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THE GEORGE WASHINGTON INSTITUTE FOR

RESEARCHING NORTH Sources, Methods, and Pitfalls

YONHO , EDITOR, NKEF Policy and Reseach Paper Series / 2021

YONHO KIM, EDITOR NKEF Policy and Reseach Paper Series / March 2021 THE GEORGE WASHINGTON UNIVERSITY INSTITUTE FOR KOREAN STUDIES

RESEARCHING Sources, Methods, and Pitfalls

YONHO KIM, EDITOR, NKEF Policy and Reseach Paper Series / 2021

YONHO KIM, EDITOR NKEF Policy and Reseach Paper Series / March 2021 About the North Korea Economic Forum The North Korea Economic Forum (NKEF) is part of the policy program at the George Washington University’s Institute for Korean Studies (GWIKS). The Forum aims to pro- mote the understanding of North Korean economic issues, distribute well-balanced, deeply researched, and multi-dimensional insights on the North Korean economy and to expand networks among various North Korea watchers, scholars, and policymakers. The Forum mostly involves closed and off-the-record meetings, where participants can freely and seriously discuss critical issues. Mr. Daniel Wertz is currently the chair of NKEF and is leading the meetings. NKEF also organizes special conferences made public throughout the academic year. The Forum is made possible by a generous grant provided by the KDI School of Public Policy and Management.

Editorial Board

DANIEL WERTZ (Chair of the North Korea Economic JOONGHO KIM (Non-Resident Scholar at GWIKS and Forum at GWIKS and Program Manager at the National former Senior Research Fellow at the Export-Import Committee on North Korea) Bank of Korea)

JISOO KIM (Director of GWIKS and Korea Foundation WILLIAM BROWN (Adjunct Professor at Georgetown Associate Professor of History, International Affairs, and University and former Senior Advisor to the National East Asian Languages and Literatures at GW) Intelligence Manager for East in the Office of the Director of National Intelligence) JOHN MERRILL (Non-Resident Scholar at GWIKS and former Chief of the in the State WILLIAM NEWCOMB (Fellow at C4ADS and former Department’s Bureau of Intelligence and Research) Member of UN Panel of Experts for North Korea)

Policy and Research Paper Series on the North Korean Economy GWIKS-NKEF 2021 / MARCH 2021 Table of Contents PREFACE 2

INTRODUCTION Cutting Through the Fog: The Methodology of Researching North Korea Daniel Wertz 3

TRADITIONAL METHODOLOGY Qualitative Interviewing: Approaches and Techniques for Sensitive Topics Sandra Fahy 9

Researching a Hard Target: Analyzing North Korea with Official Economic Data Stephan Haggard and Liuya Zhang 19

The Uses and Challenges of Imagery in Researching North Korea Jenny Town 37

CUTTING EDGE Watching Through the Lens of a Long Telescope: Monitoring North Korean Sanctions Evasion in the Maritime Domain Neil Watts 46

The Lap of Luxury: Using Open-Source Data to Trace North Korea’s Procurement of Luxury Goods Andrea R. Mihailescu 58

BIOGRAPHIES 69

ACKNOWLEDGMENTS 71

1 Preface North Korea has been considered a ‘hard target’ by analysts because of the country’s lack of transparency and accessibility. Its economy is no exception. With the dynamic marketization, North Korea watchers have difficulty collecting economic data and relevant information. Sources and methods themselves are often the main topics of debate among experts. In this context, the second part of the North Korea Economic Forum (NKEF) Annual Conference in October 2020 examined sources, methods and pitfalls of researching North Korea in the areas of in- terview techniques, official economic data, satellite imagery analyses, maritime monitoring, illicit finance networks, and unclassified commercial data. This collection of papers is a product of the conference sponsored by the KDI School of Public Policy and Management. The ongoing policy debates over how to address the challenges North Korea presents should be based on solid research methodologies in collecting and understanding information on the country. I hope this set of papers offers a range of views on conducting these important tasks.

The first part of the 2020 NKEF Annual Conference examined the current development trends in North Korea in the areas of public infrastructure, tourism, and mobile telecommunications. The North Korean economy, which has already been experiencing pressure due to tight , faced unprecedented economic challenges since the global outbreak of COVID-19. The health crisis revealed the vulnerability of North Korea’s economy and raised questions about the validity of ’s plans. The session pro- vided a unique opportunity for the Washington audience and beyond to understand the North Korean economy in a holistic way, learning about not only the current state of the North Korean economy but also its relationship to domestic politics, market forces, and international political and economic dynamics.

NKEF is part of the policy program at the George Washington University’s Institute for Korean Studies (GWIKS). The Forum has been recognized by the North Korea watchers throughout the as a center for knowl- edge-sharing and network-building, both private and public, on the North Korean economy which is relatively less discussed by the and security-oriented Washington policy circle. Based on the successful launch of the edited collection of Policy and Research Paper Series, NKEF will continue publishing creative, in-depth analyses on the North Korean economy relevant for both academic audiences and policy specialists.

Yonho Kim Editor, NKEF Policy and Research Paper Series 2021

2 NKEF POLICY AND RESEARCH PAPER SERIES 2021 DANIEL WERTZ Cutting Through the Fog: The Methodology of Researching North Korea

Kim Jong Il, the second leader in the nied by state-assigned counterparts, and trade partners – has allowed analysts and dynasty that has ruled the Democratic generally must stick to a restrictive, set scholars to get a decent picture of de- People’s of Korea for three gen- itinerary. The country has long remained velopments in North Korea, even if that erations, is reputed to have urged his sub- at the bottom of global rankings for picture is often incomplete or distorted. ordinates to keep the country “wrapped , and internet in a fog” ( and Sohn 2012, p. 74). access remains restricted to an elite few. This edited collection includes five That fog settled into place long before Pyongyang has long treated even certain essays by leading scholars and practi- Il’s assumption of power, and basic economic data as state secrets. tioners on how to conduct effective re- though it has dissipated to some extent Far-reaching international sanctions search on North Korea, focusing on both over the years, it still frustrates outsiders’ imposed on North Korea in recent years the use of traditional research methods efforts to understand North Korea. have only increased its government’s and the employment of more novel or incentives for opacity. cutting-edge approaches. Each of these There are few other countries where essays tracks different areas of research, political, social, and economic develop- But even if North Korea is still wrapped describing the different methodologies ments are harder to track than North - in a fog, that does not mean that scholars and skill sets necessary to make the rea, and arguably none where external and analysts remain completely in the most out of the sources available while demand for such knowledge so greatly dark. Careful, dedicated research and avoiding various analytical pitfalls. They exceeds supply. Travelers to the country analysis – relying on everything from ref- cover traditionally academic approaches – whether tourists, scholars, journalists, ugee interviews, to satellite imagery, to to research, such as qualitative interviews or humanitarians – must be accompa- data published by Pyongyang’s foreign and economic data analysis, as well as

3 open source techniques that are more beneficial to governments, allowing of- other developing countries to emulate, often applied in investigative reporting. ficials to make claims and take action in the country remained secretive to friend ways that do not compromise confiden- and foe alike. North Korea is among the hardest of tial sources and methods. For example, hard targets for scholars and research- when researchers use open source infor- Nonetheless, there have always been ers, but careful and methodical efforts to mation to publicly identify parties who some channels available for outsiders to pierce the fog have tremendous value. have violated sanctions against North try to make sense of developments with- Such research enhances understanding Korea, it may make it easier for govern- in North Korea. publications of a country that plays an outsize role ment authorities to build a case against – newspapers, professional journals, on the international stage relative to its those parties, whether in a court of law records of Kim Il Sung’s speeches, and size and population, owing to its nuclear or within the UN Security Council. other sources – have long been accessi- program, the provocative actions of its ble to those with the ability to make use government, and the ongoing human Finally, careful and intellectually honest of them. Through the Cold era, the rights abuses and humanitarian crises research on North Korea can serve as a Foreign Broadcast Information Service taking place within its territory. It takes counterpoint to the lazy reporting and (an open source branch of the CIA) North Korea – and North – out of rumor mongering that too often colors collected and translated North Korean the realm of the unknowable and the sui media depictions of the country. To media output, while a few specialized generis, and into the realm of compre- be sure, today’s relative abundance of institutions like the Library of Congress hensibility and comparison. informed analysis and commentary on collected North Korean publications for North Korea has not stopped media fren- use by researchers and specialists. De- Better information and understanding of zies over rumors about Kim Jong Un’s spite the obvious shortcomings of North North Korea, in turn, helps to influence health or various bizarre claims related Korean state publications as sources of the depth and quality of ongoing policy to the country. As this collection’s essay information, they are nonetheless valu- debates about how the U.S. and other by Jenny Town also points out, claims able when read through a critical lens stakeholder countries can best address based on rushed or sloppy analysis of (Schmid 2018) or as regime signaling the challenges the country presents – satellite imagery or other open source devices (Carlin 2015). State media are whether to pursue strategies of pressure tools can sometimes feed questionable also capable of erroneously revealing in- or of engagement, whether to prioritize media narratives about North Korea, formation the regime would rather keep peacebuilding or deterrence. High-qual- rather than dispel them. However, the hidden; as OSS Director William Don- ity research and analysis cannot settle availability of a more sober analysis ovan noted, “Even a regimented press these debates, of , but it can help provides – at a minimum – an informed will again and again betray their ’s to inform and frame them. Research on counter-narrative to a vacuous and sen- interests to a painstaking observer” the North Korean economy can demon- sation-driven news cycle. (quoted in Colquhoun 2016). strate the effects (or lack thereof) of sanctions; analysis of satellite imagery The small community of North Kore- can show developments at nuclear RESEARCHING NORTH an defectors in the South during this facilities or prison camps; qualitative KOREA – EVOLVING SOURCES period also provided scholars with interviews with AND APPROACHES insights into the structure and histori- allow for insights into lived experiences cal development of the DPRK. Robert and social change in the country. Scalapino and Chong-sik , in their Even in its early decades, North Korea monumental study in Investigative open source research con- was notable for the degree to which Korea (1972), combined a broad scope ducted by members of the public can it was closed to outsiders seeking to of interviews within this community with also play an important role by serving as interpret events in the country. In the a wide-ranging review of publications an independent check on claims based years after the , Russian and in Korean and multiple other languag- on secret or confidential sources, such Chinese officials regularly complained es, producing the first comprehensive as reports of a covert new nuclear facility about the North Korean government’s English-language study of the North or an upcoming satellite launch.1 Open failure to be forthcoming with them Korean regime. Notably, Scalapino and source research can challenge govern- (Person 2019). By the 1960s, the country Lee’s use of defector sources was the ment claims that are based on wishful ceased publishing most economic data source of some degree of criticism (Koh thinking, or on sloppy or politicized (Kim et. al 2007). Even as Kim Il Sung 1998), anticipating the doubts about intelligence. Conversely, independent began to promote the North Korean testimony that would come in open source research can also be highly regime internationally as a model for the wake of the two decades

1. Jeffrey Lewis (2016) contrasts the response to a 1998 intelligence leak about a suspected North Korean nuclear facility at Kumchang-ri to the handling of 2014 claims by an Iranian dissident group about a secret enrichment facility outside of . The former incident – which occurred before relevant open source material was easily available – hijacked U.S.-DPRK negotiations for several months until an investigation showed the fears of a secret nuclear facility to be unfounded. The latter story, in contrast, had little impact in part because independent groups were able to quickly employ open source information to cast doubt on the dissident group’s claims.

4 NKEF POLICY AND RESEARCH PAPER SERIES 2021 later – a topic which Sandra Fahy’s essay The collapse of the , and Domestic changes within North Korea in this collection ably addresses.2 the ensuing economic crisis and famine during the famine years and in their after- in North Korea during the , signifi- math provided an aperture through which In 1977, the U.S. National Archives cantly expanded the scope of sources observers could better understand social opened up its cache of North Korean doc- available to scholars and researchers change and everyday life during this pe- uments captured by UN Command forces seeking to understand developments riod. In 1995, Pyongyang admitted to the during the Korean War, enabling a new in the country. These changes coincid- dire situation in the country – caused by wave of scholarship on a brief but critical ed with ’s own process of severe flooding, in the regime’s reckoning period of North Korean history. Among democratization, which gradually made – and allowed international humanitar- the first scholars to make full use of this North Korea less of a sensitive subject ian agencies to enter its borders. Even resource was , whose for research, analysis, and policy advo- though humanitarian access during this two-volume history on the origins of the cacy among South Koreans. period was contentious and restricted Korean War (1981, 1990) delved deeply (Binet 2014), it provided somewhat of a into the politics of North and South Korea The partial opening of Russian, Eastern window into the severe conditions inside after liberation. Dae-sook Suh’s pioneer- European, and Chinese archives pro- the country as well as a firsthand view of ing biography of Kim Il Sung (1988) vided scholars with major new insights North Korea’s stovepiped bureaucracy (Natsios 2001; Smith 2005). UN humani- tarian agencies also began collecting In 1977, the U.S. National Archives opened up its cache of and publishing data North Korean documents captured by UN Command forc- from North Korea at this time, providing es during the Korean War, enabling a new wave of scholar- important insights ship on a brief but critical period of North Korean history. into demographics and questions of security. As Stephan Haggard and Liuya similarly made good use of these archival into historical developments in North Zhang’s contribution to this collection materials, as well as Japanese records Korea, and had a particular impact on notes, however, this data (and subse- covering the pre-1945 period. the historiography of the Korean War. quent demographic or nutritional studies Archival research by Kathryn Weath- produced in collaboration with the A small amount of information on North ersby (1995), among other scholars, North Korean government) should not Korea during the era also revealed the political dynamics behind be viewed uncritically, given the limited came from foreigners who spent time Kim Il Sung’s decision for war in access of the agencies collecting it and living in the country or who traveled 1950, demonstrating his multiple at- the incentives of North Korean authorities there. The account of Ali Lameda (1979), tempts (eventually successful) to lobby to dissemble in various ways. a leftist Venezuela poet who lived in for Soviet backing and Pyongyang as a translator before being support prior to initiating the conflict. A much larger window into North Korean imprisoned in North Korea from 1967- Evidence from the archives has also society began to open in the late 1990s 74, provides a particularly noteworthy helped scholars understand the moti- and early , as tens of thousands of example. His testimony, published by vations behind ’s intervention in North Koreans began seeking refuge in , shined a small the Korean War (Chen 1994), as well as China, with some eventually making it to light into conditions in North Korea’s other episodes shaping Pyongyang’s South Korea. This population provided a labor camps decades before refugee complex relations with its great power wealth of insights into conditions inside accounts began to reveal the extent of allies (Person 2019). The Woodrow a changing North Korea, both through suffering and deprivation within these Wilson Center’s North Korea Interna- quantitative studies (Haggard and No- institutions. During the 1970s and , tional Documentation Project has been land 2011; IPUS 2020) and through qual- a modest number of Western journal- an invaluable resource for scholars and itative interviews (Fahy 2015; Oh and ists, peace groups, researchers, and policymakers, collecting and trans- Hassig 2015). Memoirs written by North politicians also traveled to North Korea lating thousands of documents from Korean , such as Kang Chol- and provided public accounts of their North Korea’s former communist allies hwan’s Aquariums of Pyongyang (2001), impressions.3 into English. have also provided insights into life in

2. Scalapino and Lee’s sources, it should be noted, had a very different demographic profile than later defectors, and the authoritarian character of the South Korean government at the time of their research may have cast a distinct set of questions on the reliability of their interviewees’ testimony. 3. See, for example, Kim and Koh 1983. Additionally, Kim Il-sung met with a handful of Americans during the Cold War era, including for interviews with the New York Times and Washington Post in 1972 and a meeting with Rep. in 1980.

5 their authors’ former homeland and Finally, developments in North Korea in how North Koreans experienced the recounted harrowing tales of escape. recent years have prompted the em- famine of the 1990s. She adroitly translates ployment of cutting-edge new research theoretical insights into practical advice The growth of North Korean refugee techniques. As North Korea has en- on how interviewers can frame their own populations in South Korea and China, gaged in aggressive cyber campaigns research agendas and effectively elicit coupled with the development of mar- for espionage and profit, efforts to track information from interviewees. Drawing ket-based trade along the China-DPRK Pyongyang’s digital footprints have from feminist scholarship, Fahy argues border, led to the establishment of new ramped up (Recorded Futures 2020, Jun that North Koreans’ narratives about their transnational networks reaching into et al. 2015). Research into North Korea’s own lives are often met with “testimonial North Korea to facilitate the movement efforts to employ new technologies to injustice” that matches their subordinate of people, money, goods, and infor- monitor and surveil its own population social status, leading defectors’ personal mation. These networks facilitated the has proven fruitful, as well (Kretchun et experiences to be dismissed as unreliable emergence of new outlets, such as Daily al. 2017, Williams 2019). Additionally, or unrepresentative. Her essay also ad- dresses the issue of “standpoint episte- mology” and the positionality of knowl- edge relative to social status. Fahy frames Changes in technology have also had a major this issue nicely: as a scholar conducting fieldwork with sur- impact on the methodology of researching vivors, she was an expert on famine and North Korea over the past few decades. the structural factors that cause it. Her in- terviewees were experts at living through famine – their knowledge pertained to the immediate tasks of adapting to and NK and Rimjingang, that feature regular the expansion of U.S. and UN sanctions surviving famine as it manifested in the reporting from sources inside North Ko- against North Korea has led Pyongyang context of their own lives. rea. Other specialized publications, such to take measures to obscure its foreign as NK News, have also used sources from trade. Concurrently, researchers and Fahy offers examples of how to ask within Pyongyang’s small expat commu- bodies such as the UN’s Panel of Experts “questions that stir elaboration,” as well nity and foreign tour operators to good have employed new techniques and as how to assess the reliability of an effect. Additionally, interviews with - approaches to track North Korea’s illicit interviewee’s narrative and how to be nese merchants and traders engaged in shipping (as described by Neil Watts’ aware of the “cognitive blocks” between business with North Korean counterparts article in this collection) and procure- interviewer and interviewee that can have provided journalistic and scholarly ment networks (as described by Andrea lead to false assumptions or miscom- insights (Demick 2010; Hastings 2016; Mihailescu’s contribution.) munication. Her essay emphasizes the Thompson 2011). importance of language in interviews with North Koreans. Listening carefully Changes in technology have also had a THE RESEARCH PROCESS to defectors, Fahy points out, is crucial major impact on the methodology of re- to opening up new areas for discussion. searching North Korea over the past few Moreover, how language is employed decades. As Jenny Town’s essay in this Conducting original scholarly or open can also be highly revealing of the social collection describes, commercial satellite source research on North Korea requires and epistemic context of the speaker. imagery has increased in quality and the development of specialized skills Fahy recommends that interviewers pay availability over the years, while costs along with patience and intellectual close attention to how their interviewees have declined. Satellite imagery analysis, humility. The essays in this collection do used wordplay and humor; how rumors once in the exclusive domain of gov- not cover the gamut of methods and emerged or were passed on; and even ernment intelligence agencies, enabled approaches in the study of North Korea, recollections of self-talk and dreams. pathbreaking studies of North Korea’s but they do provide a range of insights military facilities (McKinzie and Cochran into how to conduct effective research Stephan Haggard and Liuya Zhang’s essay 2004) and prison camps (Hawk 2003) in (and how to avoid pitfalls) in their on using official economic data to analyze the early 2000s, and has now become respective fields of inquiry. The essays North Korea provides a comprehensive a staple of research and reporting on also demonstrate the importance of survey of the available sources, their uses, North Korea. The Internet has also made multi-disciplinary and methodologically and their limitations. The authors look it far easier for researchers to access eclectic approaches to understanding particularly closely at the mirror trade North Korean media, even though South North Korea, given the limitations of rely- data published by North Korea’s foreign Korea’s National Security Law contin- ing solely on any type of source. trade partners, a crucial – though flawed ues to restrict domestic availability and – source of information in the absence of U.S. sanctions have prompted major Sandra Fahy’s essay on conducting quali- any trade data published by the country -hosting services to delete much tative interviews with North Korean defec- itself. They trace the collapse and eventual DPRK-origin content. tors draws on her experience researching rebound of North Korea’s foreign trade

