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(Yonhap Feature) Defectors' remittance to N. Korea in spotlight amid sanctions

2016/03/29 09:00

By Kim Soo-yeon

SEOUL, March 29 (Yonhap) -- North Korean defector Park Kyung-jin (alias) does not hesitate to contact couriers once a year to send a "present" secretly to her family members living across the tense inter-Korean border.

It is not a parcel of goods but money that Park has been sending to her siblings and only son in North Korea, with which South Korea remains technically at war.

Since defecting to the South in 2004, she has sent back about 3 million won (US$2,560) to her loved ones in the North each on four occasions, relying on the most surreptitious way to send money: using brokers in China and North Korea.

"I am hoping that the money can help support my family in North Korea who is struggling to survive," the 52-year-old Park said. "The money goes to my family. It has nothing to do with the North's missile and nuclear programs."

   Park is among North Korean defectors who are seeking to assimilate into South Korea, but also trying not to lose their thread of connection with family members left behind in the North. There are more than 28,000 North Korean defectors in South Korea.

North Korean defectors' move to transfer money is nothing new, but the practice has recently gained what they call unwanted attention as the United Nations Security Council (UNSC) has slapped sanctions on the North for its latest nuclear test and long-range rocket launch.

The UNSC imposed stronger sanctions on Pyongyang in early March to cut off sources of hard currency to prevent dollars from being funneled into the North's nuclear and missile programs.

A Chinese vendor shows souvenir North Korean bills near a bridge over the Amrok River in the Chinese border city of Dandong in this photo taken on March 3, 2016, following the United Nations Security Council's adoption of a fresh resolution punishing North Korea for its nuclear test. Officials at Chinese banks in border areas said they were ordered to suspend transactions with North Korean banks. (Yonhap) A Chinese vendor shows souvenir North Korean bills near a bridge over the Amrok River in the Chinese border city of Dandong in this photo taken on March 3, 2016, following the United Nations Security Council's adoption of a fresh resolution punishing North Korea for its nuclear test. Officials at Chinese banks in border areas said they were ordered to suspend transactions with North Korean banks. (Yonhap)

But North Korean defectors rejected speculation that their money can bankroll the North's weapons programs, saying that it will be only used to support their North Korean kin.

Without government permission, South Koreans are not allowed to send products or money directly to North Koreans. The 1950-53 Korean War ended in a truce, not a peace treaty, leaving the two Koreas technically in a state of war.

That's why defectors choose middlemen who freely move in and out of North Korean areas bordering China.

After receiving won-denominated money from defectors, brokers in China and the North take some 30 percent in commission and secretly deliver the rest of the money to their client's family in North Korea. The money is converted into the Chinese currency, which is easily circulated in the North's markets.

The transaction appears to be a loophole as it is hard to crack down on such an indirect way to send money to North Korea.

"It is not easy to say which law can be applied. But if such money remittance involves an intent to earn foreign exchange profits, it is against the FX transaction law," said an official at Seoul's justice ministry.

In 2015, more than six out of 10 defectors transfered money to their family members in the North, according to a poll.

A total of 256 defectors said they sent money to the North last year, accounting for 64 percent of those surveyed, according to the poll by Database Center for North Korean Human Rights and NK Social Research.

The tally has been on a steady rise since 2012 when it came to 47.4 percent. Such defectors remitted around 240 million won in total to the North last year alone, it said.

Since 2006, North Korean defector Choi Soon-young (alias), in her 50s, has worked as a self-proclaimed "helper" for other resettlers.

"By using smartphones, defectors can talk with their family members in the North once a broker brings them to border areas with China where Chinese mobile networks are accessible," she said.

Silence lies over areas near the Tumen River, which flows between the Chinese border city of Tumen and North Korea's Namyang, in this photo taken on March 4, 2016. (Yonhap) Silence lies over areas near the Tumen River, which flows between the Chinese border city of Tumen and North Korea's Namyang, in this photo taken on March 4, 2016. (Yonhap)

There are neither brisk banking transactions between North Korea and China nor are North Koreans allowed to make overseas calls using cell phones.

But at North Korean border towns such as Hoeryong and Hyesan, Chinese mobile phones are working, enabling North Koreans to make international calls with their relatives in the South.

The money being sent to the North is usually used for buying products in marketplaces, according to defectors. North Koreans also use it as seed money to secure goods for sales at such markets.

They said that 100 yuan is currently being exchanged at around 145,000 North Korean won, which amounts to 18,000 won in South Korea.

The value of the South Korean currency is approximately eight times more than that of the North's unit when consumer inflation is not taken into account.

South Korea's spy agency said last year that around 380 markets existed across the North that help instill market capitalism among ordinary North Koreans.

"The money sent from the South is playing a role of money supply as it circulates at marketplaces there," said Cho Bong-hyun, a senior analyst at IBK Economic Research Institute.

But North Korean recipients are facing the risk of being punished if they are caught contacting outsiders.

"If my family members in the North are discovered to have made contact with me, they would be in trouble," said Han Young-bok, a 52-year-old defector.

A recent report by Amnesty International showed that ordinary North Koreans are at risk of being sent to political prison camps or other detention facilities if they are caught using mobile phones to contact their family members who have fled abroad.

Lee Seong-ho (alias), a 36-year-old defector, said that as North Korean leader Kim Jong-un has ordered tighter border control, the money needed to flee the communist country has skyrocketed to over 10 million won in recent years.

"It would be better for North Koreans to receive money from South Korea, rather than to seek to escape the North," Lee said.

North Korean defectors said their attempts to transfer money should not be hindered, but they voiced mixed views about South Korea's latest unilateral sanctions against the North.

Japan has unveiled its fresh punitive actions against North Korea including a tight grip on money transfer to the North.

China has also ordered its commercial banks in border areas with the North to suspend transactions, including remittance, with North Korean banks.

In February, South Korea shut down a joint industrial complex in the North's border city of Kaesong, putting an end to the last symbol of inter-Korean reconciliation.

In early March, Seoul also unveiled a set of its own unilateral sanctions, but the restriction of remittance is not included as South Koreans are already not permitted to directly transfer money to the North.

"The Kaesong Industrial Complex should have been closed much earlier," Park, the defector, said. "I think the dollars which were generated from the zone must have fueled the North's nuclear and missile programs."

   On the other hand, Han said that the now-shuttered factory zone and a suspended joint tour program at Mount Kumgang in the North should be resumed as early as possible.

"The more North Koreans are exposed to capitalism and the market economy, the faster changes can take place in the North," he said. "Inter-Korean reconciliation projects should be restored in that sense."

   sooyeon@yna.co.kr

(END)

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