. North Korea-China border is 1,360km, and North Korea-Russia border line is 16.5km.
North Korea has 100-110 thousand strong ground forces on the border area in order to control the inflow of information from outside and the illegal smuggling and border transgression of North Korean defectors. It means that each soldier guards 14m.
Ground Forces on the border increased rapidly after the treaty of friendship between China and South Korea
The reinforcement of the border in the 1990s has much to do with the change in international politics including the demise of the Cold War the growth of friendship between China and South Korea. Until the early 1990s when North Korea sustained the “blood alliance” with USSR and China, North Korea only focused on increasing the military power on north of the 38ty parallel.
Kim Jong Il said in regards to the treaty of friendship between South Korea and China, “38th parallel is outpost for the military power, while the [chinese] border is outpost for the ideology”. North Korea reorganized the military to reinforce the border control.
In 1992, the Department of Military Mobilization in various parts of North Korea recruited high school and middle school students, office workers and farmers to organize the border control.
In 1992, the responsibility for border control and coastal defense was delegated from National Security Agency to Border Control Command under Ministry of People’s Armed Forces. The Coast Guard was assigned under military base under Ministry of People’s Armed Forces in each district. Border Control Command was located in Ganggye, Jagang Province, but was moved to Pyongyang in 2002.
The Military Force of the Border Control
A North Korea defector Heo Yong Sun (43) who used to be a border guard says there are 4 Brigades, including Division 10 (located at Baeksa dong) in ShinEuiJoo, Brigade 32 in Chongjin, Brigade 37 in Jagang Province, Brigade 44 in Yanggang Province. Division 10 at ShinEuijoo has 14 battalions, which is qualified for division.
Mr. Heo says the border control brigades have 11 battalions on average. One brigade operates 4,000-5,000 soldiers and one battalion has 350 soldiers. There are 3 companies of 100 soldiers under battalions, and companies cover platoons and guard posts of 30 soldiers.
Mr. Lee Chul Young (34) who used to be a commander of a military district of Border Control and entered South Korea in 2004 says, “There are cavalry brigade and tank brigade under the Border Control Command, and the military force amounts to over 10~30 thousand soldiers. Companies have 250~300 soldiers and one battalion has more than 1,000 soldiers, which shows that the scale of military force is different from other People’s Armed Forces.
The smallest unit of Border Control is a platoon. One platoon is in charge of 3km, and one platoon has 12 guard posts. Guard posts have round of inspections during the day, and at nights, 2~3 soldiers are on a stakeout. They are on guard in three shifts a day.
For night time guards, 3~4 soldiers are mobilized including the commander of the platoon, and one agent from National Security Agency is included. A post for the stakeout is a half-underground cave where the soldiers can have a 120 degree view on China.
Border guards are equipped with AK Automatic Rifle-58 and 68. A commander and high level soldiers are equipped with cartridge and low level soldiers are supplied with blank cartridge. On the border, gunfire is preferably restricted, and when someone wanted by the National Security Agency intrudes the border line, gunfire is allowed.
One advisor from National Security Agency was assigned for each platoon since 1999. However, the advisors encouraged illegal border transgressions with bribery, which caused the Ministry of People’s Armed Forces to assign one advisor at each company since May 2002.
Border guards aim to “Earn Three Hundred Thousand Won” causing costs to rise for transgressions.
The biggest wish for the border guards is to make money while in the military. They are on the lookout for border transgressors rather than protecting the border from intrusion of spies. Until 1990s, the soldiers tried to “earn thirty thousand Won”, but it changed to three hundred thousand won because the currency depreciated.
Border Control Command shifts around the border guards at Pyongan, Yanggang and Hamkyung Province every two years in order to prevent frequent corruption of the soldiers. It is understood that two years is enough time for the soldiers to get down to cooperating with the locals to receive briberies.
Mr. Lee Chul Young said, “On fortunate days, it is possible to earn couple hundred thousand won. Commanders are involved in smuggling through Foreign Currency Earning Organizations, and lower officials make small money through controlling the border transgressors”.
The cost for border transgression rose after the order to control the border. In 2004, the transgressions cost 300 Yuan($40), but it rose to 500 Yuan ($65) and to 800 Yuan ($120) now.
North Korean defectors who crossed the Tumen River recently said, “You have to pay 500~1,000 Yuan for lower officials and more than 1,000 Yuan for the Commanders (Generals)”.
Transgression in the winter is the cheapest. However, around March when the ice melts on the river, the border guards have to go through the difficulty of wearing rubber pants and helping the transgressors cross the river, which costs more than 1,000 Yuan.
From the Donga:
On May 16, Korea and the Association of Southeast Asian Nations (ASEAN) reached an agreement on the modality for freeing their goods, a core part of a free trade agreement (FTA). Under the agreement, the goods produced in North Korea’s Gaesong industrial complex will be recognized as Korean if the products meet certain terms.
