Reports last week claimed that, according to “sources familiar with North Korean affairs,” North Korea had shut down Bureau 39 of the Workers’ Party — responsible for obtaining hard currency by any means necessary, including illicit activities — and Bureau 38, responsible for managing the regime’s overseas funds.
Are any of the reports true? My default position about any “insider” reports from Pyongyang is skepticism, and a quick Google search reveals that we’ve heard many versions of this story before. For example, Office 38 has variously been reported to have been merged into Bureau 39 as early as 2009 (Yonhap), restored in June 2010 (Chosun Ilbo) and February 2011 (Reuters), and then merged into the Moranbang Bureau, another government entity in October of this year (Kyodo). At the very least, it’s hard to believe these reports could all be true, and kremlinologist Ken Gause correctly cautions against taking even the most recent ones at face value. Changing the names of the organizations may be nothing more than a superficial way to dodge Treasury Department sanctions, most recently reaffirmed in Executive Order 13,551.
Even if North Korea really did merge, split, and rename these organizations so many times, it seems unlikely in the extreme that it would cease its counterfeiting, drug dealing, money laundering, or other illicit activities. This recent report from the Carnegie Endowment, and these from the Financial Action Task Force — one of those truly effective international organizations you seldom hear about — suggest that North Korea continued with its illicit activities and the laundering of their proceeds right up to last week. Current reports suggest that the regime is under severe financial stress and needs those sources of hard currency more than ever. The reorganizations could also be part of some internecine power play, consolidating all-important sources of income in the hands of a dominant faction. Either way, if the mergers and revivals of the last two years didn’t affect North Korea’s illicit intent, this year’s changes (assuming there are any) probably won’t, either.
There is another reason to question the veracity of the reports: their source, Kyodo News. Kyodo recently sent a delegation to Pyongyang, which performed a ritual prostration before the statues of North Korea’s dead dictators and then met with Kim Yong Nam. This suggests that Kyodo is interested in opening its own AP-style bureau in Pyongyang, and also that Kyodo sees itself as having an inside track with the sort of “exclusive” North Korean sources that would arouse suspicion in more sober minds.