The North Korean Criminal State, its Ties to Organized Crime, and the Possibility of

[GackMan]

Interesting read.

It isn't new info, just food for thought. Sweden expelled the DPRK's ambasador for heroin smuggling in 1976. Hard currency hasn't gotten any easier for them to obtain in the last 30 years.

Discuss...



http://www.nautilus.org/fora/security/0592Asher.html

Policy Forum Online 05-92A: November 15th, 2005
"The North Korean Criminal State, its Ties to Organized Crime, and the Possibility of WMD Proliferation"

By David L. Asher

I am very pleased to be invited back to the Wilson Center to speak today. I enjoyed my time here this summer and want to thank my colleagues for the chance to be affiliated with the Center, which I consider the finest organization of its kind in Washington. I also wish to thank my former boss, Assistant Secretary Jim Kelly and the many members of our inter-agency team for kindly attending today. In particular, I want you to know of the extraordinary work that our friends and colleagues here from the United States Secret Service have done recently to safeguard our nation and our currency from a determined adversary.

I left the State Department in July and I want to be very clear that my remarks today are personal in nature. They in no way should be interpreted as representing the view of the US government, the Department of State or the Department of Defense. They also are drawn strictly from unclassified sources (the vast amount of information now in the public domain is indicative of the scale of the problem of DPRK criminality).

Let me make clear, I am a believer in the Six Party Talks. I applaud the efforts of my former colleagues, Chris Hill, Joe Detrani, and Jim Foster to effect positive diplomatic movement via direct dialog and clearly demonstrate to all the parties seated at the big table within the Diaoyutai State Guesthouse that the US is sincerely willing to join the international community in engaging North Korea to facilitate its denuclearization, its economic development, and its opening to the outside world. At the same time, given this objective, there should be no further room for tolerating the unacceptable and in many ways outrageous criminal and proliferation activities that the North Koreans continue to engage in.

Allow me to begin my remarks by laying out the major aspects of North Korean trans-national criminal activity. I will then look at the specific question of how the DPRK's growing ties to Organized Crime groups and illicit shipping networks could be used to facilitate WMD shipments. I'll propose a possible way to reduce this risk. I will conclude by frankly commenting on the nature of state directed criminality in the DPRK and its implications for international law and the DPRK's status in the international community and the United Nations.

My research topic this summer at the Wilson Center was on the rise and fall of "criminal states" - government's whose leaders had become intimately involved with trans-national criminal activity. I compared North Korea under Kim Jong Il with Serbia under Milosevic, Romania under Ceausescu, and Panama under Noriega. I won't get into the details of this comparative research now but, suffice to say, the scale and scope of the other cases pale in comparison with present-day North Korea.

The rise of the criminal state in North Korea is no secret. It has occurred in full view of foreign governments and with increasing visibility to the world media. Over the last three decades agents, officers, and business affiliates of the DPRK have been implicated in hundreds of public incidents of crime around the globe. Incidences of illicit activity have occurred in every continent and almost every DPRK Embassy in the world has been involved at one time or another. This should be no surprise. North Korea is perhaps the only country in the world whose embassies and overseas personnel are expected to contribute income to the "Party Center," not rely on central government funds for their operations. Such repeated illicit actions from diplomatic premises amount to a serial violation of both articles 31 and 41 of the Vienna conventions on Diplomatic Relations, which respectively convey that A. commercial, and most certainly, criminal activities for profit shall not be conducted by accredited diplomats or via accredited facilities and B. mandate that officials posted abroad must obey the laws of the nation to which they are posted. The DPRK routinely pays no attention to either critical provision of the Vienna conventions.

I am frequently asked "how much is this stuff going on?" Although it is hard to pin down the exact scale of the illicit activity we can make a rough guess. In 2003 the DPRK ran a trade deficit of at least $835 million and that if more broadly measured to exclude concessionary trade with the ROK was more like $1.2 billion. Even making a very bold estimate for informal remittances and under the table payments for that year, the DPRK probably ran a current account deficit of at least $500 million. Moreover, North Korea's accumulated trade deficit with the ROK and China alone since 1990 is over $10 billion. North Korea has not been able to borrow on international markets since the late 1970s and has at least $12 billion in unrepaid debt principal outstanding. Yet, until recently - at least - it has managed to avoid self-induced hyper-inflation (which should have occurred given the need to reconcile internal and external monetary accounts, even in a communist country). Instead, the street stalls in Pyongyang and other North Korean cities seem to be awash in foreign made cloths, food, and TVs and the quality of life of the elite seems to have improved. What's apparently filling the gap and accounting for the apparent improvements to the standard of living for the elite? The short answer as I see it: Crime. And if I am right, then the criminal sector may account for as much as 35-40% of DPRK exports and a much larger percentage of its total cash earnings (conventional trade profit margins are low but the margin on illegal businesses is extremely high, frequently over 500%).

