Brit pleads guilty to smuggling North Korean meth into U.S.

The U.S. Attorney’s Office for the Southern District of New York has issued a press release announcing the guilty plea of Scott Stammers, for conspiring to smuggle 100 kilograms of 99% pure North Korean meth from the Philippines to New York. The press release implies, but does not directly state, that the North Korean government itself knowingly sold the meth to Chinese gangsters, who sold the drugs to Stammers.

As Tan Lim explained, his criminal organization was the only one currently able to obtain methamphetamine from North Korea: “Because before, there were eight [other criminal organizations]. But now only us, we have the NK [i.e., North Korea] product. . . . [I]t’s only us who can get from NK.” Tan Lim further explained that, because of recent international tensions, the North Korean government had destroyed some methamphetamine labs, leaving behind only the labs of Tan Lim’s organization: “And all the, the NK government already burned all the labs. Only our labs are not closed. . . . To show Americans that they [the North Korean government] are not selling it any more, they burned it. Then they transfer to another base.” In anticipation of these geo-political complications, Tan Lim noted that his organization had stockpiled one ton of North Korean methamphetamine in the Philippines for storage. [USAO, SNDY]

The ultimate retailer was to be the Outlaw motorcycle gang. Stammers is now looking at a minimum sentence of 10 years and a potential life sentence. I previously posted on the arrests of Stammers and the other defendants here.

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“Arsenal of Terror,” 2d ed.: N. Korea paid dope dealers $40K to kill Hwang Jang Yop

South Korean prosecutors have indicted three South Korean nationals, identified only by the surnames “Bang,” “Kim,” and “Hwang,” for “bringing in methamphetamine from North Korea and attempting to assassinate” Hwang Jang-Yop, North Korea’s highest-ranking defector until his death in 2010. Let’s unpack these two criminal conspiracies one at a time, starting with the meth:

The 69-year-old, identified only by his family name Bang, and two others have been detained for producing 70 kilograms of methamphetamine at a North Korean factory in Sariwon, North Hwanghae Province, in June and July of 2000, a prosecutor at the Seoul Central Prosecutors’ Office said.

They were suspected of being contacted through another South Korean, identified by his surname Lee who died in 2004, in 1996 by a North Korean agent in China who proposed Bang and the two colleagues bring the raw materials and equipment to North Korea to produce meth.

They allegedly traveled to North Korea several times with the aid of North Korean agents and made 70 kilograms of meth there.

“It is the first time North Korean agents were found to have been involved in the production of methamphetamine, although there have been rumors North Korea tried to get foreign currency by selling meth,” the prosecutor said, asking for anonymity.

Bang and his colleagues were given 35 kilograms of meth by the North, prosecutors said, but added they have not yet found evidence the meth was distributed in South Korea. [Yonhap]

The prosecution believes the men transported “the raw materials and manufacturing equipment required for producing methamphetamine to North Korea via China in July 2000,” including “a cooling system and other goods.” There’s no way three South Koreans could have ferried this kind of gear into North Korea, much less been present at a meth factory there, without the knowledge and consent of the North Korean government. Indeed, the indictment suggests that North Korean agents were directly involved in the entire conspiracy, from beginning to end, and had the financial backing of the state.

That stands in contrast to the November 2013 indictment of a sordid group of bikers and killers for conspiring to import highly pure North Korean meth into New York. That indictment did not directly link the transaction to the North Korean government, but was arguably consistent with Sheena Chestnut Greitens’ conclusion that North Korea had opted to privatize and tax its drug manufacturing business, and outsource the transportation. The activities alleged in the indictment of “Bang,” “Kim,” and “Hwang” spanned a time period between 1998 and 2010, and may call for a reconsideration of that conclusion.

Now, let’s turn to the plot to kill Hwang Jang-Yop. Reports quoting the indictment claim that “Bang” collaborated with North Korean agents who were plotting to assassinate Hwang. The dope-dealers worked with North Korean agents on the plot for about a year, which seems like a leisurely pace for whacking a guy who’s already 86.

Seoul prosecutors said the 62-year-old South Korean initially came into contact with a North Korean spy in September 2009 in Beijing and continued to meet that agent on 10 more occasions to discuss the homicide plan. [….]

To prepare for the assassination, the 62-year-old is suspected to have handed over photographs he or she took of Hwang’s residence in Gangnam District, southern Seoul, to the North Korean spy. The person is also thought to have tried to hire criminal gang members for the actual murder. [Joongang Ilbo]

Hwang died in 2010, at age 87. Of natural causes, so they say.

In case you’re keeping count, this would be either the second or the third plot to kill Hwang that has been reported in the press, depending on whether the name of the North Korean agent “Bang,” “Kim,” and “Hwang” worked with was Ri Dong Sam.

As I noted in “Arsenal of Terror,” in June of 2010, Major Kim Myong-Ho and Major Dong Myong-Gwan of the Reconnaissance General Bureau pled guilty to a plot to assassinate Hwang Jang-Yop in a South Korean court, which sentenced each defendant to ten years in prison. The defendants told prosecutors that Lt. Gen. Kim Yong-Chol, the head of the RGB, personally assigned them to the assassination mission in November of 2009.

KBS adds the very interesting detail that defendant “Hwang” “allegedly received an order from North Korean agents in 2004 in China to assassinate a German human rights activist.” I can’t imagine who else that could possibly be but Norbert Vollertsen, who was then at the peak of his prominence.

In “Arsenal of Terror,” I examined the legal definitions of “support” and “international terrorism,” along with the history of what acts the State Department had previously cited as support for international terrorism. I found that attempts to assassinate defectors, dissidents, and activists abroad fit the legal standard. If the North Koreans plotted to kill Vollertsen, it would be the first case I’m aware of in which they targeted a third-country human rights activist for assassination.

