Smuggling operations heat up, feature state-civilian cooperation

Yeom Seung Cheol  |  2018-04-16 19:24

A North Korean soldier provides assistance during a smuggling operation along the Chinese border.
Image: Daily NK photo archive

Trading companies and donju (North Koreas nouveau rich) are actively involved in smuggling operations in the Ryanggang Province region, according to new testimony from a defector. Largely seen as a way to circumvent the international sanctions campaign targeting the North, military personnel from both countries (border guards and frontier guards) are also said to be actively involved.   

The information comes from the testimony of a Mr. Lim (pseudonym), who left North Koreas Ryanggang Province, Samjiyon County in the fall of 2017. The smugglers moved about in groups of 20-30 people, and Ive even seen groups as large as 50, Mr. Lim told Daily NK during a recent interview. There was a lot of smuggling being managed by the donju, not just the state trading companies.   

The donju have earned significant profits and employ teams of people in the smuggling business. This is one example showing that even North Korea is becoming a market economy, Mr. Lim said.

Employees are hired by the donju for specific tasks, such as porters who carry the goods across the border. First, people with experience are recruited, and then people without experience are trained, Mr. Lim said. There are even recruiting agencies to connect the smuggling outfits with applicants.  

A wide variety of goods produced in the Mt Paektu region are smuggled. Mr. Lim noted that larch tree cones and vines are moved for sale, as well as medicinal ingredients found on the mountainside like dandelion roots and angelica plants.  

In many cases, individuals will load up about 50 kilograms worth of the goods in bags and cross the Tumen River into China to sell them. The labor is extremely intense. The amount you have to pay in bribes is significant, so its best to load up with a lot of product, people say. The donju dont bother employing people unable to carry more than 30 kilograms, Mr. Lim said.

When asked if Chinas implementation of sanctions was affecting business, Mr. Lim said, Its not a problem at all. The Chinese merchants have taken the necessary measures. The frontier guard doesnt patrol the border roads. Bribes have already been given.   

He added that there werent any major issues on the North Korean side of the border either, explaining, They dont mind because smugglers generally return; theyre not trying to escape. The smugglers leave in the evening and dont even stay the night before crossing back.

The North Korean border guards are actively involved in the smuggling operations. In exchange, they can demand up to 50% of the total profit from the donju.

Asked about this, Mr. Lim said, This amount is factored into the market cost. The remaining amount is split between themselves and the porters. The porters get 20% of the total profit and the donju get the remaining 30%.

This means that if the total profit from a days smuggling operation yields 10,000 yuan ($1,590), 5,000 yuan goes to the border guards, 3,000 goes to the donju, and 2,000 is split between all of the porters (as mentioned, there are sometimes groups as large as 50).  

The porters are paid according to the size of their haul, earning about 0.8 yuan per kilogram. That means someone carrying 50 kilograms only earns 40 yuan ($6.40). Mr. Lim said. Although the amount earned is disproportionate to the intensity of the labor by Western standards, four such runs a month can earn 200 yuan - enough to purchase 48 kilograms of rice in North Korea.

Smuggling is an opportunity for the border guards, the donju, and locals to earn money, said Mr. Lim. Therefore, unless the Ministry of State Security (MSS) steps in, it will continue to occur.

North Koreas foreign currency earning agencies are also involved in illegal smuggling operations. All entities going through North Koreas customs office are required to hand over 30% of their profit to the authorities. Smuggling allows them to circumvent this costly expense.  

There are other reasons to resort to smuggling as well. Certain products are deemed illegal by the authorities, so it remains impossible to obtain permission to trade them through the official routes.

The MSS knows all about this. But they have to learn a living somehow, so what are they going to do? The MSS is also involved in shipping kilogram batches of bingdu (methamphetamine) to China to earn money. Mr. Lim said.

Daily NK reported last month that North Koreas intelligence agencies are working with Ryanggang Province border guards to earn money for the Party through smuggling operations.
 
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