North Korea’s Ministry of State Security (MSS) is reportedly in the midst of a massive campaign against illegal money transfer brokers operating in the Sino-North Korean border region.

“The MSS did a sweep for brokers in the border areas of Huchang County [also known as Kimhyongjik County], Sinpa County [Kimjongsuk County], Hyesan, and Pochon County. Then, they submitted a proposal to the Central Committee,” a source in Yanggang Province told Daily NK on Tuesday. “On May 8, the Central Committee [after approving the proposal] ordered the round up of anyone performing illegal money transfers. The only people exempt from the order are those who registered at official national trade organizations and are paying commissions to the state. As a result of the order, the border region is in chaos.” 

In short, after the MSS arrested around 20 money transfer brokers in the border region, the agency submitted the proposal to the Central Committee asking for permission to “completely wipe out” people who perform illegal money transfers through China, based on the source’s account. 

The MSS reportedly believes that illegal border crossers in China send only small amounts of money into North Korea, with the exception of human traffickers. However, the agency reportedly thinks that larger transfers of over RMB 10,000 (approximately USD 1,500) are usually from North Korean defectors residing in South Korea. This led the agency to ask permission from the leadership for a wider clamp down on the money transfer trade. 

Money transfer brokers typically receive a 30% commission from the transfers they facilitate, so money exchanges involving ever larger amounts of money result in higher profits. For this reason, many brokers prefer to work with North Korean defectors who can give them a higher payout. The MSS reportedly believes that these transfers have a “negative effect” on society because the transfers allow the families of defectors in North Korea to live comfortably. 

Moreover, the MSS reportedly argued in its proposal to the Central Committee that because brokers who deliver money transfers from China violate North Korea’s disease control policies and bring money “tainted with COVID-19” into the country, money transfer operations need to be “razed to the ground.”

Following the Central Committee’s approval of the proposal, the MSS reportedly plans to conduct a total of six “mopping-up operations” against money transfer brokers across the entire Sino-North Korean border region.

hyesan leaker bribe elderly smuggling gold yanggang projects phones border
A view of Hyesan, Yanggang Province, in August 2018. / Image: Daily NK

“It looks like hundreds of money transfer brokers will be arrested in North Pyongan Province, Chagang Province, Yanggang Province, and North Hamgyong Province,” the source said. “Once the MSS arrests them, the brokers will be sentenced to ten to fifteen years of re-education through labor and expel their families to hard-to-live areas far away from the border. [The MSS] will confiscate their homes and give this property to discharged soldiers, disabled veterans, and other people of merit.”

In the past, most money brokers received sentences of between three and five years of re-education, and North Korea’s system of “collective punishment” did not apply to their families. Some money brokers continued to have relatively good lives even after serving their sentences. 

Now, the MSS has tripled the sentences of re-education through labor to between ten and fifteen years and plans to confiscate brokers’ homes and exile their entire families. The source explained that this appears to be an attempt by the agency to exterminate “anti-party, anti-state actors” and their families.

In addition, the MSS reportedly announced that it will dissolve any firms belonging to trade organizations found to have involvement with illegal money transfer brokers and revoke their trade certificates (waku). Trade guidance officials also risk facing expulsion to hard-to-survive areas. 

The source said that money transfer brokers have brought money into North Korea through trade organizations and trade guidance officials for many years. However, now that the MSS has made public their intent to punish illegal activity more stringently, it will likely be more difficult for brokers to ask trade organizations and trade guidance officials for help with money transfers in the future.

“The MSS wants to root out illegal activities near the border by instilling terror in people,” the source said. “They want people to be afraid that if they conduct illegal money transfers, not only themselves but their whole family will be annihilated…To heighten their own achievements, the MSS is acting alone in their cleanup operation [of illegal money transfer brokers] and is not working with the Ministry of Social Security or the Central Public Prosecutor’s Office.”

Meanwhile, around 20 people arrested for brokering money transfers are reportedly under investigation at the Yanggang Province MSS office’s preliminary examination detention center. It appears that the MSS arrested the brokers as a part of their mopping-up campaign with the intention of making an “example” out of them. It appears likely that the agency will give them re-education through labor sentences of over ten years, confiscate their homes, and exile their families.

“People who cooperated with [the brokers], like political guidance officers, security officials, and other command-level officials affiliated with the border guard, were dismissed and given dishonorable discharges, although they were not expelled from the Party,” the source said. “The lower-ranking soldiers that they led now face higher barriers to obtaining Party membership and were demoted.”

*Translated by S & J

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Ha Yoon Ah is one of Daily NK's full-time journalists. Please direct any questions about her articles to