President Bush removed North Korea from the list of state sponsors of terrorism on October 11, 2008. The Obama Administration’s official view is that North Korea is “not known to have sponsored any terrorist acts since the bombing of a Korean Airlines flight in 1987.” Discuss among yourselves.

The three defendants also engaged in some other forms of peace activism as well:

The three are also suspected of handing over military information from 2009 to 2013 to the North’s agents. 62-year-old Kim allegedly provided information on where gas storage tanks and combined heat and power plants are located and gave a North Korean agent a 2013 arms almanac from the South. Another member, Hwang, was revealed to have traveled in and out of North Korea via China in 2004 in order to kill a German human rights activist. [Daily NK]

According to The Daily NK, the charges include “manufacturing and trading narcotics” and violations of the National Security Law. It’s a reminder that while the National Security Law is certainly overbroad when used to punish non-violent speech, it also has other, more necessary provisions to punish espionage and violent crimes. Full repeal and the status quo are both the wrong answer. The law should be amended.

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N. Korea Perestroika Watch: Woman sent to firing squad for “gambling and drug use”

Did you hear the one about how Amerikkka’s prisons are filled with small-time drug offenders? Well, the workers’ paradise has solved that problem:

In mid-November 2014 in Sinuiju, North Pyongan Province, a woman in her 50s considered part of the donju [new affluent middle class] was publicly executed for “gambling and drug use,” Daily NK has recently learned.

According to Daily NK’s source in North Pyongan Province, the woman was “the wife of a North Korean trader in Dandong who was able to rapidly accumulate wealth by having Sinuiju’s wholesale market at her fingertips.”

He added, “Following an intense investigation after her initial arrest for gambling, this woman was found to have bribed officials with the Chosun Workers’ Party, the Ministry of People’s Safety, and most every law enforcement body in North Korea. Orders for her public execution were quickly handed down by the authorities as she was ‘practicing an unclean lifestyle by gambling and using drugs,’ running contrary to the accepted practices of a socialist society.” [Daily NK]

The report claims that the actual reason for her execution was that she was rich. (I guess that privilege is reserved for corrupt officials.)

So does that mean that a North Korean who makes it as far as the prison gate should consider herself lucky? If you’re asking yourself that, you must be new here. North Korea has another method for keeping its prison population down amid its own war on drugs: it maintains an “extremely high rate of deaths in custody . . . due to starvation, neglect, arduous forced labour, disease and execution.”

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Meth prices inching up in North Korea

Rimjin-gang updates us on the meth trade in North Hamgyeong, in the extreme northeast of North Korea:

I would say that the buying and selling of these substances are far more active than ever before. The price for these products is increasing. A year ago it was 100 Chinese RMB (around 16 US dollars) for 1 gram. Since the beginning of this year it has increased to 100 RMB for 0.8 gram. A small sack of product, made for only 1 to 2 uses, is sold at 30,000 NK won (around 4 US dollars). [Rimjin-gang]

I wonder if this is tied to a shortage of precursor chemicals as a result of the border crackdown. Otherwise, I’d have suspected that the loss of access to Chinese markets would have driven the price down, not up.

The source also reports that “many” cops and soldiers use meth, too:

Partner: Yes. There are many. Sometimes they go and buy eoleum by themselves. If they don’t have money with them, they’ve been known to pawn something like a bicycle. Since those who carry out the crackdowns are involved in eoleum trafficking and some of them are also users, the authorities are not able to enforce controls.

Odd. I used to prosecute guys for using meth in the American Army, and I know how quickly this stuff can spread through a unit and wreck its efficiency. For the first few months, it actually makes people better at their jobs. Later, it causes them to miss formation, sleep on the job, and finally, it turns them psychotic.

It has occurred to me that a soldier with a meth problem and no more pay to spend would trade just about anything–including an RPG-7–for an eight ball.

Look for a Part 2 to Rimjin-gang’s report in the coming days.

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N. Koreans are bootlegging liquor in Muslim countries

Last week, NK News published a detailed report on a black market in alcohol run by North Korean diplomats in Pakistan. Almost simultaneously, The Daily NK also reported that two North Korean “chauffeurs,” dispatched by the regime to Qatar, and nominally working for private companies there, had been arrested for bootlegging.

Two North Korean men are being detained in Qatar under suspicions of the distribution of illegal liquor; Voice of America [VOA] reported on September 4th, citing the Gulf Times, Qatar’s English language newspaper.

The men were alleged to have been selling the liquor to North Korean laborers there, as well as to citizens in surrounding nations, and if found guilty of the crime, will be deported back to North Korea. The Gulf Times was unable to confirm when or where the men were first arrested. [Daily NK]

Selling moonshine to thirsty construction workers is a novel, and typically exploitative, way to supplement those “loyalty” taxes expatriate workers must pay to the regime.

The report also references previous North Korean bootlegging arrests in Qatar, and arrests or investigations in India, Bangladesh, and Kuwait. According to a separate Gulf Times report from July of this year, another North Korean, who was working as an interpreter and has access to a car, was also arrested by Qatari police for selling alcohol and illegal drugs. (See also.)

North Korea’s bootlegging operations are not new, and probably as old as North Korea using diplomatic pouches to smuggle contraband and cash. Curtis Melvin points to a 1976 article in Time magazine about North Korean liquor and cigarette smuggling in Sweden and Denmark.

The earliest such report I found from the Middle East is from 2008, when “three North Koreans who converted their apartment into an alcohol factory” were arrested by Kuwaiti police, who also “seized 186 bottles of alcohol, 34 brewing barrels and gallons of alcohol.” There’s even a photograph.

Two other articles from The Arab Times, both undated, may describe separate seizures of 80 bottles and 200 bottles of liquor in Kuwait. Alcohol-related arrests of North Koreans are frequent enough there that annoyed South Korean diplomats monitor the local newspapers and ask them to clarify any reports that “Koreans” have been arrested for bootlegging.