The Office of the Minister for Trade announced that Trade Minister Kim Hyun-jong and trade ministers from nine ASEAN members signed an agreement on FTA goods trade on this day in Manila, the Philippines, leaving out Thailand for the time being.
The Korean government plans to ask the National Assembly to ratify the agreement in the regular session in September so that it can take effect within this year.
Only 100 items out of the products made in Gaesong industrial complex will be recognized as “Made in Korea,” as long as more than 60 percent of the materials from which they are made are of South Korean origin or if the added value of South Korean materials put in the product is more than 40 percent.
Kim Han-soo, FTA bureau chief, said, “If needed, Korea can make a request for a change in the items recognized as Korean made.”
According to the agreement, Korea and ASEAN are bound to remove tariffs on 90 percent of the number of import items and of the import amount respectively by 2010.
Tariffs on “sensitive items” including squid, mushroom, and pumpkin will be lowered to 0 ~ 5 percent by 2016. “Highly sensitive items” will be excluded from the market opening and be protected by means of a limited level of tariff cut by 2016 or a tariff rate quota.
Forty-five items such as rice, chicken meat, live or frozen fish, and most fruits are protected from the opening.
The Office of Minister for Trade said, “This is the first FTA which Korea signed with the fifth largest export market.” And it also predicted, “In the mid to long term, the FTA with ASEAN is expected to increase Korean exports to the ASEAN region by $10 billion and trade surplus by about $6 billion annually.”
A group of 72 South Korean businessmen, government officials, academics and journalists toured a manufacturing company in the capital of communist North Korea yesterday, the second day of their visit. The delegates also visited the Korea Computer Center and the Grand People’s Study Hall ― the country’s central library ― and attended an investment promotion session conducted by the North’s Trade Ministry.
During their visit to the Pyongyang March 26 Cable Factory, the group surveyed production lines and automated manufacturing facilities as well as finished products. They were allowed to speak to the factory managers, who oversee 1,500 workers producing 10,000 cable products. With $2 million investment from pro-Pyongyang Koreans overseas, the factory upgraded its facilities recently.
“We hope to adopt the more advanced technology of the South in the future,” Kim Seok-nam, head manager of the plant, said. “I want to nurture this factory, one of the most representative plants in Pyongyang, as a global manufacturer.”
Mr. Kim said the factory is operated 24 hours a day in three shifts. “We purchased a Swedish wire drawing machine recently and that reduced our electricity consumption and increased production.”
The South Korean visitors expressed surprise that the North Korean factory was better equipped than they had expected it to be.
“There is still room for improvement, but the North’s manufacturing facilities are much more modernized than I thought,” said Hwang Eun-yeon, a manager with Posco. “With South Korea’s support and cooperation, the North will be able to make improved products.”
The South Koreans toured the Korea Computer Center, a state-run software developer. The North’s word processor program and a medical test program were presented to the rare South Korean visitors. A cerebral vessel measurement machine, developed by the computer center, is currently on sale in the South at the price of $20,000 per unit. Among the delegates, the businessmen showed particular interest in a Korean version of the Linux operation system that had been developed by the North.
“We have sent 200 specialists to China for training and joint development,” Kim Chol-ho, vice president of the computer center, said. “We want more active exchanges with South Korean information technology companies.”
The computer center was built in 1990 with funding from North Korean residents in Japan, and the Cabinet’s software industry bureau has been overseeing the institute since 2002. The center employs about 1,500 elite graduates of North Korea’s science schools with special funding from the government.
The delegates also attended an investment relation session hosted by the North’s Trade Ministry in the afternoon. The group is scheduled to attend the International Trade Fair and visit a glass product manufacturer today.
From Yonhap:
Two rival groups for Koreans living in Japan, divided by their loyalties to capitalist South Korea and the communist North, on Wednesday reached an epochal deal to end half a century of animosity.
The agreement came at a 40-minute meeting in Tokyo between the leaders of the pro-Seoul Korean Residents Union in Japan, known as Mindan, and the pro-Pyongyang General Association of Korean Residents in Japan, or Chongryon. It was the first time for the two groups’ leaders to ever have such a meeting.
Mindan and Chongryon are the two largest groups representing more than 600,000 ethnic Koreans in Japan, mostly descendants of Koreans who moved here voluntarily or were forced to during Japan’s 1910-45 colonization of the Korean Peninsula.
Mindan, which claims about 500,000 members, sides with South Korea and has been at loggerheads with Chongryon, composed of some 150,000 people who have supported the North for decades.
But the two groups agreed to make joint efforts for reconciliation, according to a joint statement by Mindan’s head, Ha Byung-ok, and his Chongryon counterpart, Seo Man-sul.