6 NKEF POLICY AND RESEARCH PAPER SERIES 2021 that began in 1990s; the rise and fall of imagery. As she points out, faulty analysis databases, North Korean defectors, the inter-Korean trade after the beginning of that purports to be based on satellite “Korea watcher” community, surveillance the “” in the early 2000s; imagery can quickly propagate through reports from UN Member States, and and the trajectory of China’s role as North the public sphere, “impossible to retract North Korean state media – to conduct Korea’s dominant trade partner, with a and difficult to correct.” The incentives its investigations. close examination of changes in trade for analysts to get a scoop and beat their composition following the imposition of peers to publication increase the proba- Finally, Andrea Mihailescu’s essay pro- wide-ranging UN sanctions on North Ko- bility of someone getting it wrong, even vides two case studies in how researchers rea in 2017. Haggard and Zhang also ex- unintentionally. Furthermore, Town points can track North Korea’s foreign procure- amine the “humanitarian” data generated out how open source research based ment networks. She first uses Russian by UN agencies, looking both at reported on satellite imagery can spur “two-way customs data to investigate North Korea’s flows and at “collaborative” data pro- learning” – such publications allow North imports of purebred white horses from duced by these agencies in partnership Korea’s government to better understand – horses that have been featured with the North Korean government. Final- its own vulnerabilities, leading to the in state images of military parades and in ly, the authors look briefly at North Korea’s concealment of sensitive facilities or to Kim Jong Un’s symbol-laden visits to Mt. self-reported budget data, expressing deceptive actions intended to mislead Paektu. Drawing on recent investigative skepticism about any conclusions that observers watching from the sky. work by the nonprofit research organi- might be drawn from this information. zation C4ADS and the New York Times, The essay from Neil Watts, a former Mihailescu then traces how North Korea’s Jenny Town’s essay on the use of satellite member of the UN Panel of Experts for procurement networks have evaded imagery emphasizes the importance of North Korea, provides a firsthand look sanctions to import armored luxury cars context and cross-referencing in getting into how the Panel collects information into the country. As her analysis reveals, this kind of analysis right, and reviews from disparate sources to investigate the thorough examination of documents the various kinds of pitfalls that can lead North Korean sanctions violations. Watts such as customs records and shipping analysts to get it wrong. She starts with provides a close review of the Chong data can sometimes allow a diligent an overview of how the cost, quality, and Chon Gang incident, wherein Panamani- researcher to map out – at least partially – the winding pathways of such procurement. However, North Korea’s Collectively, the essays in this volume demonstrate both evolving techniques for concealment means the difficulties and the possibilities for producing in-depth that researchers (not to research on North Korea. Conducting such research is by mention exporters, cus- toms officials, and law no means easy – it can require advanced language skills, enforcement agencies) financial resources for access to specialized databases, or need to innovate to keep pace. Mihailescu the broad background knowledge necessary to interpret ends her essay with a set a satellite image or a flawed dataset. of recommendations on how governments and the private sector can take action to create a availability of commercial imagery has an authorities interdicted a North Korean less permissive international environment evolved over time, and how it has been vessel covertly laden with a cargo of for North Korea’s illicit procurement. applied to monitor developments pertain- arms. The incident provided the Panel ing to North Korea’s economy, food pro- with significant insights into the structure Collectively, the essays in this volume duction, prison camps, and WMD-related and operations of North Korea’s illicit demonstrate both the difficulties and the facilities. Her essay emphasizes the impor- shipping networks, setting the stage for possibilities for producing in-depth re- tance of analysts having sufficient baseline subsequent investigations as the scope search on North Korea. Conducting such knowledge of a particular site or activity in of the UN sanctions regime expanded research is by no means easy – it can order to assess what a given image may in the following years. Watts proceeds require advanced language skills, finan- or may not mean. The crucial role of such to detail how the Panel’s investigative cial resources for access to specialized baseline information makes triangulation work has proceeded in recent years, databases, or the broad background of satellite imagery with other sources of with a purview covering everything knowledge necessary to interpret a information particularly important. from illicit shipments of fuel and to satellite image or a flawed dataset. But the procurement of dual-use goods for cutting through the fog is by no means Town’s essay also raises important ques- North Korea’s military. As he describes it, impossible, and we are fortunate to have tions about the ethics of open source the Panel has relied on information from the experts in this volume helping us to analysis using tools such as satellite a very wide range of sources – maritime chart a path. 

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Williams, Martyn. 2019. “Digital Trenches: North Korea’s Information Counter-Offensive.” Committee for Human Rights in North Korea.

8 NKEF POLICY AND RESEARCH PAPER SERIES 2021 SANDRA FAHY Qualitative Interviewing: Approaches and Techniques for Sensitive Topics

ABSTRACT a way for researchers to position them- was told by an esteemed and respected selves in a project and to connect with scholar, not Korean but based in Korea, research subjects transparently. A spe- that the topic of famine survival and This essay describes how researchers cific approach to starting interviews on my method of gathering information can employ qualitative interview re- sensitive topics is outlined and followed through interviews with survivors was search techniques with individuals. The by an analysis of cognitive blocks—where not valuable. Rather than being disheart- case study is taken from two decades of interviewer and interviewee misunder- ened, I was surprised. How could anyone work by the author recording oral history stand one another—and how to be aware not see the inherent value? I tried to from North Korean defectors on their ex- of these and possibly remedy them. clarify by adding that no research had perience of surviving the 1990s famine. Finally, six tools that turn language into been done collecting or examining Sensitive, emotional, and personal topics a resource during qualitative interviews the oral histories of people who had are easier to navigate and explore if the and their analysis are identified. survived famine. Globally. Ever. Nor researcher takes a thoughtful approach. had survivors, at aggregate, decided to The essay outlines the epistemic injustice record and share the stories themselves. researchers and their interview subjects ON KNOWING: AN Globally. Ever. Information was out there, face when dealing with traumatic, sen- INTRODUCTION carried in the minds of those survivors, sitive topics. It addresses how to access and yet it remained unexplored, by any- and assess credibility in research mate- one. Perhaps in the exchange, I was the rial gleaned from qualitative interviews. When I began fieldwork for my study of obstinate one. I was. I ignored his views Standpoint epistemology is identified as famine survivor experiences in 2006, I and carried on.

9 I am glad I did. My perseverance result- unjust engagement with the testimony Korean when she, an ethnic Korean in ed in the collection of dozens of survivor of such an individual, what Fricker calls , could not? He could have been histories from the 1990s North Korean testimonial injustice. When it occurs, anyone, back in North Korea. Anyone. famine. When I published Marching credibility is entirely denied to some In the cloud of contagion, I could also Through Suffering: Loss and Survival subjects. A shorthand example is the be anyone. in North Korea (2015), it was the first notion that quantitative research is de qualitative study of how famine survival facto more reliable, credible, or useful The worry is that North Koreans could is experienced. This essay, intended as than qualitative. The reflexive, schooled be anyone and anyone can be a liar. If a glimpse into what that experience was response is to acknowledge that certain they are lying, then we are. If they are like, outlines some of my methodologi- types of knowledge are best gathered unknowing, then we are. The problem cal approaches and techniques for those through one or the other. with North Koreans is us. We want North who may wish to likewise elicit subjective Koreans to tell us everything they can, knowledge from survivors of sensitive Nevertheless, an economy of credibility of value, about their country, but often and traumatic collective experiences. persists. For example, a frame of thinking they are experts only about their own governed by testimonial injustice, or an lives. Later, I elaborate on methods Although colleagues and mentors tend economy of credibility, might ask how the reader can use to elicit knowledge to give good advice, sometimes it is we can trust North Koreans (defectors). (pieces of the puzzle) that can be better to trust your gut when it comes to The positionality of North Koreans as analyzed and, possibly, fitted together. knowing what is worth investigation. You North Koreans will be evoked to justi- North Korea is a space of stratified pow- are, hopefully, the expert on the broad fy this line of inquiry (presupposing a er and stratified knowledge. The puzzle scope of your field and the new question sameness of all North Koreans): “They needs to be arranged according to how or questions you bring to bear. Also, are vulnerable. Poor. They need to get its pieces fit together. perhaps more important, you need to ahead.” Then, at the same time—note the read. Widely. Chances are that someone contradiction—is the mysterious inability This thinking raises other questions: How somewhere has written in a way that sig- to position them as a specific someone: can we trust qualitative interviewing as nals permission for you to question the “They could have been anyone back in a method of information gathering? It research as your gut suggests. Chances North Korea!” produces fuzzy, uncountable measures. are that is feminist. For instance, How can we infer anything about the in 2007, the scholar Miranda Fricker These statements are not of my imagina- majority from this largely self-selecting published Epistemic Injustice: Power and tion but instead what I have heard said by population of defectors? These are the Ethics of Knowing (Oxford). By the a few researchers, and lay people, in or- standard questions people blithely ask. time her book came out, I was deep into dinary dialogue. It is my contention these The questions reveal assumptions that my qualitative interviews with North Ko- sentences signal a concern about consid- cage thought. Sometimes these frames rean defectors. I bring up Fricker’s book ering North Koreans as individuals. To do are so restricting they eschew questions because she discusses an issue core to so requires that the researcher multitask, altogether in favor of statements: Your work with North Korean defectors, an encounter personalities, and engage work is very niche, someone might say. issue that is core not only to this essay with the person on the other side of the Or, what a small sample. Or, more kindly but also to researchers of North Korea table—a person who may be unlikable, but equally dismissive, what interesting generally. If you study North Korea (or or disinterested, or busy. And people are stories. Such comments indicate that countries like it) then you are invariably emotionally, socially, intellectually messy. epistemic injustice is contagious. Passing studying power in its myriad manifes- Flawed. Yet it is through or with these from interview subjects, who are alleged tations. And if you are studying power, subjects that we need to work to gather to be unknowing, to researchers becom- then you are in a fight over what kinds insights about their former homeland. ing unknowing by proxy. of knowledge are deemed worthy. And thus we are back where we started: in An example is my fieldwork in the face of doubt over types of knowing, in the spring of 2007, during which I ON CREDIBILITY AND EPISTEMIC what is worth knowing, and how to get stayed at a rental house in Shin-Oku- ADVANTAGE at what you believe is worth uncovering bo. A gentleman, who had stayed at and sharing with others. the same location the night before, departed. I knew he was North Korean, The first point in this essay concerns Writing as an analytic philosopher, Frick- a defector. We had met through the credibility and epistemic advantage. er explains that certain types of knowing community of defectors who resettled A prejudice asserts that only certain are often deemed more credible or in Tokyo. When I casually mentioned kinds of knowing, based on positions reliable than other types. She elaborates that he was from the North to the wom- of power, are valuable. It taxes value. by identifying the consequences of an who owned the house, she stepped It claims that how and from whom we this belief, that it prejudices us against backward. Her hand on her chest, “Oh, gather knowledge determines credi- assessing sources equally. For instance, my gosh! That’s scary.” Then I felt her bility. North Korean defectors occupy some subjects might be deemed un- anxiety move from him toward me. How a historically subordinate status. They knowing a priori. This would lead to an could I, a foreigner, know he was North are subordinate to their state. They are

10 NKEF POLICY AND RESEARCH PAPER SERIES 2021 subordinate when in South Korea, and power are located across the landscape possible to identify reliable evidence that most certainly when in third countries being mapped. Using standpoint epis- informs a fuller picture of the psychoso- as they leave, return, and finally leave temology, we can locate and map these cial subjective experience of North Korea. North Korea for good. Fricker explains as they interact. Why is this important to that such social groups are “unjustly so- the case of North Korea? North Korea is, cially subordinate” and thus afflicted by par excellence, a landscape of oppres- STANDPOINT EPISTEMOLOGY: the economy of credibility: measured sive social relations kept in place by ISN’T FAMINE ABOUT FOOD? in how we dismiss what they know and powerful institutions that are both real what we think they can know. and imaginary. In developing an idea of how that system of hierarchy and op- In Marching Through Suffering: Loss and When North Koreans speak about their pression operates, a principal element Survival in North Korea (Columbia 2015) lives in the North, their experiences in of analysis is narrative elicited from a and throughout Dying for Rights: Putting third countries, and their experiences in range of social locations. To wit, Thae North Korea’s Human Rights Abuses on South Korea, these narratives meet with Young Ho experienced the hierarchy the Record (Columbia 2019), I discuss testimonial injustice. In short, they are and oppression of the North Korean qualitative interviewing as a way to gather met with doubt. Although all North Kore- state in ways that were materially, phys- valuable information. For the first book, I ans will experience testimonial injustice, ically, and emotionally different from conducted qualitative interviews to gath- not all will experience it equally. For in- Mrs. Yeonmi . In gaining perspec- er as much information as possible con- stance, former UK diplomat Thae Young tive on how hierarchy and oppression cerning what famine survivors from North Ho will likely encounter far less testimo- operate within North Korea, multiple Korea had to say about living through the nial injustice than, for example, a young voices are vital. A critical point con- famine experience. North Korean famine defector from who defected cerning standpoint epistemology that survivors are experts at living through the while a university student. Nevertheless, emerges from these social locations is social phenomena of famine. This brings he will experience it. His standpoint that it does not automatically privilege me to my second point, which is about epistemology, a term I explain momen- the perspective of the oppressed (Hard- standpoint epistemology. tarily, will be flattened by the claim that ing 2004, 32). he needs to make a living now that he is The researcher should approach interview- in South Korea. The natural resource he As Sharon Crasnow explains, “Stand- ees with questions that honor their stand- mines, the dismissal goes, is his knowl- point theorists argue that those in point epistemology. An example makes edge of North Korea. As if he can bring positions of subordination have an epis- this clear. I was studying North Korea’s fam- no other value to South Korean society, temic advantage regarding some kinds ine of the 1990s. Having studied or indeed the world. of evidence, special inferential heuris- globally before my SOAS PhD field work tics, and interpretative or explanatory under the direction of social anthropolo- Similarly, although all North Korean hypotheses” (2004, 151–52, gist Johan Pottier, I was a famine expert. defectors have access to a special sort added). Thus the question becomes My interviewees were also experts, experts of knowledge by virtue of being former whether the knowledge sourced from on having lived through the North Korean North Koreans, they are not necessarily subordinate groups “allow[s] them to famine. This standpoint epistemology nat- all the same, nor do they have access understand better and in ways that urally presented itself in our interactions. to the same kinds of knowledge. This promote their ability to change their nuance is best contemplated in light of world?” As we will see, sometimes yes. After collecting the oral history of Mr. Lee how feminist theory identifies gender Sometimes no. using qualitative interview techniques as a “social location” that gives rise to (detailed later), we went for . I types of knowing. Being a former North The dismissal of North Korean defectors offered lunch as a way of thanking my Korean is a social location that gives is masked as concern that the passage interviewees. Mr. Lee was a young man in rise to certain types of knowing that of time and its burden to memory, or his early twenties. From a family of teach- exist among a series of identity mark- financial remuneration, will tamper with ers and having completed his high school ers (young, old, rural, urban, educated, information. If memory is an imperfect education, he had left North Korea’s city literate, and so on, which also give rise conduit to the past, is testimony valuable? of a few years prior. At lunch, I to types of knowing). Caution is appro- If an individual is financially remunerated left some food uneaten on my plate. priate here. This is not to suggest a frac- for , is the testimony reliable? tal-like proliferation of identity markers I examine these frames of thinking else- “You study famine,” Lee remarked, “but where all becomes relative. If that is not where in my work and therefore do not you leave food on your plate.” the point, what is? belabor them here (Fahy 2019). I felt embarrassed, but I liked that he As Shanon Crasnow eloquently ex- The qualitative interview techniques for pointed it out. He saw a contradiction. plains, it is important to distinguish sensitive topics described here demon- I said, “Yes, I study famine.” I apologized that perspective is not what is being strate that defectors have epistemic for leaving food on my plate. “Famine highlighted here (2004, 149). Instead, advantage: although testimony will invari- is not about food,” I said. I knew how positionality is a mapping. Practices of ably have gaps and imperfections, it is strange this would sound.

11 Our roles as interviewer and interviewee Bringing Harding’s observation in line famine is concerned. I wanted to under- switched. He asked me to elaborate on with Crasnow’s question, if knowledge stand it from its inside out. I was asking what was for him a bizarre claim. Famine sourced from subordinate groups will them about their lives in an effort to get is not about food, I explained, it is in- “allow them to understand better and in insights into the psychosocial experience stead about who can get food and who ways that promote their ability to change of the famine, how it was understood (and cannot. He nodded. their world?” (2004, 151–52), the answer misunderstood) on the ground. here is both yes and no. Yes, it enabled “Not everyone starved,” I explained. Mr. Lee to leave his country because In my research, I was curious about what “Famine is about power. Kim Jong Il there “wasn’t enough food”—but his it was to live with others through day didn’t lack for food because he didn’t knowledge of the famine disenfran- after day of hunger, to live in a nation lack for power.” Lee nodded. chised him from knowing that solutions that makes broken promises about basic to the famine were within the power of needs, during a time that must have I do not belabor the field of famine the state. been frustrating, painful, and irksome. studies here except to say that the most I wanted to know how people saw cursory look at the peer reviewed liter- For Mr. Lee, the most salient feature of his structural inequality manifest in day-to- ature attests to an abundance of food experience was the absence of food and day lives. How people made sense of to feed everyone on the . The his herculean efforts to get it. In the imme- the state’s unrequited loyalty and the matter is not one of food, in fact, but diate, food was what he needed to get by. promise of a better future being broken access to rights that ensure access to But in the main, rights were what his and time and time again. Who or what did food or the ability to alter one’s access society’s well-being needed to endure. they see as responsible. Who or what to food (Devereux 2001; Edkins 2000; Scarcity of rights was the real issue: his did they see as the solution. Answers Sen 1981). This was also true of the right to information and his right to the to these questions go some way to North Korean famine and remains the mechanics that sustain , to explaining the universal phenomena of case. Scarcity has never been the issue: freedom of assembly, to free movement, why famines have not led to uprisings access and the ability to alter access to freedom of expression. His powerless- or revolution. These answers tell us how is. Famine is born out of situations that ness to alter the forces sustaining these North Korea survived the famine that have more to do with absence, or lack, violations of rights manifested as an emp- took countless lives and scarred the lives of democracy and absence, or lack, of ty stomach. Structural rights violations of millions. These answers tell us how to than quantities often manifest through phenomena that predict similar disasters in the present of food. In other words, who has access conceal originating factors. Phenomena, and going forward. In other words, such to power or the ability to wrest power? such as famine, manifesting at a societal approaches to research tell us not only Who has access to enough power to level, are often the culmination of struc- about reality, but also about the reality alter their access to food? Who has tural rights violations seeded decades people think is there around them caus- access to enough power to alter their and sometimes generations earlier. This ing the calamity in the first place. means to get food? This tells us about brings us back to epistemic injustice. another feature of famine that ought not be surprising. It maps itself along A famine survivor’s inability to parse the THE APPROACH existing lines of inequality. Those very structural components of famine does individuals who are “unjustly socially not mean that he is an unreliable witness. subordinate” are hit the worst: women, Instead, his knowledge, rooted as it is This brings us to how to approach the children, the disabled, the old, the pe- in his experience tells us about famine interview. A qualitative interview is not riphery. The very ones who are deemed in situ; it tells us that the experience so a cross examination in a court of law; to unknowing, unworthy, will instead know confounds the individual as to make its approach it as such would be leading the experience most intimately. What is structural solutions incomprehensible with the chin. The goal is to get the sub- the nature of their knowing? How can to the majority of people in situ. His ject to speak. In a court of law, a lawyer we open our frame of thinking enough to experience tells us what famine looks sits on either one side or the other. The solicit, hear, appreciate, and engage it? like face-to-face rather than how it looks qualitative researcher does not, and to experts. must constantly strive to be method- Thus I repeat, borrowing the ideas of ologically objective. This means that, for Sandra Harding, that standpoint episte- So to clarify, I refer here to epistemology. example, even if we find some manner mology does not automatically privilege To elicit the knowledge our informants of speech or view contemptable we the perspective of the oppressed as have, we need to design questions that nevertheless deliberately and method- the correct interpretation of matters will pull this out and know what to do with ically exercise objectivity. The goal is to (2004, 32). Instead, in combination with it. Perhaps this is the mistake my senior get the interviewee to feel comfortable the standpoint epistemology of the colleague made those many years ago. enough to open up, which gaining their researcher, it demonstrates evidence Perhaps he assumed I was going to ask trust will facilitate. for how matters are understood on the North Koreans to educate me about “The ground. How the famine is understood Famine.” Maybe he didn’t realize that I was Because I was studying how people shapes how people try to cope with it. after a different kind of knowledge where understood and survived the famine, it

