Hwagyo Targeted in Remittance Crackdown

The North Korean authorities have recently intensified efforts to stem the
flow of remittances entering the country from South Korea. Once restricted to
surveillance and monitoring of defector families and brokers, who aid in
transferring cash from the South up North, this investigation has now extended
to the hwagyo [community of overseas Chinese] residing in North Korea.

A source in North Hamgyung Province reported to Daily NK on
September 15th, “News comes regularly about hwagyo under interrogation from
State Security Department [SSD] agents,” going on, “This is because they were
suspected of being involved in transferring money from defectors living in
South Korea to their families in the North.”

The ongoing practice of sending money back to families
defectors have left behind in the North has seen sums continue to rise over the
past few years, when the practice took hold. This additional source of income
has played a substantial role in helping family members in the North to get by,
and in many cases, contributing to seed money to start a business.

Growing economic disparity levels among households and
ensuing social unrest from this flow of cash prompted the North Korean
authorities to take extreme measures: cutting off its source by increasing
surveillance of families with defector members, or in some cases going so far as to expel the accused to remote areas of the nation.

However, expanding the circle of monitoring to the hwagyo is
considered unprecedented, and reflects the determination of the authorities to
stamp out any efforts by those who it believes to be acting as middlemen in the
stream of money flowing north. Hwagyo are treated as citizens in North
Korea, carrying the same identification cards as all other residents; however,
they are also able to hold Chinese passports, which allows for greater mobility
and autonomy than other North Koreans, a fact likely to have sparked SSD
suspicions of their potential involvement in the operation.

Not only that, as the range of families who are able to receive
funds from defectors expands further inland, instead of contained only to border
areas, the authorities have widened the scope of monitoring to include its own–SSD
officials and security forces.

“The intensified crackdown on money sent from the South began
last year,” the source explained. “Initially, it was mostly the families of
defectors they monitored and penalized, but now they have made it more
inclusive, punishing those who aid in transferring the cash.”

She noted that some of the hwagyo who have been interrogated by the SSD
have openly complained, “All I did was run an errand,” and,
“What’s wrong with the money coming in? What difference does it make if someone
passes it on? At the end of the day, it benefits North Koreans not us.”

Some SSD officials are trying to
get members of the
hwagyo to talk with intense lines of questioning, “Have you
have received illicit money? Have you made contact with South Koreans while
doing so, and if so, what did you discuss?” she cited as among the probes they have undergone. Other agents take a more passive, 
manipulative approach, warning them to “go about it with caution, if
someone wants to send money through.”

As this operation unfolds, some residents in the North have
remarked, “There’s likely no SSD official who has not received a share of
remittances from the South,” noting that SSD members, not residents, should be
the first targeted and interrogated.

It is common practice for SSD guards working in the border
area to receive portions of the money smuggled in from South Korea as bribes in
return for turning a blind eye to the operations. This is because, despite the
potential to receive larger and regular rations from the food distribution
system, this combined with their paltry salaries is still not enough for most
personnel to cover expenses for basic daily necessities.

Some speculate that the clampdown on the hwagyo could be a
tactic employed by SSD officials in the border region who have lost their
channel of bribes once provided through smuggling and border defections. Others surmise that they are trying to shake down hwagyo, who have a more stable
financial footing in the country, in order to receive more bribes.

Many readily accept the reality of the situation, the source said, citing a third party, “They may have no choice but to carry out this
monitoring because it’s an order down from the central state power organs,”
pointing out, “It’s the law here to do as you’re told, and that’s the fate they
[SSD agents] face.”