The two sides will also jointly organize or participate in events to commemorate the landmark inter-Korean summit in 2000 and Korea’s liberation from Japanese colonial rule in 1945.
Mindan and Chongryon will “make joint efforts to promote education and Korean culture, as well as work together for the welfare and the rights of the Korean community,” according to the statement.
For ethnic Koreans here, experts said, the meeting between the two groups’ leaders is tantamount to the 2000 inter-Korean summit that laid the groundwork for economic exchanges and various other reconciliatory efforts.
It reflects the two Koreas’ continued efforts for reconciliation and cooperation despite the North Korean nuclear arms crisis, they added.
From Joong Ang:
Half a century of animosity based on competing loyalties to either capitalist South Korea or communist North Korea came to a symbolic halt yesterday as the two leaders of Mindan, the Seoul Korean Residents Union in Japan, and Chong ryon, the General Association of Korean Residents in Japan, announced their reconciliation here.
It was the first time that leaders representing the two organizations officially met since the founding of the two groups. Mindan was founded in 1946; Chongryon in 1955.
Ha Byung-ok, the head of Mindan’s central headquarters, visited yesterday a Chongryon office in Tokyo and held talks with So Man-sul, chairman of the pro-North Korean group. In the meeting, both sides agreed to cooperate on reconciliation efforts between the two groups.
An emotional Mr. Ha told his counterpart he had tears in his eyes while Mr. So said the moment was historically important and that both sides needed to build upon it.
Both sides will send representatives to an inter-Korean event in Gwangju, South Korea, to commemorate the June 15, 2000, summit meeting between then South Korean President Kim Dae-jung and the North’s leader Kim Jong-il. The two sides also agreed to co-host an event in Japan on Aug. 15 to commemorate Korea’s 1945 liberation from Japanese colonial rule.
In addition, the groups agreed to jointly promote ethnic education and culture to maintain their ethnic Korean roots and to work together to promote the status of ethnic Koreans in Japan.
Experts say the reconciliation between the two organizations is due to the improving ties between Seoul and Pyongyang and the recent election of Mr. Ha, who has been preaching reconciliation.
Nevertheless, since the move has been largely driven by Mr. Ha, there is some opposition inside the organization. In addition, the decreasing membership of Chongryon, from a peak of 200,000 members to about 50,000, along with recent pressure from the Japanese government on the organization through tax investigations, has also led to the cooperation, analysts say. Chongryon is a major source of foreign currency for North Korea. Mindan claims a membership of 500,000.
The shrinking population of ethnic Koreans in Japan and the marriage of ethnic Koreans to Japanese citizens has raised the sense of urgency by the groups to maintain their foothold in Japanese society.
From Korea times:
It is uplifting to hear that the leaders of pro-Seoul and pro-Pyongyang Korean residents in Japan got together Wednesday and agreed to end decades of confrontation between their groups. The hugging and hand-shaking between Ha Byong-ok, leader of the pro-Seoul Korean Residents Union in Japan (Mindan) and So Man-sol, chairman of the pro-Pyongyang General Association of Korean Residents in Japan (Chongnyon) at the latter’s headquarters signified the end of the division of Korean residents in Japan.
The Korean residents groups have been at odds over the last 50 years, symbolizing the territorial division of their fatherland. The invisible barriers between the people of the two organizations in Japanese society were said to have been stronger than the DMZ dividing South and North Korea. The animosity was so intense that the members of the different groups were reluctant to talk to each other even when they lived in nearby neighborhoods.
The ideological confrontations among the Koreans were actually nothing but a waste of energy for Japan’s largest ethnic group. The division hindered their efforts to enhance their rights and interests in Japanese society. The host government exploited the division of Korean society.
The move of the two groups to break the stalemate was greatly influenced by the intentions of their home states. The conciliatory agreement is largely based on the South-North Joint Declaration issued on June 15, 2000, on the heels of summit talks between President Kim Dae-jung and the North Korean leader, Kim Jong-il. It is hoped that the historic meeting between the leaders of the two groups will help turn their long-standing enmity and confrontation into reconciliation and harmonization for Korean residents of Japan.
However, some analysts say that the pro-Pyongyang group has been faced with a lot of difficulties politically and financially lately because of the revelations that North Korean agents abducted some Japanese citizens to North Korea. They say that Chongnyon would have no choice but to rely on Mindan to remain alive in Japanese society. That’s why the conciliatory move by Chongnyon is seen as a mere strategic decision to survive their current difficulties.
However, we judge the historic meeting to be significant. Whether the meeting was purely motivated or not will soon be known. The Korean residents in Japan are hoping to achieve ethnic solidarity in Japan through reconciliation while promoting education and Korean culture to protect their ethnic characteristics.