12 NKEF POLICY AND RESEARCH PAPER SERIES 2021 would have been disastrous to start by nothing to celebrate. This, though, would Like Korea, the land was divided, the asking point blank about the famine, star- be too hasty a conclusion. Consider first, people separated, and in 1847 the Irish vation, and food resources. This caution, where in the landscape of the interview- experienced a famine, too. The history of of course, applies to any sensitive topic. ee’s personal narrative does she halt, cry, the Irish famine has never been written How do we begin to talk of sad, difficult pause, and gasp? Where does she strug- by those who experienced it, I explained. matters? I recommend beginning and gle to share the depths of emotion relat- Nor that of any famine history, by those ending the interview, as much as possi- ed to what she experienced? Do we not who survived it. This is what I was trying to ble, with comfortable topics and positiv- lose language as we face greater depths capture with North Koreans, their experi- ity—at a point in the individual’s personal of sorrow? Is it not easier to narrate what ence of their famine. It was about me and narrative that predated the famine. happens in the wake of disaster rather it was about them. I was not suggesting than the details of the disaster itself? false equivalency but instead connection. Although individuals knew that my aim This is why it was important for me to was to collect their oral narrative of the listen not only to what interviewees said, Qualitative interview research means famine, I began with the context—their but also to what they did not. What they asking questions that stir elaboration. The hometown. I asked the interviewee to did with their bodies as they did and qualitative interview is about pulling life tell me something they fondly recalled did not use words to communicate, the stories out of the interviewee. This can about it. Selecting a time before the way they were or were not pushed by only be done by being a good listener famine established a comfortable and emotions. Another, trickier tool concerns to identify points of entry for further sometimes even pleasurable point of how their emotions awoke matching exploration. When the interviewer speaks entry. Famines creep into a society. I emotions within me. Their emotion was the language of her interviewee, this knew that awareness of the famine would have manifested differently for each person but This brings us to how to approach the interview. A qual- mapped along lines of itative interview is not a cross examination in a court of inequality. Thus, though we started with the law; to approach it as such would be leading with the topic of the hometown chin. The goal is to get the subject to speak. and a positive aspect of it, I knew we would eventually reach the famine. Thus I could ask, “When did you communicable, transferable, expansive. is much easier. Particularly for work on first realize all was not well?” Although it To suggest that it captured me makes North Korea. This brings me to my fourth is likely that you will have a set of ques- it sounds negative rather than being a point. I cannot stress enough how critical tions or topics you hope to cover, remain sharing, a gifting. language is as a resource for research on flexible and open. Steer the conversa- North Korea. This is because language is tion gently. The qualitative interview is I asked naïve questions to balance a resource in North Korea. Many North first and foremost a conversation. Try to power between myself and interviewees Korean defectors say that truthful words shepherd the interviewee into a narrative and to remind them that they were the are more powerful than nuclear weap- telling of events. If possible, encourage experts on what we were talking about: ons in North Korea. I encourage those chronological iteration, and then listen. How did the authorities let you know a who use qualitative interview methods famine was happening? How did you with North Koreans to engage using the It might be that the interviewee strays off communicate with each other about the , whether through an topic and onto something that preoccu- famine? To whom did you complain? I interpreter or directly. It is a powerful pies her recollection of the experience. knew the questions were illogical, but I tool for discovering aspects of life in the Sometimes this can nonetheless reveal also knew that they would prompt can- North, a way to discover the psychosocial something about the topic of your did replies. These questions are offered space. Language, and its siblings—laugh- interest. For example, I noticed famine here as examples. ter, crying, and silence—are useful in survivor interviewees spent far less time interviews. Language is a tool for reveal- talking about the difficulties of life inside Within the discipline of social anthropol- ing and concealing. In North Korea, words North Korea during the famine years, ogy is a willingness to use positionality in make and unmake the world. yet spoke at length about those they research. My approach involved position- faced in China. Greater portions of their ing myself as a geopolitical subject in the It is for the researcher to determine narrative, on a word-to-word , were research. This meant that I explained who whether the interviewee is credible. One devoted to the journey out. A researcher I am in terms of the inquiry. I let interview- question is whether it is possible for might assume such a tendency indi- ees know that I am an Irish citizen (be- the interviewee to know the issue. For cates that the experience of famine was cause I spoke in Korean they never asked instance, it would make little sense to ask less severe than that of being an illegal about my Canadian accent). I explained poor, orphaned young adult North Kore- person in China. Certainly life in China is that, like Korea, Ireland was colonized. an defectors about the nuclear program,

13 or what the leadership of North Korea most in the sample learned of a particular tion. The most private rooms remain aims to do with its nuclear program. matter. Reported speech will indicate the the heart and the mind. What kind of However, it would be highly insightful to degree of open, closed, or clandestine self-talk echoes in that solitary universe? hear such individuals reflect on what they communication in use in North Korea. As Kang Chol Hwan explained in his knew about the word nuclear in general For example, I asked interviewees how memoir, “A person dying of hunger will in North Korea. Did they hear discussion arrangements were made to meet at grab a rat and eat it without hesitation. of it in the black markets? Did they know illegal or dangerous places, such as black Yet as soon as he begins to regain his what it meant? These questions could markets. If you couldn’t talk about the strength, his dignity returns, and he inform the researcher about how portions black market, how did you let your friend think, I’m a human being. How could I of the North Korean community in their know to meet you there? “Oh, we’d say, have descended so low?” (2001, 142). understand, conceive, and reflect ‘I’ll see you at the Rodong Department upon nuclear-capable North Korea. Why Store. Because the Department Store was Humor and Wordplay is this valuable? Because it provides some useless. We couldn’t buy anything there. The idea of asking a North Korean measure of popular opinion. If ordinary They’d know we were talking about the about what kind of jokes or humor was North Koreans never hear discussion black market.” This example also links to common during the famine might seem of nuclear weapons, think nothing of word play humor. An additional aspect of ill-mannered. However, as I knew from the matter, and never reflect on it, then reported speech involves rumors or old the role it played in the lives of those such insights could indicate a topic for wives’ tales. Researchers may be inclined who survived the death camps of the information campaigns into North Korea. to dismiss both, but doing so would be a Holocaust, humor offered important A credible witness is competent to give mistake. Rumor may be unreliable but is insights. Many memoirs discuss how evidence and worthy of belief. often the currency used to make deci- humor shored up the spirit of victims in sions in information-poor environments. the Nazi camps and demonstrate how Rumors and their spread can signal the language changed under the harsh SIX TOOLS TO MAKE LANGUAGE severity of a situation. For example, the conditions of the camps. These linguistic A RESOURCE rumor that a fingertip was seen floating features of atrocity signaled an area of in will be more likely to spread in inquiry in the North Korean case. Expres- an environment where access to food is sions of humor and wordplay indicate At least six tools are especially valuable limited than where food access is plen- areas of communal agreement—how in qualitative interviews. They are useful tiful. Rather than determining whether else can they spread at an aggregate? in a range of topics of inquiry into North the rumor is true or false, a fatal error in They also delineate smaller pockets of Korea, or most sensitive topics of quali- research, the researcher should ask what unequal power within a community. For tative research. They can be used to gain such a rumor reveals about the context of instance, some types were more com- deeper information. its emergence. monly used by men than by women, in the market than at home. Some were Reported Speech Self-Talk reserved for certain occupations. A clas- Reported speech as a linguistic tool per- The idea to solicit self-talk from North sic from North Korea is that the secret tains to how information is gathered and Koreans came to me after reading about police eat secretly, the security police exchanged, corroborated or dismissed. how successful athletes use self-talk to eat securely, and the party workers eat It is useful for gaining an understanding encourage themselves to get through like they are having a party.1 This tells of how the interviewee recollects learn- difficulties. The decision to defect is the researcher about how inequality ing about a particular matter. Speech usually a difficult point of change in the was noticed, discussed, and critiqued in can be direct or indirect. Most is modu- life of North Koreans, often requiring the North. If the researcher is aware of lated, context specific, and changeable inner discussion or debate beforehand. common jokes in North Korea, she can according to interlocutor. The context of In Korean, the expression often mani- use these as a prompt for eliciting other North Korea should alert the researcher fested as conversation with the self “in jokes or wordplays. Middle-age North to a sensitivity on how spoken discourse the heart” or “in the mouth” rather than Korean women shared the example that is finessed in the North. How a North Ko- “in the head.” However, all solicitations women sometimes referred to men as rean learned of a matter is thus a critical for these expressions were understood “daytime lightbulbs.” What is the context point of discovery. Although Korean as as pertaining to nonpublic, private talk. of wordplay and jokes? From whom did a language can easily omit the subject, My questions took the following form: the interviewee first hear these? What reported speech is still identifiable in its How did you think about yourself, at could not be joked about? attachment to the quoted text. that time? How did you talk to yourself about X? These questions can access Dreams At aggregate, and on analysis, a collec- the inner world of the interviewee at Dreams may seem an unusual tool. In tion of interviews will demonstrate how the time of the matter under investiga- some cases, it can be insightful, in others,

1. 보위부는 보이지 않게 해 먹고, 안전부는 안전하게 해 먹고, 당 일꾼들은 당당하게 해 먹는다.

14 NKEF POLICY AND RESEARCH PAPER SERIES 2021 possibly inappropriate. In North Korea critical breaking point—or period—in their ON COGNITIVE BLOCKS tension is ongoing between the desires lived experience of North Korea. Was of the individual and the dictates of the there a moment when you realized X? state. Defectors invariably internalize and Was there a collection of experiences Our approach in an interview largely wrestle with this tension. Further, defec- which culminated in X? relates to the types of questions we ask tors—whether in South Korea, China, or and the types of language and narration a third country—are separated from their Cognitive Loading they elicit. However, the approach must first home and likely from family, friends, It is the right of the interviewee to with- be tempered with an awareness that and certainly their past. As is true for any hold and maintain privacy. This is reason- cognitive blocks will arise between the of us, the world of dreams can function able. However, it is sometimes suggested interviewer and the interviewee. What I as an antechamber to greater knowledge that North Koreans are lying, embellish- call cognitive blocking is when social sys- about desires, fears, and preoccupations. ing, or giving fake testimonies (Song tems (ours and theirs) are so entrenched Dreams can afford the dreamer a link to 2015). The concern is that North Koreans as to make alternative ways of being experiences and territories inaccessible in imagine that researchers are interested in difficult to imagine. the waking world. hearing about horrendous aspects of life in North Korea. This, though, is riddled, Reunification and Wealth The point here is not to take the role of circuitous thinking. Song assumes that The YouTube channel Asian Boss con- a psychoanalyst or dream interpreter, they assume that she (or we) assume they ducted an interview in 2018 with three but rather to evoke the world of dreams need to tell us horrific stories. This cogni- young North Korean women and asked as a way to incorporate more dimen- tive looping can be assuaged by avoiding them about reunification. Clearly random sions of the self of the interviewee. assumption altogether and interrogating personal views will not offer particular Reasonable questions what it means our assumptions. insight. I evoke this example simply to the interviewee and how they feel in because the framing of the question—its those dreams. Readers of my second During an interview, if the researcher inherent block—appears frequently in book will recall that it starts with my ask- becomes concerned about the reli- research with North Koreans. ing Jeong Kwang Il which Korea he is ability of a portion of the narrative, the in when he dreams. This question often technique of cognitive loading can be At the two-minute mark in the video the inspires interesting disclosures from used to determine whether decep- male interviewer asks, “Perhaps, when North Koreans. tion is part of the narrative structure. you lived in North Korea, did you ever This technique is recommended with think about reunification, did you ever Temporal Positionality caution because it is a standard tool think about how to resolve the reunifica- Temporal positionality is a simple tool in interrogation interviews (Vrij et al. tion problem?” The first woman answers, but often overlooked—to our peril. The 2009). The premise is that the truth is “We are one people, so yes I thought of present in an interviewee’s life can shape easier to remember than a story that is reunification. But how to bring it about, how she interprets her past and her past made up. Ask the interviewee for a por- I didn’t know. I just had the idea that we self in that context. Indeed, a defector tion of her narrative to be retold, using were one people with one mentality.” The may judge her past self as “ignorant” or reverse chronology. Prior to that, what second woman says, “Ever since I was “naïve” and endeavor to curate a past happened? And before that? This can young I always thought it was because of self for the interviewer. In such cases, it is be finessed by walking the interviewee the US and South Korea that we were not useful for the interviewer to acknowledge back through her story. This process reunifying.” The male interviewer asks, “Is the differences between past and present will be more challenging if the story is that what they said in the broadcasts? selves, even of the researcher. Normal- deceptive, however. Another technique That reunification couldn’t happen izing change in the self, the interviewer of cognitive loading is to have the because of the US and South Korea?” could elicit perspectives on how the inter- interviewee recall a portion of the story The second woman responds, “Yes, viewee understood the events of her past in greater detail than initially. Inconsis- they lead us to believe that North Korea at the time of the experience, acknowl- tencies in the narrative should be noted wants unification but cannot have it edging that those views might not still be but not evoked as rebuttal. Instead, the because of the US and South Korea.” the case. Maintaining a temporal frame at interviewee should be encouraged to At this point, the interview shifts focus set points in the interview, and signaling tell the story again. Repeated telling will slightly to how the women viewed these to the interviewee, will be useful in likely reveal deception, if it is present. A South Korea when they were living in clarifying that the past is being discussed final technique of cognitive loading is North Korea. This use of temporal rear- and examined by both interviewer and to ask for the narrative to be told while rangement is useful, but the interviewer interviewee. What did you think was engaged in a cognitively demanding misses a trick. He could have segued the main problem of North Korea then? task such as linking up the events in into questions about what the women Permit the answer to unfold, and then ask question with key historic details known thought reunification would look like how if at all that differs now, and why. to the vast majority of North Koreans. when they were back in North Korea. This leads to another concern in regard Instead, he moves ahead with questions Temporal positionality can also be useful to research with North Korean defec- about a reunified Korea that carry dan- for identifying, with the interviewee, a tors: cognitive blocking. gerous assumptions: that reunification

15 of the peninsula would bring about a wealthy peninsula.

The tendency for bias, particularly on the topic of reunification, is significant. For instance, the expression “Reunification would lead to a rich and prosperous Korean peninsula” is not uncommon.2 Within it is the assumption that reunifi- cation would be under the South Korean model of governance. This is implicit because North Korea’s governance is not wealth producing but instead wealth extracting. An interview that gathers the depth of these women’s epistemic ex- perience in the North would have asked different questions: Under what kind of system did you imagine reunification? Asian Boss, “Do North Koreans Want Reunification with South Korea” April 3, 2018, YouTube Was the Kim family governing all of the peninsula? How would South Korea be “Life was difficult. So, you wanted war “Thank you to Ms. Jeong Jin and absorbed into the North, or did you to break out with South Korea. Did you Mr. Jang Hae Sung. The testimony imagine the North to be absorbed into want to win the war with South Korea?” this afternoon is close to the essence the South? Such targeted inquires reach He answered, “Yes.” I clarified: “But of what we are seeking in the COI into the interviewees’ past to bring their the suffering you experienced in North [Commission of Inquiry], and that is frameworks for thinking into the present. Korea wasn’t from lack of resources, the state of the truth and how that Why is this useful? At least in this ex- but due to governance.” “We saw it is conceptualized in North Korea. ample here, concerning reunification, it this way: if we absorbed the South, we Now, Ms. Jeong, you were a trained reminds us that millions of people North would become wealthy.” newsreader. Did you sense that, not of the 38th parallel probably conceive of looking back from [49:00] this point, reunification differently than those in the In sum, qualitative interview techniques but then, that what you were read- South and in the rest of the world. The need to challenge the interviewer’s ing out was not quite what was the Asian Boss interview would have bene- assumptions. To wit, the interviewer likely reality? And how did you manage to fited from asking something other than a knows that a war between North and maintain the disconnects in yourself? yes or no question. For example, in what South Korea would likely see the South In your psyche? Between what you way do North Koreans want reunification winning. A question that goes against were required to read and what you with South Korea? the assumption would ask instead: Does knew were to be untruths? It would

North Korea want to win the war? How be interesting just to know the state War and Wealth would the North’s winning the war bring of mind.” Another example that illustrates the an end to suffering? restrictive frame of our cognitive bias Note that Darusman uses temporal - is an off-the-record meeting with North Knowing Truths sitioning to place the interviewee back Korean military defectors in 2019. The The third example is one of the public in North Korea to enquire about her topic turned to limited resources such hearings held in Seoul in 2013 for the ability to assess truth then and there. It as food within the military. “Sometimes United Commission of Inquiry into is set in distinction to how she views the we wanted war to break out with South Against Humanity in North Korea. North now with “not looking back . . . but Korea,” one of the former soldiers said, Two individuals from North Korea’s media then” to access how she understood and “so that it would put an end to our suf- industry have been sharing their experi- conceptualized truth in the North at that fering.” The vast majority of people who ences in tandem. As the lengthy testimony time. Ms. Jeong Jin Hwa answers: read that sentence will likely make a winds down, the floor is opened to all critical assumption: the speaker wanted three commissioners for general follow-on “Well, everyone that works in the war to break out with South Korea so questions. Commissioner Darusman asks press, in the media, the way they that the North would then be absorbed an open question related to truths and think, the way they act, they just think by the South. Absorbed by the South, untruths (emphasis added throughout).3 that, we simply just think that. . . . we comfort would ensue. I probed further.

2. This sentence can be said in either Korea, and its logic and legitimacy will be upheld by that Korea. This alone should alert the reader to something incoherent in the claim as it is imagined on either side of the DMZ. If both North and South Korea claim that reunification will bring wealth to the entire peninsula then one side’s reunification is the other’s occupation. 3. The time stamps indicate the location in the audio file (seehttp://webtv.un.org/search/commission-of-inquiry-on-human-rights-in-the-dprk-seoul-public-hearing-day-3-pm-22-au - gust/2668611253001).