With the exception of the NK News report from Pakistan, the reports do not directly implicate North Korean diplomats, but it’s difficult to imagine that overseas North Korean workers, whose movements and remittances are always carefully monitored — indeed, who have no means to send money home to their families directly — would engage in such activities without tacit official approval, and without being expected to hand the proceeds over to their regime handlers. The Chosun Ilbo described the arrangement this way, in a 2009 interview with a source in Abu Dhabi, in the UAE:

One source in Abu Dhabi said, “North Korean workers make between $300 and $500 a month, but the North Korean government confiscates $150 and even $250 as loyalty payments, leading to a lot of conflict.” North Korean labor export companies skim off an excessive amount of money from salaries. The level of discontent recently prompted the North Korean government to dispatch security agents who trawl construction sites on weekends to provide ideological “cleansing” sessions to workers. [….]

“The North Korean companies that sent the workers abroad are aware of the bootlegging but are turning a blind eye as long as the laborers pay portions of the profits,” one local source said. [Chosun Ilbo]

The construction companies, in turn, are almost certainly under the direct control of the local North Korean embassies. This arrangement has the advantage of putting two layers between the embassies and the retailers. That gives the embassies plausible deniability, and avoids disruption to the other business operations the embassies are involved in.

The real test of the regime’s culpability, of course, is how the profits move. At the end of the day, I’d wager that nearly all of the profits end up deposited in regime-controlled accounts, co-mingled with the proceeds of legal businesses to disguise their illicit origins, and wired through multiple shell companies to other regime-controlled offshore accounts.

I confess to some ambivalence about this line of business. I can certainly think of worse things North Korean diplomats have smuggled, but you can’t pick and choose what you allow a criminal organization to sell. You have to uproot all of it or none of it. And on balance, I don’t suppose North Korea’s bootlegging is any more likely to liberalize the Middle East than a few ChocoPies are to liberalize North Korea.

Yet again, as with the recent and not-so-recent arrests of North Koreans for illegal gambling (second section), we see that North Korea has no moral objection to capitalism, as long as it’s state capitalism. It just objects to granting economic liberty to its subjects, and to freeing them from hunger and dependency.

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“N. Korean opium floods northeast China,” according to a new article …

in The Chosun Ilbo. The article shows a photograph of opium being grown in North Korea and infers that the drug production is regime-directed, but it’s also possible that, consistent with recent trends, the regime simply tolerates the production and taxes it heavily. That has the advantage of giving North Korea both the income and plausible deniability, when China and other states complain about state-sponsored drug trafficking.

~   ~   ~

Update: More on North Korea’s meth smuggling here, via (interestingly enough) Chinese scholars. Here’s the thing with meth — I used to prosecute meth cases, and cooking it makes an obnoxious, distinctive stench (like a dirty cat box) and requires hard-to-obtain precursor chemicals. In a society where even ordinary consumer goods are hard to get, how would a cooker get chemicals without help from the authorities? How, in a society with no Fourth Amendment and where neighbors are paid to watch and rat each other out, would it be possible for a meth lab to go undetected by the authorities? How would illegal drugs get onto North Korean ships when shipping companies are some of the most tightly state-controlled enterprises in North Korea — and are frequently used by the state for smuggling other illicit cargo?

Which is, I suppose, a respectful disagreement I have with the theory that North Korea’s drug business has privatized. “Tolerated and taxed,” maybe up to a point. Leaking into North Korean society, certainly. But solely the work of unaffiliated local drug cartels? Not a chance.

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Was Kim Jong Un behind the plot to smuggle meth into New York?

Last week, the U.S. Attorney for the Southern District of New York released an indictment of five men for conspiring to smuggle North Korean methamphetamine to New York. The meth was of exceptionally high quality — between 96% and 99% pure, depending on the source — and in large amounts. An initial “dry run” transaction consisted of 30 kilograms, later seized by Thai and Filipino authorities. The next shipment would have weighed in at 100 kilograms, for which the dealers offered to pay $6 million, which is enough to buy a lot of baby formula (just kidding!).

The suspects were nationals of Britain, the Philippines, and, naturally, China. According to the U.S. Attorney’s office, the five suspects were all arrested in Thailand in September, and have since been extradited to the United States. That means that at least some of them are likely to reveal more about the plot in exchange for leniency in charging or sentencing.

Separately, a former U.S. Army soldier, Joseph Hunter, has been charged with leading the international drug trafficking ring that conspired to smuggle the dope, and for conspiring to whack a DEA agent. Once the drugs arrived in New York, they were to have been retailed through a biker gang, the Outlaw Motorcycle Club. We may learn more about this in the future; according to ABC News, “The investigation is ongoing and is expected to yield additional arrests in the coming weeks.”

North Korea has already reacted to the report in its customary fashion, claiming that it’s all a smear campaign. Still, the evidence there is to support the North Korean government’s involvement isn’t clear. Either the North’s control over its own infrastructure has eroded more than we realize, or the regime has gotten good at structuring drug deals to make them plausibly deniable. In recent years, we’ve seen less evidence of state-sponsored drug trafficking by North Korea, and more evidence that North Koreans whom the state taught to cook meth years ago have turned pro. North Korea itself is now flooded with meth. The other night, a young defector told me that smoking or snorting “bingdu” has become as common a social custom in the North as a toast over dinner (which must be at least a slight exaggeration).

There are a few pieces of evidence that suggest, but do not prove, that the government of North Korea itself manufactured and exported this meth.

The first, of course, is its prior history of state-sponsored drug dealing, although, as mentioned, the evidence for this has trailed off in recent years.