Whatever the precise size of the criminal surplus, all analysts and law enforcement authorities agree that overseas illicit and weapons trading activities have become increasingly important sources of foreign exchange for the DPRK. These earnings have provided support to North Korea's "military-first" economy and contributed to Pyongyang's ability to resist demands from the international community for an end to its nuclear weapons program. They also apparently have persuaded the Kim Jong II regime it can affordably maintain its political isolation and resist the imperative for sweeping economic and social reforms that all other communist states have had to engage in. Given that periodic exposure of illegal dealings by North Korean officials overseas in the past has not resulted in serious or lasting consequences, Pyongyang may believe that an open door for global criminality exists.

...

Follow the link for the whole thing, it is about 15,000 charaters past the limit.

[aricbcool]

Gackman,

That was a good read. Thanks for posting it. It's definitely true that North Korea needs to be held accountable for its actions. At this point, with talks on hold, we'll see. They did sign a "statement" that said they would eventually disarm, but the latest news is that they're demanding a light water nuclear reactor first.

I think the nuclear issue is the biggest one right now, but their willingness to use international crime as a way to bolster their economy cannot be ignored either.

The biggest problem with DPRK is its explosive nature. They're like a madman with a gun. All of their demands are attached to an "or else we'll shoot" statement.

Add to that their isolationist communist regime and you have a situation in which it will be very hard to verify that they have disarmed, or that they ever had nukes to begin with.

Ultimately, I think it'll come to a showdown as that's what the North Koreans seem to want so much.

Any thoughts from the pros on this?

--Aric

[The Reaper]

Originally Posted by aricbcool

Gackman,

That was a good read. Thanks for posting it. It's definitely true that North Korea needs to be held accountable for its actions. At this point, with talks on hold, we'll see. They did sign a "statement" that said they would eventually disarm, but the latest news is that they're demanding a light water nuclear reactor first.

I think the nuclear issue is the biggest one right now, but their willingness to use international crime as a way to bolster their economy cannot be ignored either.

The biggest problem with DPRK is its explosive nature. They're like a madman with a gun. All of their demands are attached to an "or else we'll shoot" statement.

Add to that their isolationist communist regime and you have a situation in which it will be very hard to verify that they have disarmed, or that they ever had nukes to begin with.

Ultimately, I think it'll come to a showdown as that's what the North Koreans seem to want so much.

Any thoughts from the pros on this?

--Aric

I think that the Klinton administration tried the carrot before the stick approach and the NKs cheated and took everything they could get while continuing to develop nuclear weapons.

Looks like they are trying the same trick again.

Fool me once, shame on you....

TR

[Trip_Wire (RIP)]

Originally Posted by The Reaper

I think that the Klinton administration tried the carrot before the stick approach and the NKs cheated and took everything they could get while continuing to develop nuclear weapons.

Looks like they are trying the same trick again.

Fool me once, shame on you....

TR

I have to agree with you 100% TR! IMHO trying to negotiate with the North Koreans is a waste of time!

[Huey14]

International Relations AND Organised Crime- my two favourite subjects.

Cheers for the article.

[aricbcool]

Thanks TR and TW.

It's hard to believe we're still providing aid to that country after all that's happened.

The question is, do you think we're playing softball because we're busy with Iraq and A-stan?

Or are we headed for a fool me twice?

--Aric

[The Reaper]

Originally Posted by aricbcool

Thanks TR and TW.

It's hard to believe we're still providing aid to that country after all that's happened.

The question is, do you think we're playing softball because we're busy with Iraq and A-stan?

Or are we headed for a fool me twice?

--Aric

You want to talk about crime, you should see how much counterfeit money the NKs have produced.

We are talking to them because they have nukes, the South Koreans and Japanese are our allies, and because they are lunatics, with the king of all nutballs as their leader.

TR

[GackMan]

It is very much a waiting game... if Kim Jong Il kicks the bucket we will have a lot more options.