A view of the Sino-Korean Friendship Bridge. (Daily NK)

North Korean authorities have recently issued an order to trading companies in North Hamgyong Province telling them to pay their mandatory foreign currency contributions by an August deadline.

A source in North Hamgyong Province told Daily NK on Monday that the provincial government gathered officials from the provincial trade management bureau and heads of trading companies at the meeting room of the provincial people’s committee earlier this month. At the meeting, the province conveyed a government order regarding mandatory foreign currency contributions trading companies must begin paying from May.

According to the source, provincial authorities told those assembled at the meeting that the province “had been going easy” on trading companies regarding the mandatory payments given that trade has been restricted due to COVID-19, and that the companies must “voluntarily” pay all that they owe by this coming August.

In short, the North Korean government is telling companies to unconditionally pay the foreign currency they owe, exempting only those companies that had their business licenses pulled during the recent process of dissolving and merging companies with poor performance.

Those assembled at the meeting were told that the government has set easier standards for companies that have engaged in no trade since the closure of the border, demanding they pay just 80% of the mandatory amount. Meanwhile, companies that have engaged in state-sanctioned trade for over five months since the border closure have been ordered to pay 100%.

Moreover, the meeting participants were told that companies with joint ventures with China could extend the August deadline if they send documents to the Ministry of External Economic Relations and other relevant bodies demonstrating concrete plans to receive external investment. They were also told that the failure to pay the contributions by the extended deadline would result in late fees.

The source said the government order explained other matters pertaining to the mandatory foreign currency payments while also warning that companies that fail to pay will face “criminal punishments.”

“Trade officials appear frightened by the government’s order,” the source continued. “They say trade has not really started, let alone begun to thrive, so they will have a hard time paying their dues no matter how hard they try.”

Despite these concerns, North Korean authorities are focusing on threatening companies that fail to carry out the order with disbandment and criminal punishments, pressuring them to accelerate efforts to make the payments using all means and methods available, the source added. 

Translated by David Black. Edited by Robert Lauler. 

Please direct any comments or questions about this article to dailynkenglish@uni-media.net.

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Jong So Yong is one of Daily NK's freelance reporters. Questions about her articles can be directed to dailynkenglish@uni-media.net.