16 NKEF POLICY AND RESEARCH PAPER SERIES 2021 have been taught, we just knew that Natural questions arise: What is being tive block it brings up. Once the question we had to follow everything that Kim misunderstood? Who is misunderstand- to Jang is elaborated, he clarifies: Il sung or Kim Jong Il said. So the only ing whom? Is the misunderstanding truth in [50:00] North Korea is what is due to communication itself, how truth “[1:21:00] Not really, it’s not up to said and what is told by Kim Il Sung is understood for example? Or is the you to quit a job. You have to have a and Kim Jong Il. If Kim Il Sung or Kim misunderstanding rather ours (us out- good reason, a good excuse. If I was Jong Il said something is white, even siders) in how we imagine the space of working as a reporter, if I wanted to if it is black, we have to accept it as North Korea to be conceptualized? Thus quit, then I had to give excuses, I had the truth, as white. So the announc- I repeat, Jeong Jin Hwa tells us that truth to give reasons. I can’t just leave my ers in North Korea, we were simply is susceptible to change, to reversal, to job because I want to. So once you a conduit, a conveyer, a messenger undoing, because it is made and unmade have a job, you can’t just quit be- of the or the messages of by Kim. In this phrasing, Jeong Jin Hwa cause you want to.” Kim Il sung and Kim Jong Il . . . so [an linguistically creates a space where Com- announcer is] one of the people with missioner Darusman, and the audience, The cognitive block is resolved when the highest loyalty to Kim Il Sung and are welcomed into the framework of Biserko’s question—“You don’t expect Kim Jong Il. So even if what we read “unknowing” that is the essence of North at all any disobedience within the was not the truth, we were more than Korea itself. To wit, just as Jeong Jin Hwa structures?”—meets with Mr. Jang’s prepared to say it was the truth.” did not know what was white or black, answer—“No, no disobedience, no until Kim says so, we likewise are cut off resistance. That’s just unimaginable.” Darusman is seeking an answer to from knowing. We are instead brought Through this we learn that the impulse whether truth or its opposite are possibly into a cognitive frame where we learn that to leave a job is not imaginable in North knowable in North Korea. The answer “truth” is an empty signifier determined Korea. The initial question on whether he gets from Jeong Jin Hwa is that the by the Kims. It is not the work of the a person could leave a job, quietly, for role of announcers, or anyone in North announcer to know, but merely to convey reasons of disagreement was useful Korea, is not to determine or know truth. what is known by Kim. For announcers, for its ability to reveal the cognitive Announcers in North Korea are voice truth telling or knowing is not part of the block that provided further detail about amplifiers for the words of the Kims. The job. Recall how Jeong Jin Hwa began her the context of life decisions inside conduit transmits, it conveys, it does answer: “Well, everyone that works in the North Korea. not trouble with the content conveyed. press, in the media, the way they think, the Jeong Jin Hwa tells us that truth is un- way they act, they just think that, we simply fixed, susceptible to change and reversal just think that. . . we have been taught, we ON REFLECTION: A CONCLUSION because it is made and unmade. It is just knew that we had to follow everything not the work of the announcer to know that Kim Il-sung or Kim Jong Il said.” whether something is black or white; Methodologies and tools can be instead her job is to know that she must Choice transformative in the right hands yet merely convey that black or white is what During the same panel of public hear- destructive in others. It should go Kim has determined. Recall her saying ings, Jang Hae Sung, a former North without saying that researchers need to that “even if what we read was not the Korean journalist, is asked a question engage their subjects with dignity and truth” it becomes truth in the telling so about employment and changing jobs by respect, regardless of what information long as Kim first says so. Commissioner Sonja Biserko. “Once you they share, or who they are or may have realized that the ideology was really been in North Korea. It cannot be me- Yet Darusman seeks further clarifica- a big lie, would you be able to leave your chanical, at least where sensitive, emo- tion by asking, “But you knew that was jobs without, for example, coming [out] tional topics are concerned. If mechan- not the truth, did you?” Here the ex- publicly that you disagree, just leave the ical, the interviewees will likely sense it. change reaches clarity and confusion jobs because you disagree, without pun- What beats at the heart of the research? synchronously. The question carries an ishment?” Here a cognitive block appears. A genuine desire to understand the col- assumptive answer imbedded, and in Jang Hae Sung does not understand the lective experiences of others? To work light of this, her response is neverthe- question. It is incomprehensible. “What in the service of our fellows? Research less unexpected: “I don’t think I knew.” exactly do you mean?” Biserko elaborates: must be shaped by rigor and reflection Here the temporal frame has dropped: “Could you leave your positions without both. The frames of knowledge and ap- she has dropped it. She does not say “I openly saying that you disagree? Would proach presented here, along with the didn’t know” but rather “I don’t think I you be punished? Would they ask for the suggested tools, have worked for me in knew.” Darusman is trying to get at how, explanations?” This is an intriguing line qualitative research with North Koreans as he phrased it earlier, she managed of questioning. It could be that Biserko as we collectively probe North Korea. to “maintain the disconnects in herself” knows that leaving a job in North Korea Working with North Korean defectors, and in her “psyche” and in a roundabout is not something about choice or desire but also in analysis of North Korea’s own way we have achieved the answer: the or aspiration, but instead about political materials on video, these disconnect was so great that she cannot lineage (). Nevertheless, the techniques frequently bring clarity and even reconnect with it now. question proves insightful for the cogni- accuracy to analysis. 

17 REFERENCES

Asian Boss. 2018. “Do North Koreans Want Reunification with South Kang, Chol-Hwan, with Pierre Rigoulot. 2001. The Aquariums of Korea?” YouTube, April 3. https://www.youtube.com/watch?v=kvGbI- Pyongyang: Ten Years in a North Korean Gulag, translated by Yair Reiner. WxBeR0&ab_channel=AsianBoss. New York: Basic Books.

Crasnow, Sharon. 2014. “Feminist Standpoint Theory.” In Philosophy Manne, Kate. 2018. Down Girl: The Logic of Misogyny. New York: of Social Science: A New Introduction, edited by Nancy Cartwright, Crown/Penguin. Eleonora Montuschi. Oxford: . Sen, Amartya. 1981. and Famines: An Essay on Entitlement and Devereux, Stephen. 2001. “Sen’s Entitlement Approach: Critiques and Deprivation. Oxford: Clarendon Press. Counter Critiques.” Oxford Development Studies 29, no. 3: 243–63. Song, Jiyoung. 2015. “Unreliable Witness: The Challenge of Sepa- Edkins, Jenny. 2000. Whose Hunger?: Concepts of Famine, Practices of rating Truth from Fiction When It Comes to North Korea.” Policy Forum Aid. Minneapolis: University of Minnesota Press. (Asia and The Pacific Policy Society blog), August 3.https://www. policyforum.net/unreliable-witnesses. Fahy, Sandra. 2015. Marching Through Suffering: Loss and Survival in North Korea. New York: Columbia University Press. Vrij, Aldert, Ronald Fisher, Samantha Mann, and Sharon Leal. 2009. “Increasing Cognitive Load in Interviews to Detect Deceit.” In Interna- ———. 2019. Dying for Rights: Putting North Korea’s Human Rights Abuses tional Developments in Investigative Interviewing, edited by Tom William- on the Record. New York: Columbia University Press. son, Becky Milne, and Stephen Savage. Uffculme, UK: Willan Publishing.

Fricker, Miranda. 2007. Epistemic Injustice: Power and the Ethnics of Knowing. Oxford: Oxford University Press.

18 NKEF POLICY AND RESEARCH PAPER SERIES 2021 SANDRASTEPHAN FAHY HAGGARD AND LIUYA ZHANG Researching a Hard Target: Analyzing North Korea with Official Economic Data1

ABSTRACT not only the growing dependence of ic data to study the Democratic People’s North Korea and the shocks Republic of Korea (DPRK or North Ko- related to sanctions and COVID, but also rea). Defining “official” economic data in This paper reviews the growing use of efforts to circumvent these constraints by this setting is complicated, however, by official statistics to draw inferences about participating in new global production the fact that the regime treats a variety of the North Korean economy given that networks, among other efforts. Discussion statistics as state secrets (Noland 2000; the North Korean regime generally treats of the limits on such official data includes Eberstadt 2007). Because the country economic and social data as state secrets. a possible decline in the integrity of Chi- is not subject to any effective oversight Although it releases some questionable nese customs statistics and that errors in in regard to data production—as, for budget data and has collaborated with the data are not necessarily constant over example, members of the International the UN system in a few areas, such as time, making it difficult to assess trends. Monetary Fund (IMF) or World Bank and health, most “official are—the data it does generate are rightly statistics” are from trading partners or treated with skepticism. Doubts are international organizations. We divide INTRODUCTION compounded by strategic incentives to this data into two broad categories— dissemble. At any given moment, it may trade and humanitarian aid—and look at be in the regime’s interest to underesti- through recent developments drawing This paper reviews some of the benefits mate or overestimate a given economic on data of both sorts. The data underline and disabilities of using official econom- parameter. An example of the former

1. Our thanks to Nicholas Eberstadt, Rudiger Frank, and Benjamin Silberstein for comments and data and to Becky Christofferson for research assistance.

19 would be low-balling food production to Program. Of particular significance is the common style of analysis is to look at secure foreign assistance or understating long-standing work of the World Food time series economic data to see wheth- trade to demonstrate the adverse effects Program and FAO, which have published er changes in the series can be correlat- of sanctions. An example of the latter highly detailed crop assessments, and the ed, even if loosely, with political or policy would be touting domestic production Office for the Coordination of Humanitar- developments either inside North Korea associated with government campaigns ian Affairs, which provides useful over- or outside it. We pay particular attention and targets. views of UN activities and the underlying to developments that constitute con- donors to them. These agencies have also straints on the regime or—conversely— Given these constraints, we take a broad generated a very different type of data: suggest its capacity to adjust. We focus view of purportedly official data. We con- surveys—primarily on food consumption, on series covering two periods: from sider efforts to use official North Korean health, and nutrition—administered jointly 2000 to the present, in effect, from the government data, such as in regard to by the North Korean government and UN onset of the prolonged nuclear crisis that the budget and agriculture. Some data agencies. This data has been crucial in began in 2002 and 2003; and from 2010 that rest at least partly on such official estimating—but not measuring precise- to the present, showing developments statistics—including earlier iterations of ly—the extent of humanitarian distress in during the Kim Jong Un era, which be- the well-known Bank of Korea series on the country with respect to food security, in December 2011. and economic nutrition, and access to , sani- growth—are in fact only estimates, and tation, and water. What are the risks of using such data? not even derived in a particularly trans- In general, we can assume that statis- parent manner. What is excluded by identifying official tics from multilateral institutions and data narrowly—as that produced by advanced industrial states are largely The bulk of our focus is therefore on North Korea, its trading partners, and the accurate or susceptible to acceptable official data from sources outside North UN agencies? We exclude rich sources error. For example, we have little reason Korea, and thus of necessity dealing of data generated by surveys of infor- to doubt South Korean data on trade largely with the foreign sector. We divide mants collected by scholars, journalists, and aid with North Korea. Survey data this data into two broad types. The first is or NGOs. One example is the well- collected as a result of collaborative mirror statistics, which are collected from known series on prices and black projects between the North Korean North Korea’s trading partners to analyze market exchange rate maintained by Da- government and UN agencies should North Korea’s trade. In developing ilyNK and the array of surveys of North also be seen as broadly reliable, though mirror statistics, one uses the bilateral Korean refugees (Haggard and Noland some geographical of the coun- exports (imports) of a partner country 2011). We also do not address in detail try may be omitted from coverage. as an estimate of North Korea’s imports data from official sources that we believe (exports) from that partner. The analysis are little more than informed guesses, We cannot be so sure, however, about of North Korea’s trade permits some such as that on foreign direct investment data from other sources—including inferences about the extent of opening, maintained by UNCTAD (2020), or from China, Russia, and —where silences the direction of trade and even structural prominent think tanks that estimate are also nontrivial. The bottom line is change in the North Korean economy. In based on their sleuthing, such as the that with a country such as North Korea, addition to permitting estimates of total Stockholm International Peace Research no single source of data is likely to be trade, these techniques can also be used Institute (SIPRI) data on arms trade dispositive and official sources need to analyze key relationships, most notably (2020). We underscore the importance be supplemented with all of the correc- those with South Korea (Republic of Ko- of interesting new work being done by tives accessible. rea, ROK) and China. Aid data from the organizations that are exploiting oth- advanced industrial state donors bears a er sources of official data than those certain resemblance to mirror statistics, mentioned here, including on maritime TRADE DATA: UNDERSTANDING in that they show at least one type of and air transport and corporate records, NORTH KOREA’S FOREIGN financial flow to the country. but those sources are addressed for the ECONOMIC RELATIONS most part in other papers for this project. The second external source of data is the multilateral institutions. Because What can be done with this official data To our knowledge, only one effort has North Korea is not a member of the IMF, and what are the risks? In other settings, been made to estimate a complete, World Bank, or Asian Development Bank, the purpose of such data would be internally consistent series on North Ko- these sources are primarily limited to causal inference: to estimate the effect rea’s balance of payments that includes the six UN agencies with a presence in of one variable, such as sanctions, on both the current and capital account the country: the World Food Program, another, such as trade (Haggard and No- (Haggard and Noland 2017). Such the World Health Organization, UNICEF, land 2017, 96–104). Yet the constraints efforts are rare for good reason—heroic the Food and Agricultural Organiza- on the ability to do such modeling are assumptions with respect to a number tion (FAO), the UN Fund for Population fairly clear, and much use of this data of variables. How do we estimate North Activities, and—largely in a coordinating has been descriptive or involved mixed Korea’s illicit activities or remittances? role—the Development methods approaches to inference. A What about capital flows or reserves?

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0 Confidence intervals around such esti- mates are bound to be large. Figure 1: North Korea’s Observed Merchandise Trade 1990-2019

Most efforts in this vein thus begin with 7000 what can be captured by mirror statistics US $MILLIONS from North Korea’s trading partners. The 5250 fine points of using such data are not insignificant; discussions are extensive about how the IMF’s Direction of Trade 3500 and the UN Comtrade databases are prone to error, and that the data histor- 100% ically provided by the Korea Trade-In- 1750 vestment Promotion Agency (KOTRA) 75% and now available in its annual review of 0 North Korea’s trade is more reliable (see ‘90 ‘92 ‘94 ‘96 ‘98 ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 Kim 2017, 161–73). For our estimates of 50% n Exports n Imports North Korea’s global trade, we rely on Ko- rea Statistical Information Service (KOSIS), which in turn relies on the Korea Trade-In- Source:25% Korea Statistical Information Service. vestment Promotion Agency’s (KOTRA) annual report on North Korea. We also 0% look at other South Korean government Figure 2: North Korea’s Aggregate Trade Shares with Five Parties sources that can assumed to be reliable and Rest of the World 1996-2019 and Chinese customs data, which likely involve some omissions, though we think 100% they should not be exaggerated.

Aggregate Trade and Its Direction 75% We start in figure 1 with North Korea’s observed merchandise trade from 1990 50% through 2019, estimates that exclude any service transactions, which could be significant. A 10 percent cost, insurance, 25% and freight on board adjustment is applied to values reported from partner 2 0% countries. Inter-Korean trade designat- ‘96 ‘98 ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 ed as noncommercial by the Ministry of n United States n Japan n Russia n South Korea n China n ROW Unification is excluded. Typically, such data can be used to measure trade openness: total trade as a share of gross Source: Korea Statistical Information Service. national product (GDP). As we discuss in more detail, however, we lack mean- country. The descent into the mid-1990s China—trade starts to take off. Several ingful estimates of North Korean GDP. famine is reflected in the decline of both hypotheses have been floated about More accurately, we are hesitant about observable exports and imports in the this apparent opening, including shifts the ones we have. Nonetheless, this first half of the decade. But North Korea in Chinese policy that send signals of broadest of trade series can be taken as does not adjust even once the famine greater openness to economic engage- a rough proxy of the openness has subsided: the decline in total trade ment (see Reilly 2014a, 2014b, 2014c) of the North Korean economy, particular- continues thereafter, reaching a nadir in and the rise of global commodity prices ly during periods when trade appears to 1999 at about 40 percent of 1990 values. (Haggard and Noland 2017). From be growing very much faster than likely mid-2006 forward, North Korea was GDP growth. The series tracks fairly well Starting around 2000—and resulting subject to a succession of ever-tight- with the known economic history of the in part from a rapprochement with ening multilateral sanctions contained

2. Because mirror statistics look at trade data from the perspective of foreign partners, they do not capture earnings from or payments to North Korea. North Korea’s imports, or a partner country’s exports, are usually recorded on a freight on board (FOB) basis, but to import such merchandise, North Korean importers are paying the cost, insurance, and freight (CIF) charges of transporting the commodities to the DPRK. Similarly, when looking at North Korea’s exports, we should convert it into an FOB basis, because that is what North Korea actually earns. A conventional way to per- form CIF to FOB conversion is to either divide or multiply CIF or FOB by 1.1. We have followed that convention here (Eberstadt 2014), though the accuracy of these estimates will vary by shipping costs and thus probably by proximity. 3. UNSCR 1695 of July 2006; UNSCR 1718 of October 2006; UNSCR 1874 of June 2009 and UNSCR 2094 of February 2013

21 100%

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0% map with sanctions: the closing of the Kaesong Industrial Complex in 2016 and Figure 3: North Korea’s Exports Shares with Five Parties and Rest of a gradual shift in the Chinese approach the World 1996-2019 to sanctions starting in the same year are 100% clearly consequential. Yet, as we argue, we cannot be assured that the contrac- tion is as sharp as it looks if North Korea 75% is shifting toward other foreign exchange generating activities unrelated to the 50% path of its merchandise trade. 500 Another interesting finding from 25% this simple series is that North Korea 375 manages to maintain a current account deficit with the rest of the world, and 0% ‘96 ‘98 ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 that deficit even widens during the 250 rapid trade growth between 2000 n United States n Japan n Russia n South Korea n China n ROW and 2015. Some analysts focus on the 125 question of how this deficit is financed Source: Korea Statistical Information Service. (for a review, see Haggard and Noland 2017). The options are limited—and by 0 no means mutually exclusive—and each would require a full paper to explore in Figure 4: China-DPRK Trade 2002-July 2020 (monthly) its own right. The important point is that no meaningful data pertains to any of 500 the contending hypotheses. US $MILLIONS First, the deficit could be made up in 375 part by invisible or service transactions, from labor remittances to other services 250 such as provision of shipping. It could be financed by foreign direct investment or other capital flows; the only related 125 series we have, however, UNCTAD’s guesstimates, shows that net FDI peaks in 2012 and declines to approximately 0 Jan. ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 July ‘20 zero in 2017 and 2018 before turning up slightly in 2019. Third, it could be n China’s total imports from DPRK n China’s total exports to DPRK financed by aid, or effective aid in the form of arrears to Chinese companies. Source: China’s Customs statistics (2017–2020), EPS China Data (2012–2016). Finally, it might be that the regime is Note: China’s trade data with North Korea from September to November 2009 was categorized as “Asia, financing these deficits by running down not otherwise specified” and January to February data in 2020 was aggregated into the February data. reserves, presumably held abroad in banks in jurisdictions willing to flout UN in a succession of UN Security Council on financial flows in later resolutions financial sanctions.4 resolutions.3 Whether these sanctions was similarly tied to WMD and weap- had any effect on observed trade is ons-related activities and did not in Trade data can be used to capture not uncertain; trade growth could have principle affect the financing of com- only the extent of trade but also its geo- been higher still in their absence. They mercial trade. graphical diversification and—converse- were initially defined relatively narrowly, ly—changing patterns of North Korean though, around WMD-related materiel, By 2015, total trade was more substantial dependence. Figure 2 shows data on major weapons systems, and a weak- than at any point in the 1990s and 2000s. North Korea’s total trade with the so- ly-enforced ban on luxury good exports That, however, proved to be a peak called Five Parties—China, Russia, South to the country. The gradual introduction and total trade began to contract quite Korea, Japan, and the United States—as of complementary multilateral sanctions rapidly. This contraction does at least well as with the rest of the world; note

4. A number of analysts—notably William Brown (2018b)—have focused in on the macroeconomics of the deficit and in particular the question of the exchange rate. A second strand of related work has looked at how trade data may be correlated with the market price data we have from DailyNK (see, for example, Silberstein 2019, 2020b). Both topics are crucial but take us beyond our focus here.

