North Korea arrests around 20 trading company heads in latest crackdown on unauthorized trade

The atmosphere along the China-North Korea border is growing even more tense due to the North Korean government’s inspections of trade-related entities. Daily NK has learned recently that the authorities have arrested almost two dozen trading company managers and related cadres for conducting unauthorized trade.

According to a Daily NK source in North Korea on Thursday, the authorities arrested around 20 heads of trading companies during a “joint inspection” of trade-related entities that began last month. Hundreds of trade workers have also been arrested and are undergoing questioning.

The ruling party’s Organization and Guidance Department is reportedly taking overall command of the joint inspection.

Those arrested are being charged with either importing items outside their approved import lists or distributing imported items that have not gone through proper quarantine procedures.

North Korean authorities are reportedly applying heavy punishments on importers who circumvent quarantine procedures, rather than focusing on just the import of unapproved items.

Daily NK understands that the items imported by companies busted in the latest inspection include consumer goods scarce in most of the country’s markets, including seasonings, soybean oil, sesame seeds, and sugar.

Based on Daily NK’s information, the authorities have confiscated all of the unapproved imported items. They have also confiscated the waku (trade certificates) of the relevant trading companies.

Moreover, inspectors are targeting trading companies involved in overseas remittances. All in all, with North Korean authorities cracking down on remittances and punishing the middlemen who facilitate them, North Koreans are facing great difficulties in transferring money.

North Koreans authorities, for their part, have learned that trading companies have been making money by taking commissions to assist in the sending of remittances, disguising them as trade payments from China.

A trading company attached to the Central Committee’s “Moran Guidance Bureau” is reportedly among those busted in the latest inspection.

Daily NK’s source, speaking on condition of anonymity, said that the authorities are making no exemptions in this latest crackdown – not even for trading companies attached to Bureau 39, which handles the ruling Kim family’s slush funds. If companies are caught engaging in illegal trade, they apparently face severe and “merciless” punishment.

North Korean leader Kim Jong Un has reportedly ordered that individuals caught in the inspection face criminal proceedings rather than “party-related punishments”; that busted cadre-level trade officials be stripped of their party credentials; and that the authorities apply the same criteria in their crackdown to companies affiliated with “special institutions.”

Given that North Korean authorities regard illegal trade by trading companies as “political activity,” offenders apparently face the severest of punishments — including death or confinement in a political prison camp — depending on the severity of their crimes.

“At the very least, nobody will get away with a mere slap on the wrist, like time in a forced labor or reeducation camp,” the source said.

The latest inspection is expected to last until the end of July, which suggests that the dampened atmosphere among traders along the border will endure for the time being.