The second is the volume of the drug. The sales listed in the indictment totaled 130 kilograms, and the indictment says that one of the suppliers, “Reyes,” has stockpiled a ton of meth in “Country 2,” identified here as the Philippines. It’s difficult to imagine that anyone could manufacture that volume of an illegal substance without the cooperation, at the very least, of the government. The same can be said of the drug’s purity.

For about a year, I prosecuted meth cases in what was then America’s meth capital, San Bernardino County, California. For a while, I even had my own informal network of informants. I made friends with the cops in Barstow, who told me all about how meth is made, and showed me their albums of photos of meth labs hidden behind fake walls and inside semi trailers parked in the desert. Cooking meth requires the maker to obtain large amounts of precursor chemicals, which would be especially hard to obtain in commercial amounts in North Korea. The odors associated with even small-scale meth production are overpowering and easily detectable. Cops often find meth labs just by the smell (“like a dirty cat box,” as the cops described it). Then, there’s the risk and danger of working with toxic and explosive chemicals. In other words, it would have been very difficult to manufacture large volumes of high-quality meth in North Korea without the cooperation of the government, although I can’t say it would have been impossible.

As a prosecutor, I became convinced that meth is as addictive and dangerous as cocaine. It makes the user manic, paranoid, violent, and prone to extremely dangerous behavior. Two soldiers I prosecuted for meth stole their roommates’ cars and crashed them at speeds exceeding 100 miles an hour. The physical effects of the drug, and of the other toxic chemicals it often contains, soon become visible on the faces of meth users.

The indictment, which you can download here, offers a few other clues, none of them conclusive. It repeatedly says that the meth was “from North Korea” or “North Korean,” but does not say anything about the affiliation of the original supplier or the method of delivery. (You may suspect political motives, and there may be some, but smart prosecutors never allege unnecessary facts in their indictments. The more they allege, the more they have to prove.) This is the most intriguing clue:

Screen Shot 2013-11-21 at 9.25.39 PM

 

Let’s assume, for now, that Ye Tiong Tan Lim isn’t just making this all up. If I’m reading this right, the regime destroyed its more visible production facilities and moved its operations into less visible ones, to fool our satellite imagery analysts. The statement implies that the regime was the wholesaler, but the statement doesn’t rule out the possibility that private dope dealers or rogue officials were the manufacturers.

Screen Shot 2013-11-21 at 9.33.34 PM

The language implies that North Korea was up to some sort of provocation, probably a missile or nuke test, and that this was creating unwanted attention. But why would that be a problem for a hidden meth lab? Surely U.S. satellites would not be watching meth labs in North Korea. What occurred to me later, however, was that they might be watching North Korean shipping traffic in harbors like Nampo, Hungnam, or Chongjin, which carry plenty of things that have national security interest.

Another compelling clue may be the fact that one of the co-conspirators had stockpiled a ton of the meth in the Philippines, from where it would have been sent to Thailand, and then shipped to the United States by boat. There are no direct flights between North Korea and the Philippines. One possibility is that North Korean drug gangs smuggled the meth to China, and that Chinese gangsters then shipped it to the Philippines. Without a trans-shipment point in between, the drugs would have had to go to from North Korea to the Philippines by ship. The officers and crews of North Korean ships are carefully selected for their loyalty. Note, for example, that the captain of the MiG-smuggling ship intercepted in Panama tried to kill himself when his ship was boarded. It’s unlikely that rogue smugglers in North Korea could have arranged for the use of a ship. In the Pong Su case, North Korean drug smugglers used a freighter to drop their high-quality heroin along a remote stretch of Australian coastline, where it was moved to shore in small, inflatable boats. The use of a drop ship would be consistent with North Korea’s past M.O.

After all this point-by-point speculation, the involvement of the North Korean government won’t remain a mystery to those with access to the financial forensics. The payments for the drugs would have left a trail that will end up in a bank account somewhere. Once the feds know how the money moved — which seems likely, given the extradition of the five suspects — they’ll be able to figure out whether the persons receiving payment for the drugs were connected to the regime. Such conclusions aren’t often revealed to members of the public in detail, but a careful examination of witness testimonies before Congress should give clues to what administration insiders believe.

And who knows where else that part of the investigation could lead. After all, Banco Delta Asia began as a crackdown on the laundering of counterfeit currency.

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New Focus on North Korea’s changing economy

They paint a vivid picture of an economy in a halting transition:

* For better or for worse, loan sharks who trade in currency and their connections to the regime have become an important part of the new economy.

* How businessmen make donations to regime projects to buy indulgences — letters of appreciation — from the regime, and use them as amulets against its enforcers of dependency.

* The decay of the Public Distribution System (PDS) continues to progress.  Teachers has been among the most favored recipients of state rations until recently.  Now, they moonlight as traders in the jangmadang to get by.  Who in North Korea still lives on the PDS?  From what I’ve read recently, it seems to be going the way of the pay phone, even in Pyongyang.

* There is also a fascinating report about the Ryugyong Corporation, which controls North Korea’s illicit drug business at all levels of vertical integration.  The report paints a surprisingly nuanced view of how Kim Jong Il would control these illicit activities overseas.  There was more negotiation and less outright coercion than I would have thought, and the report seems credible and well-sourced, although the estimate of “tens of thousands” of dollars a year seems implausibly low.

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North Korea’s Medicinal Methampetamine

Open News reports that North Korea has launched another crackdown on drugs:

A source in Hyaesan, Yanggand Province reported on the 11th, January that “Kim Jong-eun has ordered the army and security forces to combine and form a task force dedicated to cracking down on the abuse of drugs in North Korea in the years “first battle. The new body began its activities on the fifth of the month.”

I think they meant to say “Yaggang,” aka “Ryanggang.”