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750 that these are trade shares and thus cap- ture the relative significance of the coun- tries in question. Data of this sort can be Figure0 5: North Korea’s Trade Deficit with China 2002-2019 read through both economic and political lenses: Where are there natural comple- 3000 mentarities? How has North Korean trade US $MILLIONS been shaped by political alignments? 2250 It is striking that in 2000, DPRK trade was quite diversified: China, South Korea, 1500 and Japan each accounted for about 20 percent of North Korea’s trade and the rest of the world made up much of 750 the difference. That the United States accounts for little of North Korea’s trade 0 is hardly surprising. More noteworthy ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 is the limited economic role that Russia n Trade Deficit plays. As Eberstadt, Rubin, and Tretyako- va (1995) show in an early use of mirror statistics, North Korea’s trade with the Source: China’s Customs statistics (2017–2020), EPS China Data (2012–2016). Soviet Union and then Russia collapsed between 1989 and 1993 and never really recovered. This outcome cannot be laid at the doorstep of politics; it may reflect Figure 6: North Korea’s Oil Imports from China 2002-July 2020 a simple lack of natural complementar- (monthly) ities and the limited ability for Russia 40 to play a significant economic role in US $MILLIONS regard to North Korea. 30 The most interesting developments over time are seen in the South Korean, Chi- 20 nese, and rest-of-the-world shares. South Korea’s commercial trade with North Korea has depended heavily on politics 10 in the South. South Korea’s trade share grew during the Kim Dae Jung and Roh 0 Moo Hyun eras, but then flattened and ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 July ‘20 even declined during the presidency of n Lee Myung Bak before turning up under Petroleum oils (2710) Park Geun Hye as a result of the Kaesong Industrial Complex coming fully online. Source: China’s Customs statistics (2017–2020), EPS China Data (2012–2016). But sanctions clearly play a role and North-South trade ultimately falls to vir- exports between 2017 and 2019 (figure counting for about 95 percent of it in tually zero as a result of the combination 3). The three top rest of the world export 2019. This finding clearly casts doubt of sanctions imposed after the sinking destinations in 2018 were , , on claims that has no leverage of the Cheonan in 2010 and the ultimate and , and in 2019, , vis-à-vis Pyongyang. Figure 4 provides closure of Kaesong in 2016. Bangladesh, and Pakistan. Clearly, this a broader look at China-DPRK over the increase reflects an effort to diversify by entire nuclear crisis period, demonstrat- The steady decline in trade with the rest focusing exports on lower-income coun- ing the more or less steady increase of the world likely reflects a combination tries where North Korea’s technologi- in trade from 2002 to 2014 before it of general hesitance about dealing with cal disadvantages are offset by a high plateaus and then falls, particularly pre- the country after the onset of the nuclear degree of price competitiveness. ciptously on the import side. As figure 5 crisis, the sheer difficulties of doing makes more clear, however, the fall-off business in the , and multilater- Nonetheless, the major storyline from in trade did not affect North Korean - al sanction commitments. However, if figures 2 and 3 is both clear and well ports and exports equally: exports were we repeat this exercise on direction of known. Particularly during the Kim Jong constrained by sanctions, imports from trade focusing not on North Korea’s total Un era, China has come to occupy a China continued and as a result Beijing trade but instead on exports, we see a dominant position in North Korea’s incurred a steadily increasing current sharp uptick of roughly 15 percent in total observed merchandise trade—ac- account deficit.

23 and smuggling; the official data here wildly underestimates total trade. Food Figure 7: North Korea’s Imports from China 2002-July data may be less sensitive to this prob- 2020 (monthly) lem, but some patterns are distinctive. 30 It appears that China engineered large US $MILLIONS food exports right around the succes- sion in late 2011 and early 2012. It also 22.5 appears that China has been responsive to the recurrence of distress in 2018 and 15 2019 and into 2020 as well although it is far from clear that these imports were enough to fully offset losses. 7.5 If the Chinese data is accurate in at least suggesting a major external shock to 0 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 July ‘20 North Korea starting in 2017, data on commodity composition can be used n Rice (1006) n Wheat or meslin flour (1101) to provide insight into how the country is responding to that shock. One way of Source: China’s Customs statistics (2017–2020), EPS China Data (2012–2016). doing so is to look at data at the sectoral level and at significant shifts. Figure 8 shows the import share of a number of major commodity groupings at the Figure 8: Shares of North Korea’s Main Import Products 2011-2019 two-digit Harmonized System Codes (HS Codes) level: mineral fuels, mineral 30% oils and products of their distillation, nuclear reactors, boilers, machinery and mechanical appliances (in fact, a product 22.5% category not limited to or even reflective of nuclear-related trade), and machinery 15% and electrical machinery and equipment. All have been declining over time, par- ticularly after the announcement of new 7.5% rounds of UN sanctions (UNSCR 2371, 2375, 2397) in 2017, which capped imports of crude oil, natural gas, and 0% ‘11 ‘12 ‘‘13 14 ‘15 ‘16 ‘17 ‘18 ‘19 refined petroleum and banned all ma- chinery, metals, and vehicle (HS 72-89) n 27 Mineral fuels/mineral oils n 15 Animal or fats and oils imports. In contrast, the import share of n 54 Artificial fibers n 87 Vehicles and parts other than n 91 Clocks and watches and parts railway or tramway rolling-stock plastics, man-made filament, and clocks n 85 Electrical machinery and n 84 Nuclear reactors, boilers, and watches has been increasing over equipments and parts machinery and mechanical time, and now accounts for around 20 n 39 Plastics appliances; parts thereof percent of North Korea’s total imports.

Figure 9 repeats this exercise on the Source: Korea Statistical Information Service. export side looking at the export share of mineral fuels, mineral oils, and dis- Trade data can not only be used as a not simply through aggregate trade but tilled products; articles of apparel and guide to total trade and its direction through key commodities, including oil, clothing accessories; and fish and crusta- but also be interrogated with respect to which is subject to complex sanctions ceans, all of which declined sharply after commodity composition and even pric- caps, and food. Figure 6 looks at the UN sanctions fully banned the exports es. Many projects are possible here; we first question, figure 7 at the second. of textile, seafood, and coal in 2016 and touch on only a few as examples of how At least in the official data, it appears 2017. In contrast, the exports share of North Korea seeks to break out of exist- that Chinese exports of oil products to export-processing and manufacturing ing constraints (for more examples, see the DPRK have fallen dramatically with products, such as clocks and watches, Haggard and Noland 2017, chapter 2). sanctions. Yet this is also precisely the feathers and down, artificial flowers, period when a succession of UN Panel of medical or surgical instruments, foot- One question is whether China has Experts reports, and other intelligence wear, toys, games, and sports accesso- been indirectly supporting the regime has focused in on ship-to-ship oil transfer ries all increased sharply after 2017.

24 NKEF POLICY AND RESEARCH PAPER SERIES 2021 A consideration of this data suggests both a kind of resilience on the part of North Korea and how China facili- Figure 9: Shares of North Korea’s Main Export Products 2011-2019 tates the country’s survival. Putting the export and import sides together, we 50% see a decline in traditional industries and particularly in sanctioned products, 37.5% but the simultaneous emergence of new international production networks between China and North Korea in light, 25% labor-intensive manufacturing that is not subject to sanction. 12.5% This finding can be reinforced by looking at the import products with highest 0% growth rates in 2019 (figure 10). These ‘11 ‘12 ‘‘13 14 ‘15 ‘16 ‘17 ‘18 ‘19 include plastics, clocks and watches, n 91 Clocks and watches and parts n 67 Prepared feathers; artificial man-made filaments, and tobacco n 90 Precision instruments flowers; products. The plastics and man-made fil- n 03 Seafood n 95 Toys, games and sports aments imports have been mostly trend- n 72 and steel requisites ing upward, even before 2011. Clocks n 27 Mineral fuels/oil n 26 Ores, slag and ash and watches are a new industry that n 62 Apparel n 64 Footwear shot up after 2017. Figure 11 repeats the exercise on the North Korean export Source: Korea Statistical Information Service. side. The graph shows the exports of clocks and watches, feathers and down, artificial flowers, medical or surgical in- struments, footwear, and toys and games Figure 10: North Korea Import Products with Fastest Growth Rates and sports requisites that have all surged 2011-2019 after 2017. 300 A closer look at China-North Korea trade US $MILLIONS at still finer sub-categories of clock and 225 watch parts further underscores China’s indispensable role in North Korea’s emerging assembly industry. As figures 150 12 and 13 show, North Korea clearly imports clock and watch parts from Chi- na, and then exports assembled clocks 75 or watches back to China. In 2019, the exports of clock and watches accounted 0 for about 23 percent of North Korea’s ‘11 ‘12 ‘‘13 14 ‘15 ‘16 ‘17 ‘18 ‘19 recorded merchandise exports to China n 10 Cereals n 39 Plastics and articles thereof (KOTRA 2019). Equally interesting, these n 54 Man-made filaments n 91 Clocks and watches and parts exports to China constituted only 20 n 24 Tobacco and manufactured thereof percent of total exports of these goods, tobacco substitutes. suggesting that North Korea is in fact becoming a platform for exports to other Source: Korea Statistical Information Service. markets as well.

In sum, it appears that the UN sanctions crisis forced North Korea to begin a pro- filaments, and parts of clock and watch- after 2017 not only struck its traditional cess of restructuring to focus on other es—with exports making corresponding mining and heavy industry exports to export-processing activities that could gains. In 2019, for example, plastics and China but also affected North Korea’s evade sanctions. The economy became man-made filaments imports accounted emergent apparel and seafood indus- more dependent on imported inputs for 16 percent of North Korea imports tries. The externally induced economic in these sectors—plastics, man-made from China. The exports of clock and

5. North Korean Foreign Trade Trends (년도 북한 대외무역 동향), 2019, KOTRA자료 20-187

25 statistics, no meetings in 2016 and 2017 followed by thirty-six meetings in 2018. Figure 11: North Korea Export Products with Fastest Growth Rates 2011-2019 Here we focus again primarily on the 50 economic relationship, which is neatly US $MILLIONS summarized in figure 14. South Korea breaks down its trade with the North 37 into somewhat unusual categories. We sum general trade and processing on 25 commission trade because these come closest to what we would think of as purely commercial interactions; a first 12 point to make is that though this trade plays an important role in the origins of North-South trade, which actually date 0 ‘11 ‘12 ‘‘13 14 ‘15 ‘16 ‘17 ‘18 ‘19 to Roh Tae Woo’s , commer- cial trade is subsequently overshad- n 91 Clocks and watches and parts n 90 Precision instruments owed by two other categories: trade n 67 Articles of feathers; artificial n 95 Toys, games and sports flowers and wigs equipments associated with economic cooperation n 64 Footwear projects—most notably the Kaesong Industrial Complex—and noncommer- cial trade, which is dominated by food Source: Korea Statistical Information Service. and fuel exports. Nominally financed by loans with the North, it was widely rec- ognized even at the time that this trade Figure 12: North Korea’s Exports to China: Article 91 was likely to be unrequited. “Clocks and Watches” The Sunshine Policy under Kim Dae 60 Jung and Roh Moo Hyun saw the rapid US $MILLIONS rise in noncommercial trade that came to dominate total trade through 2004. 45 The Lee Myung Bak administration subsequently pulled back from the 30 open-ended support offered under the center-left governments and that support never revived, even under 15 Moon Jae In. The collapse of more purely commercial trade from 2010 is a result of the so-called May 24 sanctions 0 2017 2018 2019 following the sinking of the Cheonan. n 9113 Watch straps/ bands/bracelets n 9108 Watch assembled Despite these sanctions, Lee Myung Bak and Park Geun Hye did permit the continuation of the most important of Source: China Customs Statistics. the economic cooperation projects: the Kaesong Industrial Complex (KIC). After watches and parts increased to take up no exchanges but also inter-Korean traffic a tourist was killed at Mt. Kumgang less than 23 percent of North Korea’s ex- (cross-border travelers, vehicles, vessels, in 2008, however, North-South trade ports to China and products of prepared aircraft, and railroad cars) and detailed was solely KIC trade, which centered feathers and for nearly 15 percent. 5 information on refugees (reported on on light-labor manufacturing based based on age group, professional back- on imported South Korean inputs. Trade and Aid with South Korea ground, gender, academic background, The shuttering of the KIC ushered in a South Korea keeps extensive records on of birth, region, and current set- period of extremely limited North-South its economic, policy, and social interac- tlement status, and economic activities). economic exchanges that has contin- tions with North Korea. In addition to a The MOU also maintains statistics on ued into the Moon Jae In era. detailed breakdown of trade and aid, the the number of inter-Korean meetings, (MOU) also main- broken out into those regarding politics, Finally, data on the Inter-Korean Co- tains statistics that have been a mainstay military, economy, humanitarian issues, operation Fund, which tells a broadly of the analysis of North-South relations. and society and culture. The summit era similar story (and with even more These data include not only economic is particularly visible in the last of these granular detail than shown in figure 15),

26 NKEF POLICY AND RESEARCH PAPER SERIES 2021 warrants mention. The fund is financed through a particular tax contribution Figure 13: North Korea’s Imports from China: Article 91: and has continued to grow. Deposits “Clocks and Watches” from the Public Capital Management Fund account for the largest share of 80 the fund sources, followed by govern- US $MILLIONS ment and nongovernment contribu- tions and then operating profits. Actual 60 expenditures were concentrated in the Sunshine years and in the last decade 40 much has actually gone to activities and groups in the South. Nonetheless, the fund is a potential instrument for 20 the government were a breakthrough of some sort to be reached. 0 2017 2018 2019 n 9114 Other clock or watch parts n Other sub-categories HUMANITARIAN AND AID DATA: THE ROLE OF THE IFIS Source: China Customs Statistics.

UN agencies in North Korea generated additional information on the country. Three quite different types of data Figure 14: South Korea Exports to North Korea 1990-2019 from these sources might rightly be considered official. The first deals with 1,400 aid, and because—like mirror statistics— US $MILLION (NOMINAL) it comes from donor countries can be 1,050 considered reliable. The second cov- ers selective data sharing and some collaborative data generation projects. 700 Assessing the veracity of this data is more difficult because of North Korean motivations: the regime shares data 350 selectively and typically when it has some instrumental reason to do so. 0 One likely source of bias in any survey ‘90 ‘92 ‘94 ‘96 ‘98 ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 data is that the government may not n Total Exports (This value is n Economic Cooperation (Mt. appreciate the importance of random- identical with General trade+ POC Geumgang tourism, KIC, other/ ization and appears to prohibit access Trade + Non-Commercial) light industry cooperation) to certain parts of the country. Given n General Trade + Processing on n Noncommercial Trade (Govt and this important qualification, the data Commission Trade civilian aid/social and cultural appears to come from North Korean cooperation, LWR, heavy oil, etc.) civil servants and their counterparts in the UN and NGO communities. Source: Ministry of Unification.

Third, the OCHA complex of insti- tutions also reports on the extent of The substantive findings from this data Aid Data the humanitarian challenges in the are easily stated. First is evidence of aid A number of countries sustain aid country, typically summed up by the fatigue: a declining willingness to extend programs to North Korea and some number of vulnerable individuals or support to the country. Second, the over- studies of these efforts have been households. At one level, this data all humanitarian assessments of North undertaken, based on official statis- might be dismissed given that it is Korea do appear to have an empirical tics, including from the United States really nothing more than informed es- foundation. The country has not man- (Manyin and Nikin 2014) and timate. On the other hand, it is actually aged to resolve long-standing issues (Alexandrova 2019). A significant share quite informative because it provides in its agricultural sector, whatever role of all aid to North Korea—beyond that insight into planning by these institu- natural shocks might have played, and extended by South Korea and China6— tions—what they believe the extent of large swaths of the country’s population passes through UN agencies. humanitarian need actually is. remain highly vulnerable as a result.

27 credible data for aid from the UN system and from the advanced industrial states Figure 15: Inter-Korean Cooperation Fund (IKCF), 1991-2019 that appear to be reliable reporters, including both aid they channel through 14 the UN system that takes place bilateral- US $BILLIONS ly. Moreover, the dataset can be used to 11 track not only actual commitments, but also overall estimates of need, whether appeals are funded, and who precisely is 7 contributing to them.

Figure 16 tracks reported aid flows since 4 2000, when North Korea first shows up on the FTS website. North Korea first opened itself to humanitarian assistance 0 ‘91 ‘93 ‘95 ‘97 ‘99 ‘01 ‘03 ‘05 ‘07 ‘09 ‘11 ‘13 ‘15 ‘17 ‘19 in the middle of the of the mid-1990s. Aid-seeking subsequently be- n Cumulative Fund Size n Yearly Fund Size Addition came a significant aspect of the country’s n Yearly Aid Expenditures n Cumulative Aid Expenditures foreign economic relations and indeed of its grand strategy. How much aid to Source: Ministry of Unification. supply and in what form also became an ongoing quandary for donors: What should be given to a regime that fails to address the most basic human security Figure 16: Humanitarian Aid by Source 2000-2020 of its population? Outside donors have generally been reluctant to provide hard 400 currency to the regime because of fears HUMANITARIAN AID, IN MILLIONS USD of diversion. The bulk of reported aid has thus come in the form of in-kind contri- 300 butions of food and other humanitarian goods; this was true of South Korea as 200 well. Nonetheless, money is fungible, and as Haggard and Noland (2007) show in Famine in North Korea, as aid increased 100 following the famine, commercial imports of food actually declined.

