-Caveat Lector- >From Int'l Herald Tribune Paris, Saturday, April 17, 1999 North Korea to Lose Main Foreign Bank Closure Will Complicate Pyongyang's Receipt of International Aid ---------------------------------------------------------------------------- ---- By Thomas Crampton International Herald Tribune ---------------------------------------------------------------------------- ---- North Korea will soon lose its main conduit for receiving international funds, including millions of dollars in donor assistance used to alleviate the country's persistent famine. The board of the Dutch investment bank ING Barings NV voted to close within six weeks the company's Pyongyang branch, one of just two foreign banks operating in North Korea, according to a source involved in North Korean finances. ING Barings in Hong Kong confirmed Friday that a decision had been made this week to wind down North Korean operations. Edward Naylor, the Asia-Pacific head of corporate communications for ING Barings, declined to comment beyond saying that the company planned to make a full announcement Monday. The closure will further isolate North Korea by reducing its international financial links to a handful of small, little-known correspondent banks in Macau and the Japanese provinces, the source involved in North Korean finances said. On Jan. 1, the Pyongyang branch of ING Barings stopped issuing cash for inward remittances after branch employees became reluctant to carry bags of hard currency across international borders to make up for the shortfall of local deposits, the source said. The branch manager sometimes lugged a backpack containing several million dollars from ING Barings' Tokyo office through a Beijing airport and onto the flight to Pyongyang, the source said. On other occasions, the source said, large quantities of cash were passed from the Chinese side of the Yalu River to waiting representatives of the Dutch company's North Korean partner. Although the four-year-old venture has been highly profitable, the source said ING Barings auditors had raised concern over the potential for money laundering as it is impossible to verify the source of funds from North Korean companies. International drug enforcement officials have repeatedly raised allegations of large-scale production of illegal narcotics in North Korea, and the country's diplomats have frequently been caught trying to smuggle drugs and pass off high-quality counterfeit dollar bills. North Korea's only other licensed foreign bank, a joint venture set up with the now defunct Hong Kong-based investment bank Peregrine Investments Holdings Ltd., is under control of liquidators. Pyongyang-based businessmen said international donors and businessmen would probably prefer to hand-carry bags of cash into the country rather than send large amounts of money via shaky financial institutions into state-controlled banks that regard deposits as national assets and regularly refuse to issue hard currency. ''This actually may be the final straw to drive out some aid organizations,'' the source said. Operational hurdles, especially regulations intended to prevent proper monitoring of aid distribution, have prompted several aid agencies to withdraw from North Korea over the last year, and others have threatened to follow. Relief agencies such as the World Food Program, Red Cross, United Nations Development Program and Children's Aid Direct have sent roughly $1 million per week through the Dutch company's Pyongyang branch over the last year. Beyond funds spent on aid, North Korea's several hundred resident foreigners must now use dollars in ash form for transactions ranging from telephone bills and postage to meals at the handful of North Korean restaurants intended for foreigners. Most aid agencies, resident foreigners and the few diplomatic missions in North Korea hold accounts at the ING Barings branch, which is run out of Room 418 in the drab pink nine-floor Potoggang Hotel in central Pyongyang. Since North Korea has no active foreign exchange market, exchange rates are obtained by a foreign staff member who is permitted to watch a Japanese financial news channel on one of the few televisions with access to foreign programming. The bank, with a capital of $2 million, is 70 percent owned by ING Barings and 30 percent owned by Korea Foreign Insurance Co., a Pyongyang-controlled business. The Pyongyang branch frequently rejected currency notes as counterfeit after they failed a three-machine procedure to establish authenticity. The North Korean economy, meanwhile, continues to degrade. Despite a ban on black market trading that is backed by the death penalty, a parallel exchange for the North Korean won began developing in September, the source said. Although too small to absorb transactions of more than several hundred dollars at one time, the black market values the dollar at double the official rate of 2.1 won. >From http://www.kcna.co.jp/contents/16.htm#5 <<Feast or famine? A<>E<>R>> Children's camps open Pyongyang, April 16 (KCNA) -- Children's camps across the country opened on the occasion of the birth anniversary of the President Kim Il Sung. Campers included children of officers of units of the Korean People's Army in the forefront, labor innovators in key fields of the national economy, scientists and technicians. They will enjoy mountaineering, sports and amusement and art activities.The children received by the Mangyongdae Children's Camp, the Songdowon International Children's Camp, the Soak Children's Camp and the Myohyangsan Children's Mountaineering Camp and other camps in different parts of the country enjoyed amusement and sports games to significantly spend the first camping day. CPRF slogans favored Pyongyang, April 16 (KCNA) -- Rodong Sinmun today runs a signed article in support of the slogans put forward by the Committee for the Peaceful Reunification of the Fatherland (CPRF) calling for great national unity and national reunification on the first anniversary of the publication of General Secretary Kim Jong Il's historic work "Let Us Reunify the Country Independently and Peacefully Through the Great Unity of the Entire Nation." The article says: The great unity of the entire nation is the key to smashing the unabated anti-national, anti-reunification campaign of war hawks at home and abroad and bringing about a breakthrough in national reunification. As the CPRF slogans say, all the fellow countrymen must courageously turn out to adhere to the principle of national independence, get united under the banner of love of the country and nation, improve inter-Korean relations, fight against domination by outsiders and anti-reunification forces, make contacts and strengthen solidarity for the full implementation of the five-point policy of great national unity. The slogans serve as one more powerful weapon in the hands of the Korean people in the struggle for the country's reunification and an inspiring banner for the whole nation in the implementation of the five-point policy of the great national unity. They fully manifest the firm stand and will of the Worker's Party of Korea and the DPRK government to achieve the unity of the whole nation, in disregard of differences in ideology, system, political viewpoint and religion and to accomplish the cause of national reunification in our generation without fail true to what the President Kim Il Sung intended and instructed in his lifetime. Letter to Kim Jong Il Pyongyang, April 16 (KCNA) -- General Secretary Kim Jong Il received a letter from O Ik Je, vice-chairman of the Committee for the Peaceful Reunification of the Fatherland, on April 15, Sun's Day. The letter describes Sun's Day as a joy and good fortune of national rebirth and a sacred day of history. It says: If a nation is to be a nation, it must have a genuine leader and realize independence, the life and soul of the nation. This has come true thanks to President Kim Il Sung. His noble will and traces led to saving Korea and building an independent country. His exploit shines all over the world under your guidance. Kim Il Sung's Korea will remain an impregnable fortress for independence which will shine forever as a strong power. ~~~~~~~~~~~~ A<>E<>R The only real voyage of discovery consists not in seeking new landscapes but in having new eyes. -Marcel Proust + + + + + + + + + + + + + + + + + + + + + + + + + + + + Every great advance in natural knowledge has involved the absolute rejection of authority. -Thomas Huxley + + + + + + + + + + + + + + + + + + + + + + + + + + + + Forwarded as information only; no endorsement to be presumed + + + + + + + + + + + + + + + + + + + + + + + + + + + + In accordance with Title 17 U.S.C. section 107, this material is distributed without charge or profit to those who have expressed a prior interest in receiving this type of information for non-profit research and educational purposes only. DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. 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