Referring to the policy as a “battle” indicates that all efforts will be mobilized in its undertaking. Such a battle against drugs in the North indicates that the situation has reached the point where the regime sees the problem as a threat to its existence. “Drug abuse is spreading amongst the youth and the establishment of this drug combatting force is Kim Jong-eun’s prescription to medicate worsening public opinion,” added the source. “It’s nothing less than a declaration of a war on drugs.”

“Up until now any drug criminality and abuse has been dealt with by the Ministry of Public Security (the equivalent of South Korea’s police force). Significantly, the Security Department (the equivalent of the South’s National Intelligence Service) will now take the lead in concert with the military. The security apparatus taking a leading role in managing the drug problem is a clear indication that the problem is now perceived as a systemic issue,” the source went on. “There are periodic crackdowns on drugs in the North but this is the first time the State Security Department has been mobilized.”

I assume most readers of this blog have heard that North Korea was once a major exporter of illicit drugs, especially methamphetamine and heroin. Recently, however, the North Korean state’s dope industry appears to have collapsed along with the rest of its industries. North Korean diplomats are still getting caught smuggling dope on occasion, but most of the available evidence suggests that North Korea’s illicit drug exports have dropped off sharply. This may be a function, in part, of Japan cutting off most trade with North Korea, which probably also cut off some lucrative smuggling routes. In any event, there were still plenty of North Koreans who had the knowledge, the connections, and the economic desperation to go into the dope business on their own. The collapse of North Korea’s medical care system (Margaret Chan’s views notwithstanding) gave them a domestic market. North Koreans who couldn’t get simple cold remedies and pain killers turned to meth and heroin instead. And so one day, South Korea will have to reunify with a broken nation whose myriad public safety and health problems may include tens of thousands of drug dealers, smugglers, addicts. Open News adds:

Drug abuse in North Korea has been on the increase. According to North Korea Ministry of Health data confirmed by an Open Radio correspondent, more than 200,000 North Koreans had used Philopon more than once as of December 2008. The numbers of those who had used opium in the treatment of some sort of illness had reached 500,000. However, taking into account those not included in the Department of Health’s figures the number of North Koreans using Philopon or opium could be higher.

I’m suspicious of the origin of those statistics, but they sound plausible. And they’re staggering for a nation of 23 million or so, especially for such a tightly controlled society.

You can read more about North Korea’s drug problem here.

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Open News on North Korea’s Drug Problem

Open News has a series of interesting reports on the rapid rise of drug use in North Korea, and a very worrisome rise in meth use in Sinuiju in particular. The government has responded with a crackdown, using specially selected Anjeonbu officers who aren’t stationed in the area long enough to “go native” and turn corrupt. North Korea’s idea of rehab is a bit severe, but there are no recidivists before firing squads.

It’s worth remembering that North Koreans learned to manufacture their favorite street drugs from their own government, which still exports them for foreign exchange, though probably not in as much quantity as ten years ago.

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At Last, China Regrets June 4th Shootings!

And obviously, I refer to the killings of three Chinese citizens and the wounding of a fourth by North Korean border guards:

Foreign ministry spokesman Qin Gang, briefing reporters in Beijing, said the shooting incident occurred in the early morning hours of June 4, around the northeastern town of Dandong, when the Chinese civilians crossed into North Korea to engage in illicit trading, common along the 880-mile border.

South Korean and Japanese media reported that the Chinese were in a boat on the Yalu River attempting to smuggle copper from Sinuiju in North Korea, when they were fired on by a North Korean ship. Qin said China was investigating the incident and “attached great importance to it.” He added that China had “immediately made solemn representations” to North Korea. [Washington Post, Keith Richburg]

North Korean Intellectuals’ Solidarity relates a slightly different narrative of the incident (11 p.m. on June 3rd) via the Wall Street Journal. One Chinese academic quoted by the Post called this “a big deal:”

“Chinese people will be shocked to hear this news,” Zhang added. “This will affect Chinese people’s views of North Korea.”

Who knows? It might even lead to the Communist Party losing seats to the Tea Party in the next mid-term election! Not even Hu Jintao’s job is secure now!

Oh, right. Almost forgot for a minute there.

Well, maybe we should all take the fact that China made a public statement about the shooting of four of its citizens — and after all, Chinese are pretty much worthless to the North Koreans as hostages — as a sign of China’s “displeasure.” (Note, by the way, that the BBC mentions Robert Park and Laura Ling, but completely forgets poor Aijalon Gomes, who is still inside North Korea, serving an 8-year sentence to hard labor) Maybe we can even overinterpret this terse statement with optimistic abandon and conclude that China, notwithstanding the fact that it ran interference for Kim Jong Il at the U.N. after he sank a South Korean warship, is this close (fingers almost touching) to capping North Korea’s imports of baby formula Maybach sedans, yachts, and gas centrifuges at 2009 levels.

dandong.jpg
[pic from here]

Or, maybe we can assume safely that everyone in Beijing will have forgotten this by next Tuesday, and that China isn’t going to do d**k about this.

So you sense that to me, the expression of Chinese displeasure doesn’t signal any real change in China’s support for Kim Jong Il’s regime. What’s more interesting to me is the cross-border smuggling side of the story, one that seems to have been ripped from the pages of my Capitalist Manifesto.

The stretch of the Yalu just south of Dandong is frequently trafficked by smugglers, some of them bringing North Korean-made drugs into China or banned Chinese products, such as DVDs or cellphones, into North Korea.

The North Korean government is especially strict about the export of copper, which has been looted from factories, electrical and telecommunications facilities by Northerners desperate for money. But the North’s border guards do not normally shoot to kill — at least not when the smugglers are Chinese.

“Only their own people,” said Kim. [L.A. Times, Barbara Demick]

Here, as is often the case, there’s ambiguity in the question of whether the smuggling implicates North Korean officials in corruption. I’d usually infer that anyone sailing a boat loaded with scrap copper across a heavily patrolled river border between two police states and a common smuggling route would at least think he had official protection, though this ended up being far from the truth in practice.

