To circumvent sanctions, North Korea uses slave labour – the exploitation of as many as 200,000 people – in over 45 countries around the world, including in the European Union. Worse still is that the funds generated from these operations help Pyongyang pursue its nuclear weapons development programme.
In an article by Joseph V. Micallef, a military history and world affairs author, published by military.com, the government of North Korea and various affiliated organisations “earn” up to $3bn yearly from the exploitation of its citizens as slave labour. As economic sanctions have bitten deeper into North Korea’s economy, Pyongyang has responded by steadily increasing the number of laborers it exports.
Starting in the 1980s, Kim Jong-il formed two agencies in the Korean Workers Party (KWP), Office 38 and Office 39, to create and manage various foreign businesses, including the provision of labour to overseas companies. The funds generated from these operations were earmarked for North Korea’s nuclear weapons development program.
At the same time, Pyongyang loosened its monopoly on foreign trade and allowed various government departments, starting with the military, to undertake their own trading operations and to secure their own sources of hard currency. Access to hard currencies is highly coveted and ensures its participants access to Western goods and a very comfortable lifestyle. The Kim family has used such access to reward its supporters.
Currently, there are around 14 organisations from the KWP, government and military that conduct foreign trade and earn hard currencies in North Korea. Their activities are centred around five North Korean banks that are used to repatriate and hold foreign currency accounts: Joseon Trade Bank (Cabinet/National Planning Commission), Southeast Asia Bank (government/military), Chang-Kwang Credit Bank (Ministry of Industry), Dae-Sung Bank (Office 39) and Koryo Bank (Office 38). Each bank administers the financial activities for one or more of the organizations that engage in foreign trade.
In addition to their trade activity, these various organisations also operate hotels, Korean themed restaurants and gift stores selling traditional crafts, principally in China and Russia, all of which are staffed by North Korean laborers. They also operate tourism facilities in North Korea. In addition, all these organisations engage in the export of North Korean workers.
According to a recent US-South Korea joint government investigation, it’s estimated that Office 39 controls around five billion dollars in assets worldwide.
Micallef also noted that the export of slave labour is in addition to the roughly 100,000 to 200,000 inmates in various types of prison labour camps inside North Korea. These consist of large internment camps for political prisoners (Kwan-li-so) and re-education prison camps (Kyo-hwa-so). These laborers are also used as slave labour in a range of activities from gold and coal mining to farming and manufacturing.
In a new and even darker chapter, Micallef writes that Pyongyang has supplied North Korean women to traffickers who smuggle them across the border and sell them as brides to Korean-Chinese, (Chosun Jok, a Chinese citizen of Korean descent) in northeast China. There have also been persistent reports, but no hard evidence yet, that North Korea has supplied North Korean women to various criminal gangs in Eastern Europe for use in the sex trade. There are long standing ties between Pyongyang and Russian criminal organisations.