0 ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 ‘20 Aid peaked at over $350 million in 2001 and 2002—well after the famine had sub- n n Multilateral and UN Agencies NGOs (including Red Cross) sided—but several trends since that time n Bilateral n Total are noteworthy. The first is the obvious decline by the mid-2000s. North Korea Source: OCHA Financial Tracking Service. has certainly not experienced a human- itarian crisis on the order of magnitude of the famine since then, but it has seen Each year, the UN Office for the Coordina- data is the Financial Tracking Service recurrent food deficits, most notably tion of Humanitarian Affairs (OCHA) issues (FTS) maintained by OCHA. The FTS is between 2010 and 2013 (when aid does a document titled DPR Korea Needs and a centralized source of data emanating increase) and again between 2018 and Priorities. As noted, these reports are use- ultimately from government donors, 2019 (when that increase is much more ful both for actual data they report and for UN-administered funds, UN agencies, modest). It is possible that aid fatigue is the estimates they outline of humanitarian and NGOs. A major FTS shortcoming is related to the onset of the nuclear crisis. need, to which we return in more detail. that China does not report its bilateral assistance, and other bilateral donors The hypothesis that reluctance to For tracking actual aid, however, a may also not submit information to it. provide extended humanitarian sup- particularly important source of official Nonetheless, the FTS does provide port is increasing is suggested by three

6. The one dataset that is seeking to collate Chinese aid data in a way that is useful for researchers specifically warns users away from their North Korean data: “Our dataset uncovered 20 projects to North Korea totaling $272.65 million (including pledges), but we have reason to believe that this is a substantial underestimate of total Chinese official financing to North Korea” (AIDDATA, https://www.aiddata.org/pages/how-to-use-global-chinese-official-finance-data)

28 NKEF POLICY AND RESEARCH PAPER SERIES 2021 noteworthy trends in the data. First, NGO parts. Two particular efforts in this regard tural system. Total use outstrips domestic support fell steadily in the first half of the bear noting. The first involves the highly supply by 1.5 million metric tons (MT), 2000s. Second, reported bilateral assis- detailed WFP-WHO crop assessments, but “anticipated commercial imports” are tance—again mostly from the advanced which provide important insights into estimated at only 200,000 MT and aid at industrial states—followed suit, declining the rural sector (WFP-FAO 2014; FAO 21,000 MT. The uncovered deficit: 1.36 from 2007 or 2008 forward. By 2010, just 2015; WFP-FAO 2019; see also Korea million MT, more than 35 percent of total before the Kim Jong Un era, bilateral aid Rural Economic Institute). These have domestic supply. from these sources had dried up. been used—sometimes in conjunction with weather and satellite data (Dinville A second source in this basket of collabo- Finally, this reticence is also visible in the 2017)—to track, estimate, and predict rative data exercises are a series of health data on the so-called combined appeals. crop yields (for example, Ireson 2013). and nutrition surveys; the latest of these These outline a broad array of needs More important, they have also been appeared in 2012 (DPRK 2012) and 2018 but are funded overwhelmingly by used by a number of scholars to esti- (UNICEF 2018). These surveys pose two commitments from member countries. mate overall food balances and possible problems. First, they are not regular and Combined appeals were issued only shortfalls (Haggard and Noland 2007; thus can chart trends only in a choppy once between 2005 and 2010, but we Haggard, Noland and Weeks 2008; way. Second, outside agencies and do- compared the extent to which they were Ireson 2013; Silberstein 2015; Haggard nors have faced challenges in regard to fulfilled between 1996 and 2004 with the and Noland 2017, chapter 4; Silberstein geographic access to particular regions period from 2011 to 2019, measured as 2020). This can be done by aggregating of the country. That said, if we take into the ratio of contributions from member total sources of supply—production, food account the second limitation in particu- states to the stated need. In the first aid, and commercial imports—and com- lar—that surveys may not be fully repre- period, appeals secured 68.8 percent paring those against various estimates of sentative—they nonetheless do appear of financing, in the second only 35.3 human need, ranging from an absolute to provide useful insights into health and percent, despite the fact that those re- consumption minimum to those that particularly nutrition in the country. quests were also falling. We also tracked would take account of inevitable losses the number of countries contributing and other uses, particularly animal feed In summing the findings of the data on to UN efforts through OCHA. Between and seed use. In addition, these assess- the rural sector and health and nutrition, 2000 and 2010, an average of seventeen ments often included survey data on it is worth restating the obvious: that countries contributed; between 2010 households, including rations from the whether we think the data is fully accu- and 2020, an average of twelve had.7 Public Distribution System, market pric- rate, North Korea remains a poor country es, and even survey data on household with a highly vulnerable population. The Much more complementary research consumption and coping mechanisms, core findings of OCHA’s most recent would be required to confirm the prop- such as the share of households con- DPR Korea Needs and Priorities (2020) osition that North Korea’s aid-seeking suming less preferred or reducing bear restating and reflect the organiza- strategy has met with greater resistance; the number of . tion’s operational priors: we would ideally control for level of • In a population of approximately need. But North Korea’s turn to Chi- These exemplary reports also point to twenty-five million, 10.4 have na for support is visible not only with the deeper data problems with respect been designated as vulnerable respect to trade but on the aid front as to North Korea, given that in-country “people in need.” well. Moreover, we know from studies of visits were suspended from 2014 to major players including Korea and the 2019. Yet the richness of potential data is • Around 10.1 million people—40 United States (Manyin and Nitikin 2014) on display in the 2019 report (WFP-FAO percent of the country—are food and Europe (Alexandrova 2019) that aid 2019)—when North Korea was experi- insecure. fatigue has set in, that donors—includ- encing shortfalls—and would merit an One-third of children age six to ing both governments and NGOS—are extended treatment on its own. Among • twenty-three months do not re- increasingly reluctant to extend human- other things, this “rapid food security ceive a minimum acceptable diet. itarian assistance to North Korea in an assessment” includes data on national open-ended, long-term way. harvested area, fuel and supply, • According to the 2019 Joint Mon- yields and production. itoring Program report, about 8.4 Data Sharing and Collaborative million people, some 33 percent Data Generation Yet for assessing external constraints on of the population, do not have UN agencies have also managed to North Korea, the most interesting por- access to safely managed water secure selective data sharing efforts and tion of the report focused on food crop sources, that number rising to 50 even collaborative data generation ac- supply-demand balance. The data go to percent in rural areas. tivities with their North Korean counter- the core of North Korea’s failed agricul-

7. One result of this decline in support is that a greater share of multilateral funding comes out of the Central Emergency Response Fund, a limited pool of resources that the UN Office for Coordina- tion of Humanitarian Affairs can use if their appeals to country donors fall short (https://cerf.un.org/search/node?keys=DPRK). Given underlying resource constraints, however, the CERF cannot fully substitute for shortfalls in the combined appeals.

29 But Frank goes further, arguing that the budget data can be used as a proxy Figure 17: Official Annual Growth Rates of the North Korean State for aggregate output or growth. The Budget, 2000-2020 (%) state-owned sector is still the largest 18 component of the North Korean econ- 16 omy and about four-fifths of all reve- 14 nue is derived from transactions taxes and profits of state-owned enterprises. 12 The significant military economy and 10 the emergent private sector are not 8 captured by these numbers. But Frank 6 makes an important institutional point: the budget does not only include the 4 SOE sector but captures revenue from 2 the quasi-private markets as well, for 0 ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 ‘20 example licenses and stall fees. Critics emphasize uncertainty about n Achieved Revenue n Planned Revenue n Planned Expenditure what is in the data and the complexi- ties surrounding the fact that it shows Source: Frank 2020. nominal and not real growth; we do not know much about , which • Approximately 8.7 million What all analysts of North Korea would could vary year to year and thus affect people are in need in regard like to know more than anything else is the real growth rate. Nonetheless, to delivery of basic health care, the aggregate size of the North Korean Frank argues that it can be seen as a the problems ranging from economy and how rapidly it is growing. reasonable aggregate measure of the inadequate availability of basic For a number of years, Rudiger Frank nominal growth of total output. medicines, diagnostic capabili- (2018, 2019, 2020) has reported on the ties, equipment for critical and SPA meetings that generate the bud- We are more skeptical. First, the early emergency intervention, and get data, looking at the budget reports 2000s are not generally believed to be inconsistent supply of power and both as a signal of policy trends but a particularly good time for the North water at health-care facilities. also treating growth in the budgets as Korean economy, but this data shows a rough proxy for GDP growth; a time it growing quite dramatically if we take series from his most recent report in this the data as a proxy. The somewhat NORTH KOREAN DATA vein is reproduced in figure 17. Initially chaotic period of reform just prior to reported in local currency, the figures the onset of the second nuclear crisis are now reported only as annual growth in 2002 and 2003 generated very large We have focused so far on official data rates. As shown in the figure, the data increases in the budget before growth generated outside North Korea: by are broken into three series: planned was brought to heel between 2006 and trading partners and by international revenue and expenditure—essentially 2008. This, though, could well have organizations (if working with North goals—and achieved revenue, which reflected the effects of the very limited Korean officials, as we have seen). What lags by a year.8 price liberalization of the reform era. about data generated either by the Second, during the run-up to the suc- North Korean government or that rests What can these data tell us?9 Frank makes cession, budgets increased at steadily in whole or part on information gener- two points about the numbers. The first increasing rates through 2012, since ated by North Korean data? Because is that although we really do not have a which time budgets have been largely some confusion is likely, it is worth very good sense of what either revenues flat. But it was the early Kim Jong Un being precise about definitions. Aside or expenditures are, the changes in them era—not the late Kim Jong Il period—that from the joint projects undertaken with over time contain at least some informa- was supposed to relax constraints on the noted international organizations, tion. As he puts it, “if we assume that the growth and in which impressionistic ev- or data shared with them (such as about error margin—resulting from deliberate idence suggested a modest upturn. Fi- crops), North Korea releases only two adjustment of the numbers and/or dif- nally, if North Korea were growing at the types of “official” data: annual budget fering accounting standards—is relatively rates suggested here, its performance data and the periodic national census- stable over time, a comparative analysis over the entire period would in fact es, the last two of which took place in of this kind of data can provide clues on be quite robust. This means that some 1993 and 2008. development trends” (2019). downward adjustment from budget

8. As Frank (2019) points out “higher growth rates for expenditure over revenue are not a sign of deliberate deficit spending since the figures for actual, or ‘achieved’ revenue are usually higher than planned and thus lead to a more balanced budget and occasionally even a small surplus, at least according to the official figures.” 9. Our thanks to Rudiger Frank for his comments on the data.

30 NKEF POLICY AND RESEARCH PAPER SERIES 2021 growth to GDP growth is required, but CONCLUSION we compared the rank order of the by how much? It is impossible to tell. DPRK’s export partners in the IMF Di- rection of Trade database for 2018 with So, what can we say from official statis- Academic work has strict standards the data reported by the more tightly tics about the size of the North Korean for data use, which start with concerns curated Korea Statistics/KOTRA data in a economy and its growth performance? about validity and reliability. How much recent year. We found large movements Our view is that the answer is “almost random error is acceptable? What—if likely to reflect the most obvious of er- nothing.” Since 1990, the Bank of Ko- anything—can we do about bias or error rors: conflating North and South Korea. rea has estimated North Korean GDP that takes a consistent direction or form, For one, North Korea appeared to export using data on the volume of output, particularly when magnitudes—food more to Ukraine in 2018 than China did. multiplied by South Korean prices for production shortfalls, for example—are These errors, though, are relatively easy the same goods, and from this derived consequential? Dealing with black boxes to correct, and Korea Statistics/KOTRA a nominal—again not real—growth rate. like North Korea pose these problems seeks to do so. However, it is important to underscore in spades, and it is tempting to throw up that the data on the volume of goods our hands and say that none of the data When we move beyond the advanced and services produced by the North we have is of much use. This would be industrial states, however, problems are themselves not taken from official a mistake for two reasons. First, we have with reliability increase. The issues with North Korean sources (at least, after no choice but to try to make sense of the KOTRA data lie in the first instance in its the late 1980s when a number of data we do have. Second, a purist ap- narrower coverage of reporting coun- official series ceased), but rather are proach is misleading about the extent of tries, seventy-one countries as of 2012 estimated from satellite data and oth- error. In fact, some of the data we have to 124 in the IMF database. The reasons er sources of intelligence collection; are likely to be both valid and reliable. for these omissions are laudable: KOTRA the underlying estimates provided to We start with observations about how we takes a more conservative approach the Bank of Korea come from none can assess data from different sources. toward data collection and it discards other than South Korea’s National In- We then speak briefly about some of the unverifiable data, which in most cases telligence Service. The Bank of Korea things we have been able to infer from emanates from developing countries but estimates have been subject to recur- extant data. We close by arguing for a includes rogue regimes such as Iran and rent criticisms that need not detain multimethod approach: that we should that clearly have some economic us here (Kim et. al. 2007; Noland 2001, 2014, 2015, 2016, 2017; Kim 2017, We close by arguing for a multimethod approach: that we 70–83; Brown 2020). But two recurrent should not rely on any given source of data on its own, but problems are worth instead should combine it with sustained conjectures—in noting. First, even if we had good series effect theories of the case—and triangulation with multiple on agricultural and sources that go far beyond official ones. industrial output, we only have consis- tent data on prices for rice and the exchange rate, and not rely on any given source of data on ties with North Korea. The result is that that only from relatively recently and its own, but instead should combine the role of developing countries in North via informants. Second, it is difficult it with sustained conjectures—in effect Korea’s total trade could well be under- to assess the role of markets and of theories of the case—and triangulation estimated (Marumoto 2009; Lee 2014; the service sector more generally. with multiple sources that go far beyond see also figure 3 notes). A second prob- Recently, for example, Byung-Yeon official ones. lem is that KOTRA data on South Korea’s Kim (2019) notes that growth rates in aid to North Korea may also mislead the early Kim Jong Un years may have Let’s start with a loose hierarchy of somewhat despite the overall reliability been significantly underestimated—by likely reliability and validity. Data from of South Korean trade data. Humani- as much as one percentage point— advanced industrial states and the UN tarian food shipments were valued not by not taking into account market family about their own activities is likely at prevailing international cereal prices activities. Despite the heroic efforts to to be highly reliable. These entities are but instead at the often much higher generate such estimates, we have little constrained by strong data-production prices in the ROK’s protected domestic confidence that we are likely to get norms and typically do not have obvious agricultural markets. Moreover, some anything meaningful, and that it may reasons to misrepresent what they are quasi-official financial transfers to the be time to turn to altogether different doing. However, even these organiza- regime may not show up at all: witness sources, such as tracking night lights tions may be prone to unmotivated error, the secret payments by the Kim Dae through satellite data. or less politely, mistakes. For example, Jung government to secure the historic

31 ed $500 million in unreported crude oil exports in 2014 or 2015 (Haggard Figure 18: China Exports to North Korea in EPS China Data and 2016). Although we suspect that the KOSIS (2009-2019) product-level data we have used here is 5000 useful for understanding current shifts in US $ MILLIONS North Korean participation in new global production networks, we cannot rule 3750 out at some later period that such data would be seen as controversial and then 2500 misstated as a result.

One additional issue has not gotten the 1250 attention it deserves: China Customs sta- tistics exclude trade through Kong, despite the fact that the city appears to 0 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 play a considerable role as re-exporter of goods originating from and headed n Annual data EPS n Monthly data EPS n Annual data KOSIS toward the . Moreover, there ap- pear to be tax reasons why trade is routed Source: Authors’ tabulation. in this way, suggesting an important chan- nel for DPRK-China trade that tends to be ignored (Schindler and Beckett 2005).

Figure 19: China Imports from North Korea in EPS China Data and With all of these qualifications, how- KOSIS (2009-2019) ever, the problems with Chinese data 3000 may not be in the merchandise trade US $ MILLIONS data itself; rather they lie in the fact that other sources of support for North 2250 Korea are not reported except indirectly. The current account deficit suggests at 1500 least the possibility of aid, financing or other current account income. The large volume of illicit exports of coal and sand 750 and the acquisition of virtual currencies via cyberattacks disclosed by the UN Panel of Experts report in 2020 provide 0 exemplary clues. Through ship-to-ship ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 ‘20 transfers, self-propelled barges and n Annual data EPS n Planned Revenue n Planned Expenditure direct deliveries by foreign-flagged vessels, North Korea appears to have Source: Authors’ tabulation. exported at least 540,000 tons of coal in three observed months in 2019 and June 15, 2000 summit in Pyongyang—a problems could be larger. Some studies one million tons of sand in 2019, as well sum whose exact total is still a matter of have pointed out non-negligible data as $120 million in revenues from fishing dispute and needless to say has never discrepancies across UN and KITA data- rights transferred in 2018. These do been reflected in official ROK figures on bases at the product level, which could not show up in Chinese trade statistics its relations with the North. be due to reliance on different data because they constitute service transac- providers, different product classification tions in the case of fishing, but because What about other official sources of methods or simply human errors (Lee they circumvent Chinese Customs alto- consequence that may not be subject 2013). More troubling, we have clear his- gether in the case of illicit coal and other to the same reporting norms as those of torical evidence that China has obfuscat- mineral imports. the advanced industrial states? The most ed politically sensitive data. For instance, important case in this regard is China. In after North Korea’s second nuclear What about the data generated by the the Appendix we compare the Chinese on , 2009, and the subsequent UN organizations, either as a result of customs data with the KOTRA/Korea UNSCR 1874, the China Customs Bureau selective data sharing or particularly by Statistics data on Chinese exports and subsumed bilateral trade from August the handful of highly detailed surveys imports and note the possibility of some to November into the category “Other conducted jointly by the organizations? underestimation of Chinese exports to Asia, Not Elsewhere Specified” (Buckley These efforts might also be motivated— North Korea starting in 2014. But the 2009). Another example is an estimat- they are conducted because North Ko-

32 NKEF POLICY AND RESEARCH PAPER SERIES 2021 rea has an interest in a particu- capital flows are not captured ellite imagery, to other sources of official lar picture—or reflect another sort of bias. in this data. North Korea could records such as those tapped by the An ongoing problem faced by donors well be receiving foreign direct outstanding work of the Center for Ad- was the unwillingness of North Korea to investment from China, and we vanced Defense Studies (C4ADS) (Kuo grant access to certain parts of the coun- know that it certainly has in the and Arterburn 2019; Arterburn 2018; try, either for security reasons or because past, such as in the mining sector. 2017; Thompson 2017), they did not want to reveal particular Although those investments have to surveys of companies and refugees—is outcomes. Surveys must pay attention to probably ceased, other areas—in- de rigueur. what is said about the representativeness cluding real estate and manufac- of samples. But as noted, we are inclined turing—are large blind spots in to believe that these efforts probably do reported data. APPENDIX: A NOTE ON CHINESE reflect reasonable approximations to the TRADE STATISTICS • Official statistics can provide facts on the ground. The problem is that evidence on North Korean efforts they are not regularized. to adjust to external shocks. Of Figures 18 and 19 compare monthly particular interest in the recent Finally, the national budget data proba- data and annual data on EPS China Data period are efforts to diversify bly do contain some information to the collected directly from China Customs trade away from China by court- extent we believe that what is reported is and the KOTRA/KOSIS data. They are ing other markets and to develop reported consistently, but we are doubt- nearly identical for imports over the pe- new industries, particularly light, ful that it can be treated as a proxy for riod but starting in 2014 KOSIS/KOTRA labor-intensive manufacturing. economic growth. data suggests that Chinese exports to • The international community, North Korea may be underestimated but In conclusion, what has all of this official including South Korea, has tired the reasons are not clear. KOTRA notes data been able to tell us? Here, we - of providing open-ended support that the methods of collecting North ply tick off those we think are the most for the country. Aid appears to Korea trade statistics since 2014 were substantively significant. have fallen from all sources for changed to reflect information both from which we have credible informa- Chinese customs and from specialized • North Korea did witness a de fac- tion. It would take more extended global trade statistical sources but it did to opening and growth of trade discussion to decide if this is not specify what these organizations are starting in 2000 and extending the result of shifting need, but or what corrections were made. None- into the mid-2000s. Yet despite if we think North Korea is in fact theless, it is worth noting the discrepan- Kim Jong Un’s image as a reform- constrained by external devel- cy as it could be motivated.  er, it appears that North Korea’s opments, then need should have efforts in this regard stalled out increased not decreased. under his leadership. This could be due in part to adverse external • Not surprisingly, the official data developments such as the de- we have provide little insight into cline in commodity prices, the on- the extent of illicit activity. set of a more vigorous sanctions The data on agricultural produc- regime and the COVID crisis. • tion and health and nutrition that The data, though, suggest that is available suggest ongoing the problems emerged before humanitarian concerns: an inabil- Chinese sanctions were tightened ity to overcome long-standing and thus reflect ongoing disabil- problems of productivity in the ities the country faces from its agricultural sector or to reduce choice to pursue nuclear weap- basic distress. ons and the ongoing difficulty in doing business with the country. It is important to close by stating the • That said, the data on the coun- obvious. Given the bounded nature of try’s current account deficit and official statistics from important partner related research on the stability countries and the opaque nature of of prices and the black market North Korean data itself, relying solely on exchange rate suggest that official statistics is a fool’s errand. Data merchandise trade is not the only analysis on North Korea—no matter how source of foreign exchange for careful—bears a closer resemblance to the country. It is clear that addi- financial forensics than standard polit- tional current account income as ical economy analysis. Supplementing well as unrequited transfers—aid accounts based on these sorts of data or arrears—as well as possible with a variety of other sources—from sat-

