North Korea is intensifying crackdowns on person-to-person foreign currency transactions under its foreign exchange control law, with police in Sinuiju, North Pyongan province, recently arresting wholesalers for conducting deals in foreign currency.
“Police are again intensifying crackdowns on foreign currency transactions based on the foreign exchange control law,” a Daily NK source in North Pyongan province said recently. “If they have evidence that you conducted a foreign currency transaction, the police seize your money and all your wares.”
According to the source, on Jan. 20, police arrested several wholesalers in Sinuiju who had been taking payments in foreign exchange for sending goods to provincial regions.
With professional moneychangers laying low and suspending business due to intensified crackdowns over the last couple of years, many merchants now conduct transactions entirely in foreign currency without changing money. In response, North Korean authorities have now put merchants who directly engage in foreign currency transactions firmly within their sights.
Police use undercover spies to entrap merchants
“Police spies have recently approached wholesalers disguised as ordinary people or merchants, offering to buy goods with foreign currency,” the source said. In other words, police are actively trying to entrap merchants.
“The police raid where the transaction is going down and seize not only the foreign currency but the wares,” the source added. “In the process, they investigate not only the busted parties in the transaction but also the people who stored the items or provided the transaction venue.”
These sorts of police crackdowns are based on North Korea’s foreign exchange control law, which strictly bans individuals from possessing or circulating foreign currency without state permission. According to the law, people must exchange foreign currency for North Korean won. If they are caught circulating foreign currency, they face having their cash confiscated or administrative or criminal punishments.
Under the law, police have harshly cracked down on person-to-person foreign currency transactions outside state control, treating them as completely illegal.
Merchants complain that “shaking them down using the foreign currency control law amounts to theft.”
As a result, market activity is declining. “Even if you have foreign currency, you don’t use it, and even if you have goods, you don’t sell them,” the source said. “The more business you do, the more careful you are, and in particular, merchants are increasingly wary of doing business with new partners.”
Above all, merchants are avoiding doing big deals ahead of the Ninth Party Congress. They worry that if they are caught moving large amounts of foreign cash, the case could blow up into a political issue rather than a simple economic crime.
“I know the state intends to stop private foreign currency transactions and circulation, but if they simply crack down on them, they’ll bring markets to a halt,” the source said. “And foreign currency won’t disappear. It will just go deeper underground.”
A Note to Readers
Daily NK operates networks of sources inside North Korea who document events in real-time and transmit information through secure channels. Unlike reporting based on state media, satellite imagery, or defector accounts from years past, our journalism comes directly from people currently living under the regime.
We verify reports through multiple independent sources and cross-reference details before publication. Our sources remain anonymous because contact with foreign media is treated as a capital offense in North Korea—discovery means imprisonment or execution.
This network-based approach allows Daily NK to report on developments other outlets cannot access: market trends, policy implementation, public sentiment, and daily realities that never appear in official narratives. Maintaining these secure communication channels and protecting source identities requires specialized protocols and constant vigilance.
Daily NK serves as a bridge between North Koreans and the outside world, documenting what’s happening inside one of the world’s most closed societies.