“Illegal trafficking of this kind has been going on for many years, but this is the first time the North Koreans have taken such very harsh measures against smugglers,” said Shi Yinghong, professor of international relations at Renmin University of China. “I think this shows that relations have entered a very tense period.” [Wall Street Journal, Aaron Back and Evan Ramstad]

At the same time, another story about cross-border smuggling is emerging from the same general area. This time, however, a North Korean provincial official has been popped by the ChiComs’ finest for smuggling crystal meth into China in … a kimchee jar.

South Korean activist Do Hee-yoon quoting a source in China on Monday said that a 33-year-old official surnamed Rim from the Sinuiju city government’s trade bureau was arrested by Chinese police on charges of drug trafficking in Dandong on the evening of March 2.

“North Korean agents targeting South Korea have been arrested before for their involvement in drug trafficking, but it’s unprecedented for a senior government trade official to be arrested for direct involvement,” Do said. “The Dandong Customs Office has mobilized customs officials from Dalian to probe all aspects of North Korea-China trade.” [Chosun Ilbo]

The fact that North Koreans are smuggling dope into China isn’t an entirely new development. The Chosun Ilbo thinks this confirms that North Korean officials are still involved in state-sponsored drug smuggling, and God knows there’s ample evidence to support that charge. Still, recent reports suggest that a substantial share of North Korea’s meth business has turned pro, and it’s entirely possible that this official was just plain corrupt and acting for personal profit.

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The Decline of North Korea’s Dope Industry

According to the Treasury Department, North Korea is still printing fake dollars, but no major North Korean meth and heroin shipments have been intercepted in recent years, leading it to believe that the regime is out of that business:

“There is insufficient evidence to say with certainty that state-sponsored trafficking by the Democratic People’s Republic of Korea (North Korea) has stopped entirely in 2009,” the 2010 International Narcotics Control Strategy Report released by the department said. “Nonetheless, the paucity of public reports of drug trafficking with a direct DPRK connection suggest strongly that such high-profile drug trafficking has either ceased, or has been reduced very sharply.”

The annual report said, “No confirmed instances of large-scale drug trafficking involving the DPRK state or its nationals were reported in 2009,” noting, “This is the seventh consecutive year that here were no known instances of large-scale methamphetamine or heroin trafficking to either Japan or Taiwan with direct DPRK state institution involvement.” [….]

The report noted that trafficking of methamphetamine along the North Korea-China border continues. “There are indications that international drug traffickers can purchase methamphetamine in kilogram quantities in some of the major towns on the Chinese side of the DPRK-China border,” it said. [Yonhap]

You can read the full State Department report here. Here’s what it says about Supernote counterfeiting, by the way:

“Counterfeit $100 U.S. notes called supernotes continue to turn up in various countries, including in the United States,” it said. “There are reports, for example, of supernote seizures in San Fransisco and a very large supernote seizure in Busan, South Korea, during 2008 and 2009.” Supernotes are uniquely associated with North Korea, the report said. “But it is not clear if recent seizures are notes which have been circulating for some time, or they are recently-counterfeited new notes.”

Overall, the evidence I’ve seen supports the view that North Korea’s large scale, state-sponsored meth and heroin production and export business has dropped off sharply, although it’s also possible that they’ve just gotten better at not getting caught. This doesn’t mean, of course, that Kim Jong Il has decided to just say no to drugs. North Korean diplomats are still being busted for selling other drugs on a fairly regular basis, though I’m not aware of any major drug busts last year.

Most likely, North Korea’s large-scale dope manufacturing is rusting just like pretty much ever major industry in North Korea. North Korea, which has tried to overcome the law of comparative advantage with silly ideas like ostrich and rabbit farms, is thought to have brought in experts from the Golden Triangle to teach it how to grow poppies. Former prisoners have identified this field in Camp 15, a political prison camp, as one place where opium poppies are grown:

camp-15-opium-field.jpg

North Korea’s short growing season may have done as much to doom this initiative as anything, including high-profile drug interceptions and the general decline of North Korean industry.

Where North Korea manufactures (or manufactured) illicit (to us) drugs is no longer a very well kept secret. At least some of the facilities used to manufacture the drugs were originally built by the Japanese during the occupation period. Here’s the Nanam Pharmaceutical Factory …

nanam-pharma.jpg

and the Hamheung Pharmaceutical Factory:

hungnam-pharma.jpg

A big thank you to Curtis for those last two locations. For much, much more on North Korea’s dope industry, I refer you to this detailed paper by Lieutenant Commander Cindy Hurst.

This doesn’t mean that North Korea isn’t still producing plenty of meth and heroin, although most of the industry seems to have turned pro. As I’ve described here in more detail, the collapse of North Korea’s economy left a number of scientists and chemists with all the knowledge needed to set up their own meth labs and with no other means to survive. Despite North Korea’s poverty, there’s a demand for drugs to stave off hunger and dreariness, and as a substitute for medically appropriate medicines that aren’t widely available. As a result, the city of Hamhung in particular has a severe problem with methamphetamine addiction. The latest from Open News is that students are turning to selling dope (and in some cases, their diplomas) to survive:

North Korean university students have the burden of paying for living expenses and other financial sacrifices requested by the university. In the case of university students in downtown Haesan last year, it has been estimated that the average amount money spent a year is about 18,000-20,000 yuan, which is equivalent to 900,000-1,000,000 won in North Korean currency before the currency reform. Moreover, the students who are in the final semester need to pay a bribe for graduation. The graduation payment is about 6,000-8,000 yuan (about 300,000-400,000 won before currency reform). The source has stated that the reason why the students need to pay bribes even though the North Korean society provides a free education is because bribing is prevalent within the schools. This is why that the North Korean university students have no choice but to be involved in criminal acts such as drug trafficking and selling their diploma.

