Crackdown on Exporters ahead of Redenomination Revealed

Shenyang, China — It has belatedly come to light that the North Korean authorities carried out sudden inspections at customs houses, state enterprises and foreign currency earning organizations ahead of the currency redenomination at the end of last month.

Inspections seem to be aimed at cutting off the link between the state-run trading apparatus and private wholesale merchants in advance of confiscating those merchants’ property via the redenomination.

A source from North Hamkyung Province reported to the Daily NK on the 6th, “On November 27, there were surprise inspections at the Trade Management Department and foreign currency earning enterprises, including the No. 5 Office which is in charge of earning foreign currency in Chongjin and Rajin-Sunbong. Chongjing Defense Security Command (DSC) of the People’s Army, a platoon of the No. 9 Corps of the National Security Agency and the Provincial Prosecutors’ Office were jointly in charge of those inspections.”

A Yangkang Province source also reported, “The inspections covered all customs houses and trade apparatus belonging to military bases without exception. Since seven or eight groups of inspectors raided them, they had no time to move secretly-accumulated goods and money to other locations.”

The prime targets of the inspections were the organization’s trading accounts and products in storage.

On the morning of the 27th November, three days prior to the redenomination, Chongjin DSC instructed No. 9 Corps of the National Security Agency and Provincial Prosecutor Office to provide 20 agents each.

The DSC divided them into ten groups and, after giving simple instructions as to the targets and purposes of the inspections, they were deployed to the targets by truck, with ten or more soldiers for each group. However, until that point, neither the agents nor soldiers knew of their destination.

The inspection groups entered the targets unannounced and impounded their documents. In the cases of foreign currency earning enterprises, they forced open storage areas and confiscated everything.

Sources reported that inspection groups were there less than three hours, but their losses were tremendous.

A source said, “They took all the products to the headquarters of the No. 9 Corps. I don’t know what the authorities did with them.”

He explained part of the reason for the raids, “Foreign currency earning organizations have made connections with rich persons, and these individuals have them under their thumbs. The authorities don’t like the fact that private individuals hold the whip hand even over state foreign currency earning organizations.”

According to the sources’ explanation, the connection between wealthy merchants and state trading apparatus cadres has grown intimate, because the cadres in charge of foreign currency earning projects have taken to exporting these merchants’ products (raw materials, agricultural goods etc.) and sharing the profits with them. Therefore, the authorities aimed to take control over the trading apparatus first, before expropriating the fiscal power from the market through redenomination.