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36 NKEF POLICY AND RESEARCH PAPER SERIES 2021 JENNY TOWN The Uses and Challenges of Satellite Imagery in Researching North Korea

ABSTRACT isolation. Instead, the imagery needs to review and debate, as well as a window be paired other sources of data that help into areas of North Korea where there is situate it in the appropriate context of generally no visibility. The use of commercial satellite imagery . Moreover, North Korea’s ability has become a common practice when to adapt to a highly monitored environ- assessing developments in North Korea. ment also emphasizes the constant need INTRODUCTION Given limited access to the country, to factor in the potential for camouflage, especially its more politically or militarily concealment, and deception practices sensitive areas, imagery has provid- when viewing any image. Failing to take Commercial satellite imagery is an ed an important and, in some cases, these factors into consideration can important source of data about North the only look at facilities that help the lead to misleading or over-extrapolated Korea, providing windows into a country international community gain a better conclusions. Because images increase where access is limited even under the understanding of what is happening on the persuasive power of the analysis, best of circumstances. When combined the ground. However, although satellite and news and social media cycles are with other data sources, it can help imagery is increasingly used to research unrelenting, the burden is heavy on enhance understanding of current and and monitor North Korea, caveats about researchers to do their due diligence, long-term developments on the ground. how much can be learned from it alone consider the ethical implications of their are significant. Limits to imagery resolu- work, and conduct responsible analysis. This paper reviews both the growing tion and frequency of viewing can create Despite these limitations, satellite im- use of satellite imagery in studies about distorted narratives if considered in agery provides a source of hard data to North Korea and the numerous ways

37 it is facilitating data-driven analysis. It also difficult to determine the true value Understanding the common features of discusses the challenges of working of an image to one’s goals in advance. North Korea’s marketplaces, for instance, with satellite imagery and the need for which are characterized by a cluster of careful, conscientious analysis to provide As satellite technologies have advanced long, narrow, -roofed, single-story responsible and meaningful contribu- and the industry has expanded, satellite buildings, has led to a number of studies tions to the field. imagery has become more accessible to about how marketplaces have developed the general public with the emergence throughout the country since the famine of free or lower cost options, although era.5 The consistency in structure and BACKGROUND many of these options are of lower dimensions of similar buildings across resolution. Additionally, as public inter- the country, paired with pictures from est in North Korea has grown, satellite inside the one or more of the markets, Although high-resolution commercial companies have responded accordingly, helps researchers estimate the approxi- satellite imagery has been available to collecting imagery of key sites in North mate number of vendor stalls within each the public since 1999, its usage in North Korea at more frequent intervals, making market complex. Combined with informa- Korea studies did not gain wide traction efforts to broaden the areas of the coun- tion about how much it costs a vendor to until around 2012.1 Prior to that, stud- try captured, and pushing more imagery rent a market stall, the assessment of how ies that featured satellite imagery were into their public catalogs. many markets exist around the country limited, mainly focused on sites central to and approximately how many stalls are North Korea’s nuclear program such as contained in those markets form a basis the Yongbyon Nuclear Scientific Research THE LANDSCAPE OF for estimating the “taxes” or “rents” the Center and Punggye-ri Nuclear Test Site. SATELLITE IMAGERY STUDIES regime may earn from market activity. OF NORTH KOREA Because North Korea does not publish The limited usage was due in part to the hard numbers about its economic per- limited availability of imagery posted to formance, satellite imagery can provide public catalogs as well as the prohibitive Several types of satellite imagery are unique insights into an otherwise opaque cost of licensing this imagery on a reg- available to the general public, providing aspect of the country’s economy. ular basis. Satellite imagery companies researchers with a wide range of working collect enormous quantities of images, options.3 For a country like North Korea, WMD but not all of it is pushed into their public where access is limited especially to more One of the most prominent ways satellite catalogs. The decision may be based sensitive areas for either political or securi- imagery has been used in North Korea on technical or political considerations, ty reasons, satellite imagery has provided studies is to monitor activities and de- or simply corporate preferences and ways around those restrictions. Research- velopments at facilities associated with priorities, but the choice of what is made ers have used various types of satellite North Korea’s weapons of mass destruc- public is at the companies’ discretion.2 imagery in a variety of ways to increase tion (WMD) programs. Despite the limits understanding of North . to what can be learned from only aerial Moreover, the cost associated with licens- views, imagery has helped improve ing commercial satellite imagery is not North Korea at a Glance understanding of how Pyongyang’s insignificant. Pricing is based on various First, satellite imagery can be useful in nuclear weapons programs have devel- criteria such as area size, acquisition defining larger-scale features of North oped over time based on infrastructure date, resolution, and format. For optical Korean sites of interest. Characterizing and activity in and around these sites. imagery, even a minimum order of 25 these general features can help improve Assessing activity around key sites pro- square kilometers can range in price from understanding of the country’s geospa- vides indicators as to what parts of the $600 to 700 to upward $1,500 per image tial layout and development, making it program are active or suspended and depending on a combination of these easier to identify undeveloped versus when expansions or modifications are factors. Synthetic-aperture radar (SAR) urban areas, sharp differences in ele- made to related infrastructure, indicating imagery can run $5,000 to 10,000 per vations such as mountains and valleys, program priorities and practices. image. In many cases, only low-resolution shallow areas along the seacoasts, and previews of the imagery are provided to sites such as airports, ports, bridges, At the Yongbyon Nuclear Scientific Re- the customer before purchase, making it railways and stations, and more.4 search Center, for instance, understand-

1. At least 1-meter resolution or better one. 2. Technical reasons could be a variety of factors such as problems with resolution or excess cloud cover. In the Korean context, for instance, the summer season is an especially diffi- cult time to acquire cloud-free optical imagery. 3. Some of the more common types that have been used in studies about North Korea include optical imagery, images that capture the optical part of the spectrum and are displayed in either natural color, as viewed by human eyes, or in false-color infrared, which aid the detection of features not visible otherwise, such as vegetation health. Thermal images depict the distribution of temperature. SAR images are created using radio waves rather than utilizing light from the sun. This is especially useful for capturing images at night and imaging through clouds and smoke. Nighttime optical imagery detects lighting on the ground, such as from cities and towns. 4. Matthew G. McKinzie and Thomas B. Cochran, “Conducting Research on North Korea using Commercial Satellite Imagery, Map and Other Geographic Data,” paper presented to the 54th Pugwash Conference on Science and World Affairs, October 4-9, 2004. https://fas.org/nuke/cochran/nuc_04100401a_238.pdf 5. See, for instance, Benjamin Katzeff Silberstein, “Growth and Geography of Markets in North Korea: New Evidence from Satellite Imagery,” US-Korea Institute at the Johns Hopkins School of Advanced International Studies, October 2015. https://www.jstor.org/stable/pdf/resrep11150.1.pdf; and Collins, “The Markets: Private Economy and in North Korea?” Beyond Parallel, August 26, 2018. https://beyondparallel.csis.org/markets-private-economy-capitalism-north-korea/

38 NKEF POLICY AND RESEARCH PAPER SERIES 2021 ing when and how long the 5 MWe Imagery can also be useful as a veri- imagery to characterize the common reactor may have been operating is an fication tool when facilities are not in physical features of prison camps as well important factor when estimating how use. For instance, after the exploding as monitor activity over time.7 In this North Korea’s fissile material stocks may of test tunnel entrances and support context, imagery can help show patterns have evolved over time. When trying to infrastructure at the Punggye-ri Nuclear of life to see whether the camps are still assess the status of the reactor, a few Test Site in May 2018, questions loomed active; whether and when facilities within visual indicators are sought. These in- as to whether North Korea would try to the complex are renovated, expanded, clude steam emitting from the building reactivate the facility, especially given that or closed; or even evidence of forced housing the reactor’s steam turbines imagery showed the Command Center labor at mines located within the secure and electric generators, which indicates for the complex remained intact. Monitor- grounds. Such imagery-based studies that the reactor is likely either nearing ing of this site since then has revealed no can provide documentary evidence in at- or in operation.6 It is also common to efforts to re-excavate the tunnel entrances tempts to hold the government account- see effluent expelled from the second- or rebuild the support buildings and able for violations of international human ary cooling system’s discharge pipeline infrastructure, despite what appears to be rights laws and norms. when the reactor is running, though this is not the only time this indicator would Because US and international experts and officials are be observed. Water rarely granted access to North Korea’s WMD related facil- discharge could also signal that the North ities, especially without some kind of nuclear agreement Koreans were testing in place, satellite imagery is one of the only open source the cooling loop, per- forming maintenance ways to gain insights into the country’s ongoing WMD on the cooling system, program developments. or simply attempting to deceive for political reasons. Trained imag- ery analysts therefore look for a combi- continued patrolling and maintenance of Remote sensing data is also com- nation of indicators when trying to make the area. Without access to the test site to monly used to monitor such things as these kinds of determinations. verify its dismantlement, satellite imagery agricultural production in efforts to provides a way to at least monitor for at- assess North Korea’s human securi- Although imagery is useful in trying to tempts to restore its previous capabilities. ty. In a country where malnutrition is monitor and assess the operations of persistent and domestic food produc- key facilities, the kinds of conclusions Because US and international experts tion is critical to the well-being of the that can be drawn based on imagery and officials are rarely granted access people, understanding how weather, alone are subject to caveat. For in- to North Korea’s WMD related facilities, such as floods or drought, affects crop stance, gaps in commercially available especially without some kind of nuclear health and potential harvestability is coverage are often large, making it agreement in place, satellite imagery is essential. One such report in 2017 used difficult to assess the consistency of one of the only open source ways to gain satellite imagery to assess the effects activity over time. In the case of the 5 insights into the country’s ongoing WMD of droughts on that year’s harvests. It MWe reactor, signatures such as steam program developments. compared the normalized difference generation and warm water discharge vegetation index measurements, based indicate that the reactor was probably Human Rights and Human Security on thermal imagery, with comparable running the day the image was cap- Satellite imagery can be extremely useful periods in the previous years, assuming tured. Without frequent coverage, how- in efforts to monitor and assess develop- similar crop management practices ever, determining whether the reactor ments in North Korea related to human were followed in both periods with ran constantly or only intermittently is rights and human security. For instance, regard to growing season conditions.8 difficult. It also does not convey the lev- when it comes to North Korea’s political A similar study in 2020 by Crop Monitor el of reactor operations—at full or partial prison camps, the Committee for Human (a GEOGLAM initiative), looked at the capacity. These factors of operation Rights in North Korea has published a impact of the summer on pri- consistency and output level would sub- series of reports that combine North mary rice producing areas, identifying stantially affect production estimates. Korean defector testimony and satellite which agricultural areas experienced

6. See, for instance, “Nick Hansen and Jeffrey Lewis, “North Korea Restarting Its 5 MW Reactor,” 38 North, September 11, 2013. https://www.38north.org/2013/09/yongbyon091113. Before the cooling tower was demolished in 2008, steam emissions from the cooling tower were another indicator of reactor operations. 7. See the Committee on Human Rights in North Korea’s publications listing for a full list of reports on North Korea’s prison camps and political prisoner system (https://www.hrnk.org/publications/ hrnk-publications.php). 8. Andy Dinville, “Assessing Agricultural Conditions in North Korea: A Satellite Imagery Case Study,” 38 North, January 5, 2017, https://www.38north.org/2017/01/adinville010517/.

39 the worst flooding effects and how that rean media, water supply to these plants Security Council Resolutions 2371 and would likely impact harvests.9 fed through a complex series of large 2397 as well as under corresponding reservoirs and vast integrated system of Chinese laws.13 According to the report’s These kinds of studies of North Korea’s waterway tunnels.11 coauthor Jaeyoon Park, senior data agricultural situation help better as- scientist at Global Fishing Watch, the sess the country’s humanitarian needs. In addition to domestic economic activity, fleet engaged was roughly one-third the Data-driven analysis like this is important satellite imagery is now commonly used size of China’s entire distant water fishing when access to the country’s critical to help identify North Korea’s illegal and fleet, calling this the “largest known case areas is limited or nonexistent and trust sanctions-violating activities. For instance, of illegal fishing perpetrated by vessels in the government’s official reporting of a recent innovative study in Science originating from one country operating the situation is minimal. Advances used various kinds of satellite in another nation’s waters.” 14 imagery to assess the scale of illegal fish- Economic Infrastructure ing by “dark fleets”—vessels that do not The range of studies included in this article and Activities publicly broadcast their location or ap- are only a small sampling of the broad and Satellite imagery is also useful in looking pear on public monitoring systems—oper- diverse ways in which satellite imagery for regional and nationwide develop- ating in North Korean waters.12 The study has helped piece together a greater understanding of what is happening in North Korea. From Satellite imagery is also useful in looking for regional and monitoring of large construction projects, nationwide development patterns and trends. For instance, to examining dual-use studies have examined the development of hydropower facilities, to investigat- ing illegal smuggling dams and plants in North Korea. activities, satellite im- agery is empowering analysts to produce in- ment patterns and trends. For instance, used a combination of optical imagery novative and original data-driven research studies have examined the develop- to detect the presence and activity of in a data scarce field of study.15 ment of hydropower dams and plants pair trawlers; SAR imagery and nighttime in North Korea. One noted a move away optical imagery (Visible Infrared Imagery Making Sense of Fleeting from the large signature hydropower Radiometer Suite) to identify and distin- Moments plant projects of the Kim Jong Il era and guish different fleets of lighting vessels; Satellite imagery can help improve un- toward more durable small to medi- combined with Automatic Identification derstanding of what is happening inside um-size tiered plants in the north central System data, observational data from North Korea in numerous ways despite and northwest provinces of the country, the South Korean coast guard, written several challenges to interpreting that dams and reservoirs adjacent to their as- evidence of illegal fishing operations and data in accurate, meaningful and respon- sociated power plants.10 Although some other open source data. sible ways with broad implications for of these developments were mentioned incomplete or overreaching analysis. in the North Korean press, the region by The study found that the scale of illegal region analysis helped corroborate and Chinese fishing in North Korean waters, Pictures can make for a compelling story, illustrate the trend over time. In a fol- at least some of which were found to especially on topics where the audience low-on study of the hydropower plants have North Korean fishing permits, in- has little prior technical knowledge of in the northeast provinces, especially volved more than nine hundred vessels the subject area. In the current 24-hour , satellite imagery in 2017 and seven hundred in 2018, news and social media environment, news showed evidence of a unique pattern of despite a ban on the sale of North Kore- about North Korea spreads globally at development less discussed in North Ko- an fishing rights established under UN lightning speed. Once a narrative is out in

9. Group of Earth Observations Global Agricultural Monitoring (GEOGLAM) Initiative. “Heavy rains and flooding in August affect primary rice producing areas in the Democratic People’s Republic of Korea,” Crop Monitor, August 13, 2020, https://cropmonitor.org/index.php/cmreports/special-reports. 10. Peter Makowsky, Jenny Town and Samantha Pitz, “North Korea’s Hydroelectric Power – Part I,” Tearline, July 4, 2019, https://www.tearline.mil/public_page/north-koreas-hydroelectric-power-part-i. 11. Peter Makowsky, Jenny Town and Samantha Pitz, “North Korea’s Hydroelectric Power – The Power Station,” Tearline, October 12, 2019, https://www.tearline.mil/public_page/north-koreas-hy- droelectric-power-the-tanchon-power-station-project/. 12. Jaeyoon Park et al., “Illuminating dark fishing feels in North Korea,” Science Advances 6, no. 20 (July 22, 2020), https://advances.sciencemag.org/content/6/30/eabb1197. 13. Coauthor Jaeyoon Park, senior data scientist for Global Fishing Watch, reported a follow-up event that similar numbers of vessels were spotted in 2019 and 2020 (https://www.stimson.org/event/ untangling-the-impact-of-illegal-fishing-in-north-korean-waters/). 14. Sarah Bladen, “Report Exposes Rampant Illegal Fishing in North Korean Waters, Global Fishing Watch, July 22, 2020. https://globalfishingwatch.org/press-release/illegal-fishing-north-korea. Although this type of activity had been reported by the UN Panel of Experts (POE) in their final reports in 2019 and 2020, their reporting did not provide a sense of the scale of these operations. 15. Samantha J. Pitz and Peter Makowsky, “Pyongyang General Hospital: A Bright White Beacon After the Rains,” 38 North, September 24, 2020, https://www.38north.org/2020/09/pyongyang092420; Margaret Croy, “OP #47: Dual Use in the DPRK,” James Martin Center for Nonproliferation Studies, April 6, 2020, https://nonproliferation.org/op-47-dual-use-in-the-dprk; Catherine Dill, Cameron Trainer, Joseph Byrne, Gary Somerville, and James Byrne, “Project Sandstone 3: On the Trail of the Tae Yang: AIS Spoofing and North Korean Coal Smuggling,” Royal United Services Institute, June 26, 2019, https://rusi.org/publication/other-publications/project-sandstone-3-trail-tae-yang-ais-spoofing-and-north-korean-coal.

40 NKEF POLICY AND RESEARCH PAPER SERIES 2021 public with purported Figure 1. Heightened activity at the North Portal of the Punggye-ri Nuclear Test Site, sug- photographic evidence, gestive of nuclear test preparations. it is impossible to retract and difficult to correct.

Satellite imagery analy- sis can be challenging, especially when the imagery resolution is in- sufficient to confidently determine what is being observed. While any- thing one meter or less is considered high-reso- lution imagery, viewing a site at even 0.5-meter resolution leaves a lot of room for interpreta- tion. People look like dots and large boxes or crates may look similar because of their shapes and dimensions. Trained analysts work to make sense of what is observed based on ex- perience and technical expertise about what should be there and what would make sense Source: Image © 2017 Maxar Technologies. in that particular situa- tion, but also factor in other possibilities to enough recent high-resolution im- such as preparations for missile or nuclear if the image is truly unclear. agery to determine what is normal. In weapons testing. For example, in Septem- some cases, this may be due to budget ber 2020, an unusually large assembly of Moreover, a satellite image may provide restrictions, as discussed. Depending vessels were observed berthed inside the a clear aerial view of a specific place at a on the area of interest, though, a wealth secure boat basin at North Korea’s Sinpo specific moment of time but not con- of historical imagery may not always be South Shipyard. Under normal conditions, text—more information is needed. When publicly available either. Satellite com- this would be strongly suggestive of monitoring North Korea’s WMD pro- panies, for instance, often prioritize col- preparations for a submarine-launched gram facilities, for instance, baselines of lection of areas of high interest, both for test.16 In context—the area activity are necessary to understand how the strategic value as well as an assumed had just been hit by a destructive recent activity in a single image relates level of marketability for that imagery, and another was hours away—the prob- to the site’s normal patterns of life. For and more obscure sites or more rural ar- ability that a test was being prepared instance, large trucks around a missile eas of lesser strategic consequence may under those conditions was diminished. related facility may indicate unusual or have limited coverage. Further, in a field Although test preparations could not be suspicious activity. But determining what where competition is increasing, analysts fully ruled out, the vessels were more likely is “unusual” requires an understanding may also feel pressured at times to rush positioned in the basin to protect them of what a normal level of traffic is in and their analysis and make determinations from heavy storms.17 around that site over a longer period. with less information than ideal in order to be the first to publish. Another point to consider is that satellite Unfortunately, baseline assessments are imagery is not without some level of not always taken into account. Depend- Activity viewed out of context can easily be curation. Some mobile applications, for ing on the level of detail is needed, misconstrued, especially when it appears instance, track the location of orbiting researchers may not always have access consistent with something suspicious, , allowing users to estimate

16. Joseph Bermudez and Victor Cha, “Sinpo South Shipyard: Preparations for a Pukfuksong-3 SLBM Test?” Beyond Parallel, September 4, 2020, https://beyondparallel.csis.org/sinpo-south-shipyard- preparations-for-a-pukguksong-3-slbm-test. 17. Peter Makowsky and Liu, “Sinpo South Shipyard Braced for Stormy Weather,” 38 North, September 4, 2020, https://www.38north.org/2020/09/sinpo090420.