The source further explained about students who are selling their diploma which they have gained with a great amount of effort. According to him, the trend of selling diploma has become popular among the students who have finished their military service, have left their family in suburban areas, or have a low living standards. The portion of such students is approximately 1-2 per class. Also, it is possible for them to change their pictures and names before putting them on the transaction market by contacting the managerial staffs at school. The universities are indeed supporting the diploma selling by condoning it.

Such diplomas are being sold to the people who are rich and want to gain social success. It is because graduating from university is one of the factors that can contribute to gaining success in the society. Also, the price of the diploma, in the case of a diploma from the School of Education, is worth about 300,000 won (before the currency reform).

The source estimated that it was around the mid-1990s when North Korean students have faced such a difficult situations. Although such situations have declined during the late 1990s, it has restarted since the early 2000 before the recent currency reform. Also, it has dramatically increased ever since the currency reform. Furthermore, the source has added that this trend that is not only confined to Heasan, Yangkang Province but is prevalent in other parts of North Korea. [Open News, Mi-Ok Kim]

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North Korea Has a Meth Problem, Part 3

North Korea’s meth problem continues to worsen as meth gains cultural acceptance.

According to interviews with residents of Heoryong and Musan, in North Hamkyung Province on February 5, North Koreans near the border area and Shin-ui-ju, Hamheung, and Pyongyang consume Crystal Meth like food.

Especially near the border area, Meth is used by people of all ages, and even students aged 14-15 consume it. In these regions, Meth is served for guests, and the host invite guests to consume Meth by saying “Well, let’s drink!” Adults do not hesitate to invite children to consume Meth, which is resulting in addiction and drug related crime. Children often steal in order to afford their consumption.

Even field-grade officers in the border guards are involved in smuggling and selling drugs:

On January 30, a source in North Hamkyung Province reported that the delivery of drugs between Onsung, North Hamkyung Province into China is done by the border guards on the level of lieutenant and lieutenant kernels.

These border guards deliver drugs produced in North Korea across the Tumen River whenever they are patrolling the river. After a basic check-up on the quality of drugs, the buyers come across to North Korea and pay them. Since crossing the river is frequent in the duties of the border guards, Chinese government does not consider this to be suspicious.

The amount of drug being delivered is between 1kg to 5-6 kg. The price is $17,000-18,000 for 1 kg, and the border guards take $2-3,000.
The involvement of the soldiers is not limited to the delivery. They sometimes sell the drugs themselves. They at times take the drugs that they confiscated and sell them to those they already know in China. This is sold at a below-average price, which makes it popular.

soldier-smuggling.jpgThe Daily NK has also published photographs of North Korean soldiers smuggling.

I’ve previously written about North Korea’s meth problem here and here, and I suspect this is one of the main “sleeper” challenges to post-Kim reconstruction. I’ve also followed reports of corruption and low morale in the border guard force. According to a rash of such reports in 2007, the government sentenced two to death for taking bribes. In response, 20 more dropped their guns, deserted, and crossed the border into China. Of these, two were later interviewed on Japanese television. Ten of the guards were reportedly recaptured.

On the whole, the meth problem is a tremendously destructive development for North Korean society. It’s going to be difficult to rebuild a tiger economy on the ashes of what Kim Jong Il has gutted with a bunch of tweaks — think Yemen, where everyone is stoned on kat all day, or if you prefer, Barstow, California. But the silver lining is that if the border guards are corrupt enough to smuggle drugs, they can be paid to smuggle food, medicine, and eventually, weapons.

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How Corrupt Is North Korea These Days?

Very, if this report from Good Friends is true:

On November 28th, Hamheung City, South Hamgyong Province publicized the latest results of the drug crackdown. The City launched the campaign since last September. Party officials, including four officials belonging to the Provincial Party, three officials from the city party, two police officers from the Sungchun region, two prosecutors from the Province, and one party official from the Sapo region, who have accepted bribes from drug smugglers were the main targets of the recent crackdown. The police authorities condemned the perpetrators and made their names and ranks public before relieving them of their posts and indicting them.

In addition to these officials, civilians were also arrested for having committed drug-related crimes. On December 13th, the city police presided over an open trial at the Chupyung market one hour before the marketplace opened for business with the police chief announcing the charges in each indictment and making open statements that the Party would sweep out crime.

People grumbled about the unfairness of only subjecting civilians to the humiliation with an open trial. The officials who have been charged for the same crimes did not have to stand an open trial as did the civilians at the Chupyung market.

A few years ago, if you’d said that regime officials could be bribed to look the other way at something as serious as drug trafficking, I wouldn’t have believed you. If this can happen today, I wonder how long it would take before officials can be paid off to look the other way at receiving foreign broadcasts, selling radios, or being a relative of a defector:

It was common for people to bribe police officers who were in charge of resident registry records to prevent any disadvantage that might occur during family background check prior to being appointed as an official. If they had any family members who fled the country, they often bribe officials and change the missing person status to death.

I wonder how long before it becomes possible to buy weapons from the police or from military quartermasters.

There are a lot of interesting items in that report, although the obvious cautions about hearsay and verification apply.

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More North Korean Diplomats Busted for Smuggling

Not a day goes by that I don’t rue all of the commerce we’re missing out on by not having diplomatic relations with North Korea:

Swedish police have arrested two North Korean diplomats on suspicion of smuggling 230,000 cigarettes into the Nordic country, the Swedish Customs Office said Friday. The pair, a man and a woman who have diplomatic status in Russia, were stopped by Swedish customs officers Wednesday morning as they drove off a ferry from Helsinki, the Finnish capital. Customs officials discovered Russian cigarettes in the car driven by the couple, Swedish Customs spokeswoman Monica Magnusson told Reuters. [Reuters]

They always travel in pairs, you know. Lucky for them, they had an almost completely flawless back-up plan:

The two North Koreans claimed diplomatic immunity.

