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2008/06/05 10:10 KST
NORTH KOREA NEWSLETTER NO. 6 (June 5, 2008)

   *** FOREIGN TIPS

Panel Finds No Evidence of UNDP-N.K. Fund Abuse

WASHINGTON (Yonhap) -- An independent external panel concluded on June 2 that there is no evidence supporting U.S.-led allegations of mismanagement and diversion of a U.N. relief agency's activity funds in North Korea.

   The panel conceded that the U.N. Development Program (UNDP) office in Pyongyang did not respond expeditiously and effectively to concerns of counterfeit U.S. dollars circulating in North Korea, but said there was no evidence that anyone acted in bad faith.

   The panel, led by former Hungarian Prime Minister Miklos Nemeth, issued its findings after reviewing UNDP-North Korea financial transactions from 1999-2007, spurred by charges from the U.S. in June 2006 that the U.N. agency violated regulations by doling out hard currency to the North.

   The money, in turn, could have financed the Pyongyang regime's efforts to develop weapons of mass destruction, according to the charges.

   The U.S. also charged that North Korea used UNDP-related funds to transfer money out of the country.

   The panel exonerated the UNDP by saying that verification of fund use "was satisfactory for the majority of categories of expenditure in the review sample."

   "Additionally, a detailed 'walk-through' of a sample of projects supports the panel's finding that there is no evidence to substantiate the allegations that projects' resources were consistently mismanaged or diverted for other purposes, or generally unaccounted for."
The panel also rejected allegations that the UNDP did not conduct proper field visits.

   On claims that UNDP accounts were abused for the transfer of North Korea's money, the panel said the agency had no means by which to control how the North commingled other funds for its own purposes.

  
   The panel was less certain about $3,500 in counterfeit bills, given as disbursement from the North and held by the UNDP's Pyongyang office for nearly 11 years.

   There are ambiguities in the chain of custody, the panel said. "At a minimum, warning signs existed that required a more timely and effective response."

   But it added, "There is no evidence that anyone acted in bad faith or in a fraudulent or deceptive manner."
"The panel notes that prior to 2002, the UNDP was using U.S. dollars as the foreign currency for its (North Korea) operations. The evidence indicates that circulation of counterfeit U.S. dollars was widely prevalent in (North Korea)."

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U.S. Department of State Denies Rumor of Kim Jong-il's Death

WASHINGTON (Yonhap) -- At a daily press briefing on June 2, the U.S. Department of State officially disclaimed as groundless a recent rumor regarding the death of North Korean leader Kim Jong-il, which has been circulating in China and South Korea.

   When asked whether he could confirm reports about the death of the North Korean leader, State Department spokesman Sean McCormack said that there was "no information that would substantiate that."
Rumors of the North Korean leader's death began spreading rapidly on April 26, prompting every South Korean news agency to seek confirmation of the rumors.

   However, with dismissals from South Korea's National Intelligence Service, the South's presidential office, the Ministry of National Defense, the Ministry of Foreign Affairs and Trade, the Ministry of Unification and other national security institutions, the rumors began to die down.

   Meanwhile, North Korean media have reported since May that the North Korean leader has made his inspection trips more active than ever before.

   In particular, on May 26, when the rumors began spreading, the North's state-run Korean Central News Agency reported that Kim Jong-il had visited the (North) Korean People's Army (KPA) Unit 1727 and a sub-unit of KPA Unit 836.

  
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North Korea Sends Construction Workers to Poland: Report

SEOUL (Yonhap) -- Cash-strapped North Korea has dispatched dozens of construction workers to Poland to earn much-needed foreign currency, a U.S.-based radio station said on June 3.

   Approximately 42 North Koreans are working in the Eastern European country, some of whom are experienced construction workers, Radio Free Asia reported, citing Gazeta Wyvorcza, a Polish daily.

   The construction workers were sent to sites in several local cities in northwest Poland, where construction works are briskly underway, the radio quoted the daily as saying.

   Including those whose location is not known, the total number of North Koreans working in Poland could be more than 42, the daily was quoted by the radio as saying.

   The daily did not mention under what conditions the North Koreans are working, but said that they live under strict control by a North Korean supervisor who speaks fluent Polish, according to the U.S. radio station.

  (END)