North Korean trading companies under pressure for Party Foundation Day

Seol Song Ah  |  2016-10-10 08:51
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A number of North Korean trading companies operating in China have been identified as collaborators with the Hongxiang Group of companies - which is presently under investigation for allegations of smuggling sanctioned materials to support the Norths nuclear weapons program. Daily NKs sources have reported that these same North Korean companies are now under increasing pressure from Pyongyang to provide further supplies to the regime before the Partys Foundation Day holiday on October 10. These goods are to be presented as gifts to elite cadres in order to shore up Kim Jong Uns power base.

The companies that have been suspected of colluding with Hongxiang to smuggle banned nuclear materials are facing pressure on dual fronts now. Their business activities have been almost cut in half due to the ongoing investigations by the Chinese authorities. And now theyre required to contribute goods to Pyongyang before Party Foundation Day, a source close to North Korean affairs in China reported. 

Party Foundation Day is a major national holiday in North Korea, ranking only behind Kim Il Sung and Kim Jong Ils birthdays in terms of importance. Each year, the regime seeks to reinforce loyalty from its power base (composed of high-ranking cadres) by giving them special gifts.

When asked how the trading companies are coping with the combined pressure, the source replied, The heads of these trading companies are being investigated by the Chinese authorities on a daily basis. So these companies have resorted to hiring Chinese companies to procure gift items like alcohol, fruit, and food products for them. After the North Korean managers are released from the interviews, they load up the purchased items on trucks and send them over the border into North Korea.

Those who are unable to keep up with the pressure face dire consequences. The Party Foundation Day holiday is understood to be a loyalty competition among the foreign currency-earning operations. All enterprises are required to provide basic planning funds, loyalty funds, and gifts. Falling short of these obligations is dangerous because those deemed responsible are regarded as politically problematic. In North Korea, earning such a label can result in extreme punishments, including execution.   

Such conditions have only intensified during the Kim Jong Un era, where even slight infractions have led to purging and punishment. The increasingly severe consequences are well recognized by all overseas foreign currency earning operations, explaining why they prioritize the submission of loyalty funds over the safety of themselves and their employees.

The source added that, North Korean trading companies in China regard extra holiday payments as standard operating procedure. Only by fulfilling their quotas for funds and products can the managers escape punishment upon return to North Korea.

According to another source in Dandong, the Chinese border authorities originally planned to take a nine day break and suspend customs services beginning on October 1 to celebrate their National Day. However, that plan was changed following a direct request from Pyongyang to keep customs open. Although the North Korean authorities reportedly explained that it was essential to keep the border open to facilitate imports of flood relief supplies, it can be observed that most of the products presently coming over the border are gifts intended for cadres.  

Asked about the specific efforts of these companies, she said, Because of Party Foundation Day (October 10), the trading companies in China are more worried about sending loyalty donations than they are about the investigations by the Chinese authorities. Until just a short time ago, we saw many of these companies focus on flood relief supplies, but now theyve switched gears.

However, their attempts to purchase such items through their partners in the Chinese companies are not as easy as they once were. The current climate is one of suspicion and caution due to the ongoing investigations. As a result, those North Korean companies that have been associated with the Hongxiang Group are facing an increasingly difficult time, she concluded.

*Edited by Lee Farrand

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