hyesan office storm corps
FILE PHOTO: Taken in August 2018, this photo shows a part of Hyesan, a city in Yanggang Province. (Daily NK)
North Korean smugglers are increasingly seeking employment with trading companies to circumvent recent government crackdowns on private smuggling. This strategic shift appears to allow traders to continue their business through more legal channels as state controls on trade intensify.
“Traders in Hyesan have recently begun seeking work with trading companies,” a Daily NK source in Ryanggang province reported recently. “This is a direct response to the increasingly harsh crackdowns on individual smuggling operations that previously cooperated with these companies.”
In the past, private individuals operated as independent smugglers in collaboration with trading companies. However, with North Korean authorities clamping down on individual smuggling, people are now seeking formal employment within these companies.
Since the COVID-19 border closure, private smuggling in border regions has become nearly impossible. Yet, state-affiliated smuggling has continued, with private individuals finding ways to profit by unofficially collaborating with state-backed trading companies.
Take used car imports from China, for instance. A trade permit (waku) is required, which individuals cannot obtain. Consequently, those with capital partner with trading companies that can secure these permits, paying a set commission to import the vehicles.
Essentially, trading companies receive official state permits while individuals provide the investment and conduct the actual trading.
“Trading companies, themselves short on cash, have been cooperating with wealthy individuals who can import items from China, splitting the profits,” the source explained. “But with the central government now intensifying inspections and cracking down on such collaborations, the situation has become much more challenging.”
As a result, some individuals are now seeking to officially join trading companies to maintain their trade activities more securely.
“The increasingly severe punishments seem to be pushing people toward safer, albeit less lucrative, options,” the source noted. “By joining a trading company legally, individuals can avoid crackdowns, and this is becoming a trend among wealthy traders.”
However, joining a trading company comes with significant trade-offs. Members must adhere to strict organizational requirements, including participating in various mandatory activities and surrendering a portion of their foreign currency earnings to authorities. These conditions continue to make some private individuals hesitant.
“Wealthy individuals have previously avoided organizational activities by paying an annual fee to their neighborhood watch unit,” the source said. “But joining a trading company means enduring weekly lectures, study sessions, and struggle sessions. It’s a substantial commitment that gives many pause.”
Read in Korean