“They were accredited as diplomats in Russia, but had no accreditation in Sweden,” she said. “They were arrested on suspicion of smuggling.”

Magnusson added that the pair were still being held by Swedish police and that she was not aware of them having any contact with North Korean officials since their arrest. Sweden’s Foreign Ministry said it had been informed of the arrests but would not comment directly on the matter, saying it was a criminal case and was being handled by the police.

Foreign Ministry spokeswoman Cecilia Julin said foreign diplomats are only immune from criminal prosecution in countries where they have been accredited with the authorities. “If you come to Sweden and commit a crime, you’re just like any other foreign national,” she said.

What? You mean someone is proposing to apply the same standards to North Korea that they apply to other countries? Such brigandish hooliganism cannot stand!

Sweden is one of only seven countries to have an embassy in North Korea, treated by much of the world as a rogue state due to human rights abuses and its possession of nuclear weapons despite opposition by the international community.

North Korea is believed to derive a substantial amount of its foreign exchange from tobacco smuggling, although estimates of the amounts vary widely. Cigarettes are one of the milder commodities in which North Korean diplomats routinely traffic. They’ve also been caught smuggling dope, cash, gold, and just about every foul substance you can imagine:

Authorities in numerous countries have stopped North Korean diplomats from smuggling vehicles, alcohol, fake antiques, electronic goods, weapons, and more. Other reports deeply implicate officials in the endangered-species trade. Since 1996, at least six North Korean diplomats have been forced to leave Africa after attempts to smuggle elephant tusks and rhinoceros horns. Such efforts seem partly driven by the dismal funding of North Korea’s embassies. Lacking cash, North Korea closed at least 14 embassies last year and reportedly told those remaining to become “self-sufficient.” Still other diplomatic smuggling incidents involve cigarettes, allegedly sold tax free on the black market, and pirated CDs. Two diplomats crossing into Romania from Bulgaria last year were found to have crammed 12,000 bootleg CDs in the trunk of their car. [U.S. News, Feb. 7, 1999]

This 2007 Congressional Research Service report states that at that time, there had been 50 documented incidents in which North Korean diplomats were caught smuggling illegal drugs in 20 different countries. Etcetera, etcetera, etcetera.

It’s enough to make you wonder what else they’ve carried without getting caught.

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North Korea’s Meth Problem Is Now China’s Meth Problem

Previously, I’ve written about North Korea’s growing drug problem. The Chosun Ilbo’s “On the Border” even showed video of a North Korean in delicto flagrante while smuggling dope across the Yalu River in his mouth. In keeping with the ancient economic rule that supply chases demand, North Korean meth cooks have found that Chinese customers can pay more than most North Koreans:

Chinese police is [sic] having a hard time with philopon trade in the border area near Tumen River.

According to a source from Chinese police on October 5, Chinese police confiscate 2-3 kg of philopon a day. Smuggling of philopon has increased since the beginning of September when the rainy season ended.

The source stated that philopon seems to be traded by regular residents of North Korea. These dealers secretly smuggle philopon out to China in close communication with Chinese smugglers and it is difficult to arrest them. This has been a headache for the Chinese police. [Open News]

I don’t really see an up side to meth addiction, though I’m mindful that North Korea won’t change until its society breaks down further. Similarly, I’m untroubled by China’s exploitation of North Korea becoming just a bit less one-sided.

What really intrigues me is this question: how can two countries that can’t stop the flow of drugs across their shared border expect to stop the flow of weapons in the opposite direction?

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Open Radio Comes Into Its Own

Open Radio for North Korea is getting plenty of publicity recently, and it’s also cranking out plenty of interesting reporting about (and often from) North Korea. First, I’ll link to a CNN interview with Open Radio’s founder, Young Howard, a/k/a Ha Tae-Keung a story on Open Radio at the L.A. Times.

By far the most popular program for Howard’s station is “Unsent Letters,” which broadcasts messages from outsiders seeking to get word to friends and family in North Korea.

It’s an electronic bulletin board of sorts. Often the missives are sentimental reminiscences, bits and pieces of memory, raw emotion.

One recent installment told of two South Korean fishermen who family members say were kidnapped by the North Koreans in the 1970s, never to be heard from again. The announcer asked for details of the men, then played a popular song called “Memory of a Drink” in remembrance.

Another message came from a woman looking for word of her father, who she says was kidnapped 37 years ago. She says she grew up thinking he died in a shipping accident. But in 2005 she got word that he was alive in North Korea.

She says she hopes to meet him one day.

“If it is true that he is alive, he would be in old age,” she says. “Poor Daddy! Seventy-two years old!” [L.A. Times]

Open Radio also e-mailed several interesting dispatches:

* This one talks about Kim Jong Il succession rumors in the North Korean military.

* A report on North Korea’s exploding meth problem, how the underground drug market works, and the proliferation of home meth labs in North Korea.

* A report on the rumored restoration of long-distance phone service in North Korea, but with improved surveillance capabilities.

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Coal to Newcastle, Meth to Wonsan

North Korea, which is now said to be awash in some of the illicit drugs it manufactures for export, chiefly to Japan, has released a Japanese man it accused of drug trafficking.

A Japanese man held in North Korea since 2003 on suspicion of smuggling drugs left the country on Tuesday, North Korea’s official media reported. The man, identified as Yoshiaki Sawada, has been allowed to leave ”thanks to a humanitarian measure taken by an institution concerned” in North Korea, the Korean Central News Agency said. [Kyodo]

No doubt, there’s more to this story than the official North Korean version.

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