41 Figure 2. By April 12, activity was consistent with the completion of test when they may be overhead. If the North preparations. Koreans are using these or similar tools, they could also plan their activities ac- cordingly—including potentially refrain- ing from certain revealing activities when satellites are expected to pass overhead as well as deliberately conducting suspicious-looking activities as part of a deception campaign.

In March 2017 at the Punggye-ri nuclear test site, for example, activity consis- tent with nuclear test preparations was observed around the North Portal, the tunnel complex where four previous nuclear weapons tests had been con- ducted. It started with the appearance of a large crate or trailer around the portal. Over the next few weeks, the activity increased: pumping water out of the test tunnel, laying cabling leading to the portal, and draping camouflage netting over equipment just south of the portal’s support building.18 For all intents and purposes, the portal appeared to be Source: Image includes material Pleiades © CNES 2017. Distribution Airbus DS / Spot Image. ready for the conduct of an underground nuclear test by mid-April.19

Figure 4. Probable volleyball games in progress throughout Punggye-ri The nature of this activity was consistent Nuclear Test Site. with what had been observed in the weeks prior to North Korea’s February 2013 nuclear test, which was heavily re- ported on at the time. The timing made sense as well, in that it would have posi- tioned the North to be able to conduct a nuclear weapons test around a key North Korean holiday such as , the (Kim Il Sung’s ) or even , Korean People’s Army Founding Day. But while the context of the activity made sense, one question loomed: why would North Korea reveal this activity?

North Korea had conducted two nuclear tests in 2016 for which no obvious indi- cators had been observed in the days or weeks prior, clearly demonstrating the ability to camouflage or conceal test preparation activities from remote sen- sors. Therefore, why would the North Ko- reans allow test preparation activities to be detected this time around? Were they really preparing for a test? Were they trying to threaten a test without actually Source: Image © 2017 Maxar Technologies.

18. Joseph S. Bermudez Jr. and Jack Liu, “Heightened Activity at North Korea’s Punggye-ri Nuclear Test Site,” 38 North, March 29, 2017, https://www.38north.org/2017/03/punggye032917. 19. Joseph S. Bermudez Jr. and Jack Liu, “North Korea’s Punggye-ri Nuclear Test Site: Primed and Ready,” 38 North, April 12, 2017, https://www.38north.org/2017/04/punggyeri041217.

42 NKEF POLICY AND RESEARCH PAPER SERIES 2021 planning to do so or without officially Figure 5. Shelters erected over the rail spur at Sohae. committing to conducting one? Did they prepare for a test and then decide not to go through with it?

To this day, the North’s intention in that case is still unclear. 38 North’s reporting of the activity at the time was hedged to include the range of possibilities for why this type of activity was taking place, even though the easiest explanation was that preparations were under way for a forthcoming test.

In the end, North Korea did not conduct a nuclear test in April 2017. Instead, on at least one of the holidays, it appeared the North Koreans were engaged in volleyball games throughout the various courtyards around the complex.

In this instance, understanding the con- Source: left, © Maxar Technologies, 2015; right, © Airbus Defence & Space, includes material Pleiades © text and a baseline of activities did not CNES 2015. bring clarity to what was observed on the imagery. It did, however, underscore the need to constantly factor potential attempts in 2012, North Korea began launch pad and built a vertical assembly deceptive practices into the analysis—a upgrading the site to not only accom- building and transfer structure on the practice North Korea analysts know all modate larger rockets, but also to better launch pad, facilities that would conceal too well. But this case also served as a conceal rocket launch preparation and any movements associated with the clear demonstration of how Pyongyang engine testing activities. rocket being checked out, assembled, or was adapting to a highly monitored transferred to the launch tower. They also environment. In 2012, for instance, rocket stages were built permanent environmental covers observed being delivered to the site via around the launch tower platforms, - Coverage of the nuclear test prepara- rail, which were then transferred to the scuring the view of anything within them. tions in 2013 provided the North Kore- motor pool adjacent to the horizontal ans with the knowledge that the site was assembly building until they were ready This meant from delivery of the stages being monitored by nongovernmental to be assembled. Once the rocket was to the site to the moment it was ready actors, as well as clues as to what types checked out and assembled, it was to launch, the rocket could be sheltered of activities were noted. They therefore transferred to the launch pad via truck from optical satellite view. Video footage altered their test preparation practices and driven to the launch tower. There, it from the February 2016 satellite launch, in 2016 to be able to go unnoticed. In would be placed by into the tower indicated that North Korea had even tak- 2017, they demonstrated the ability to until it was ready to launch.20 Coverage en the precautions to conduct Kim Jong curate what activity would be captured by 38 North of this preparation process Un’s site visit of the launch site at night, by remote sensors to suit their purpos- allowed for timelines to be created and avoiding satellite capture of the asso- es—whether technical, political, or both. estimates to be made about when the ciated extra traffic or activity that could North might be ready to launch. have provided clues that the rocket had The North’s adaptation to increased arrived and the launch time was near. satellite monitoring has been observed It did not take long, however, before the not only in its practices, but also in its North Koreans modified their infra- These kinds of adaptations make it more WMD infrastructure. One of the more structure to better conceal their launch difficult to detect launch-related activi- extensive examples are modifications to preparation activities. In 2015, they built ties via satellite imagery and allow the facilities at the Sohae Satellite Launching shelters over the rail spur, obscuring the North Koreans to curate what remote Station, Pyongyang’s showcase space arrival of trains (that would carry rocket sensors capture. In some cases, this launch complex. Following widely publi- stages).21 They extended the rail line to means keeping certain activities out of cized coverage of its two satellite launch deliver the rocket stages directly to the view. In other cases, it may mean taking

20.  See, for instance, Nick Hansen, “North Korea Readies the -3 for Launch on April 12, 2012,” 38 North, April 12, 2012, https://www.38north.org/2012/04/nhansen041112. 21. Tim Brown and Jack Liu, “Support Future SLV Launch; Preparations for Engine Testing Identified,” 38 North, July 28, 2015, https://www.38north.org/2015/07/sohae072815.

43 Figure 6. The launch pad just before the December 2012 satellite launch (left); and after incomplete analysis can the construction of on-pad facilities in 2015. quickly lead to a wide spread of misinformation or disinformation, even if unintentional. This places a heavy burden on imagery analysts to their due diligence, to be objective and precise, and to acknowledge varying levels of uncer- tainty in their analysis, despite any pressure to tell a good story.

The persuasive power of imagery and the two-way learning that can occur from imagery analyses are among a number of factors that have led to questions about the ethics of publishing these Source: left, © Maxar Technologies, 2012; right, © Airbus Defence & Space, includes material Pleiades © CNES 2015. kinds of studies. Although currently no set standards or deliberate actions such as moving the CONCLUSION guidelines are in place for ethical conduct transfer structure at odd times to raise in the field of imagery analysis, concern is questions about the purpose of its growing among practitioners and prelim- movement: did it move because a rocket The proliferation of satellite imagery has inary groundwork is under way to help is being transferred to the launch tower created a number of ways to conduct da- foster and promote more responsible prac- or could it simply be movement of an ta-driven research about what is happen- tices, peer review, and accountability. 22 empty structure with no purpose other ing in a country where access is generally than to deceive? limited. From broad national or regional Moreover, as much as analysts should trends and sector-wide studies, to focused strive for careful and conscientious analy- Consequently, although satellite imagery monitoring of secure facilities, satellite ses, the media should also take seriously has created opportunities for the exter- imagery provides windows into the country the implications of sensationalized or nal world to view developments in North that the government has worked hard inaccurate reporting of these studies. Korea, the North Koreans have also to obscure. When combined with other Because photographs appear to corrob- learned more about the tradecraft of sources of information, it helps improve un- orate a narrative that is difficult change imagery analysis. This does raise serious derstanding of how the country is develop- once it is in the public psyche, journalists questions about what is an acceptable ing, what the regime prioritizes, and when should work to gain an accurate under- level of two-way learning and is one of and where problems may be looming. standing of conclusions drawn from these many factors that have led to discussions studies and report them in an equally about the ethics of publishing satellite Analysis, backed with purported photo- conscientious way to avoid spreading imagery analyses. graphic evidence, has enormous influ- misinformation about issues of national ence and media cycles are swift. Hasty or security concern. 

22.  Ben Loehrke, Laura Rockwood, Melissa Hanham, and Luisa Kenausis, “The Gray Spectrum: Ethical Decision Making with Geospatial and Open Source Analysis,” Stanley Center for Peace and Secu- rity, July 2019, https://stanleycenter.org/wp-content/uploads/2020/01/RRNW-TheGraySpectrum120-web.pdf.

44 NKEF POLICY AND RESEARCH PAPER SERIES 2021 REFERENCES

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Brown, Jason. 2020. “SAR 101: An Introduction to Synthetic Aperture Makowsky, Peter, and Jack Liu. 2020. “Sinpo South Shipyard Braced Radar.” Capella Space, . https://www.capellaspace.com/ for Stormy Weather.” 38 North, September 4. https://www.38north. sar-101-an-introduction-to-synthetic-aperture-radar. org/2020/09/sinpo090420.

Brown, Tim, and Jack Liu. 2015. “Support Future SLV Launch; Makowsky, Peter, Jenny Town, and Samantha Pitz. 2019a. “North Preparations for Engine Testing Identified.”38 North, July 28. https://ww- Korea’s Hydroelectric Power – The Tanchon Power Station.” Tearline, w.38north.org/2015/07/sohae072815. National Geospatial-Intelligence Agency. October 12. https://www. tearline.mil/public_page/north-koreas-hydroelectric-power-the-tan- Cha, Victor, and Lisa Collins. 2018. “The Markets: Private Economy chon-power-station-project. and Capitalism in North Korea?” Beyond Parallel (Center for Strategic and International Studies blog), August 26. https://beyondparallel.csis. ———. 2019b. “North Korea’s Hydroelectric Power – Part I,” Tearline, Na- org/markets-private-economy-capitalism-north-korea. tional Geospatial-Intelligence Agency. July 4. https://www.tearline.mil/ public_page/north-koreas-hydroelectric-power-part-i. Crop Monitor. 2020. “Heavy Rains and Flooding in August Affect Primary Rice Producing Areas in the Democratic People’s Republic of McKinzie, Matthew G., and Thomas B. Cochran. 2004. “Conducting Korea.” August 13. https://cropmonitor.org/index.php/cmreports/spe- Research on North Korea using Commercial Satellite Imagery, Map cial-reports. and Other Geographic Data.” Paper presented to the 54th Pugwash Conference on Science and World Affairs. October 4-9. https://fas.org/ Croy, Margaret. 2020. “OP #47: Dual Use in the DPRK.” James Martin nuke/cochran/nuc_04100401a_238.pdf. Center for Nonproliferation Studies, April 6. https://nonproliferation. org/op-47-dual-use-in-the-dprk. Park, Jaeyoon. 2020. “Untangling the Impact of Illegal Fishing in North Korean Waters.” Video event at the Henry L. Stimson Center. Dill, Catherine, Cameron Trainer, Jason Byrne, Gary Somerville and September 22. https://www.stimson.org/event/untangling-the-im- James Byrne. 2019. “Project Sandstone 3: On the Trail of the Tae Yang: pact-of-illegal-fishing-in-north-korean-waters/. AIS Spoofing and North Korean Coal Smuggling.” Royal United Ser- vices Institute, June 26. https://rusi.org/publication/other-publications/ Park, Jaeyoon et al. 2020. “Illuminating Dark Fishing Feels in North project-sandstone-3-trail-tae-yang-ais-spoofing-and-north-korean-coal. Korea.” Science Advances 6, no. 20 (July 22). https://advances.science- mag.org/content/6/30/eabb1197. Dinville, Andy. 2017. “Assessing Agricultural Conditions in North Korea: A Satellite Imagery Case Study.” 38 North, January 5. https://ww- Pitz, Samantha J., and Peter Makowsky. 2020. “Pyongyang General w.38north.org/2017/01/adinville010517. Hospital: A Bright White Beacon After the Rains.” 38 North, September 24. https://www.38north.org/2020/09/pyongyang092420. Hansen, Nick. 2012. “North Korea Readies the Unha-3 for Launch on April 12, 2012.” 38 North, April 12. https://www.38north.org/2012/04/ nhansen041112.

45 NEIL WATTS Watching Through the Lens of a Long Telescope Monitoring North Korean Sanctions Evasion in the Maritime Domain

ABSTRACT monitor cases of evasion or violations look beyond the deception, and identify of the sanctions involving bad actors in those behind it. the maritime domain. The paper starts The UN Security Council has imposed with the interdiction of the Chong Chon substantive sanctions on North Korea Gang and uses case studies selected INTRODUCTION since 2006. The sanctions regime is mon- from panel reports to demonstrate how, itored by a panel of experts based at through a combination of technology, the United Nations headquarters in New data, and information from states, it is The UN Security Council imposed York. Because the country does not rec- able to look into the country, monitor it, substantive sanctions on North Korea in ognize the sanctions regime, the panel is and investigate evasion and violations of response to concerns over its nuclear compelled to fulfill its mandate by look- sanctions affecting the maritime do- weapons program and after its first nu- ing into North Korea from a distance. A main. Aspects such as vessel disguises, clear test in 2006. The sanctions regime former South African Navy captain, the deception, command and control, and has since become the most comprehen- author was tasked with the portfolio of the transfer of illicit goods and technol- sive of any country in history.1 It is moni- maritime transportation and the North ogy are covered in detail. The value of tored by a panel of experts based at UN Korean Naval forces. He served on media and open-source information and headquarters in New York, in support of the panel for five years until 2018. The other sources are also demonstrated. the 1718 Committee established to over- paper unpacks the many ways that the Many of the experiences detailed here see the sanctions since 2006. The panel panel, specifically the author, looked have never before been shared in print. tasked with monitoring North Korea may into North Korea to either investigate or The challenge is to see it happening, not set foot in the secretive state.2 North

46 NKEF POLICY AND RESEARCH PAPER SERIES 2021 Korea—the Democratic People’s Republic Korean Navy. This expansion was in in the resolutions 1718 of Korea (DPRK)—does not recognize the recognition that shipping is the lifeblood (2006) and 1874 (2009) had been found existence of the committee, the panel, of North Korea, at least 80 percent of its aboard.4 When Panamanian authorities or the sanctions regime, and so defiantly trade flow going by sea and the fact that boarded the vessel, they were doing so rejects its resolutions and reports.3 The most evasion cases involved maritime with a search warrant to look for drugs. United Nations celebrated its seven- transportation in one way or another. I The panel arrived on August 12 to con- ty-fifth anniversary in 2020 and North Ko- served on the panel for the maximum duct an onsite inspection.5 rea has been at the forefront of the inter- allowed five years between 2013 and national body’s efforts to mitigate threats 2018, during which time I was never Their search revealed more than 240 to global peace and security, starting permitted to go to the secretive state or tons of military equipment buried under with the Korean War and continuing to its immediate neighbors to the North. thousands of bags of Cuban sugar, un- with the country’s subsequent nuclear In this role, I also supported the Iran and covering a North Korean–Cuban weap- weapons ambitions, culminating in the panel because they did not have ons transfer and the biggest weapons sanctions imposed from 2016 onward. In a maritime expert and would therefore interdiction under the sanctions regime.6 his commemorative speech on Septem- call on me from time to time. An incred- Because the panel could only investi- ber 21, 2020, -General António ible degree of sanctions evasion was gate an interdiction onsite at the behest Guterres urged the leaders of what is be- ongoing—the adage “high risk–high of the host Member State, we had to coming an increasingly polarized world gain”—given the great deal of money wait for a formal invitation. Fortunately, to work together, and bemoaned that to be made in circumventing sanctions Panama provided reports on what they “today, we have a surplus of multilateral and North Korea seeing itself in survival had found, and another UN agency, the challenges and a deficit of multilateral mode. The discussion that follows un- UN Office on Drugs and , which solutions” and “so many years without a packs the many ways that the panel, and was on the scene when the containers military confrontation between the major specifically I, was able to look into North were opened, provided us with addi- powers.” However, the ongoing, unre- Korea (and neighboring states) in the tional insight and information because solved North Korean threat continues course of either monitoring or investi- seizures of illicit goods were part of their to be an unhealed wound in relations gating cases involving bad actors in the mandate. The panel was thus able to do between the permanent members. maritime domain. extensive research on the containers, China and Russia even proposed a draft military items, and the vessel’s back- resolution to lift some sanctions on North ground and movements from its office in Korea (Nichols 2019). THE New York. INCIDENT The Panel of Experts, comprising eight The North Korean vessel sailed with its independent experts, is mandated, automatic identification system (AIS) among other things, to “gather, examine After my having barely stepped off the transponders off to evade international and analyze information from States, flight from South to New York on surveillance, sailing through the Panama relevant UN bodies and other interested July 11, 2013, the North Korean vessel Canal before picking up its illicit cargo in parties regarding the implementation the Chong Chon Gang had been inter- . The ship communicated via secret of the [sanctions] measures, and gather, dicted by Panama at the canal entrance codes with Pyongyang and the North examine and analyze information in par- outside Colon. On July 15, the Panama- Korean Embassy in , arranging ticular, on incidents of non-compliance.” nian president publicly revealed (the first the transfer with the Cuban military. This is done from the UN headquarters use of by a national president) Payments for the vessel’s transit through in New York, so the panel is therefore that Panama had stopped a North Kore- the canal and voyage costs were made compelled to fulfill its mandate by look- an vessel carrying “undeclared military through a network of shadowy front ing into North Korea (and its neighbors), cargo.” This forced me to hit the ground companies with offices stretching from from the outside looking in, from afar. running when the panel coordinator to . appointed me the lead investigator. Two With my appointment by then Secre- days later, on July 17, the Panamanian Because the panel has no access to tary-General Ban Ki-Moon, the panel Permanent Mission formally informed company or government records in of seven became eight. I was the first the 1718 Committee Chair that the North Korea, as would be typical in most to be tasked with the responsibility of North Korean–flagged vessel had been countries, the information from member specifically monitoring and investigating inspected in Panama’s territorial waters states or onsite at incidents (but for a maritime transportation and the North and that materials possibly subject to the very limited window) is like gold. It is

1. Since 2006, nine substantive resolutions which include twenty-six types of measures. 2. The Panel of Experts assists the 1718 Security Council Committee established pursuant to resolution 1718 (2006). 3. The Permanent Mission of the Democratic People’s Republic of Korea does however, on rare occasions, send a note verbale addressed to the president of the Security Council to make a statement. 4. Resolutions 1718 (2006) and 1874 (2009). 5. The panel may only conduct a site visit if invited by the relevant Member State. 6. Twenty-five standard shipping containers (sixteen forty-foot and nine twenty-foot) and six military trailers (for Volga and Pechora systems), for a total of about 240 tons of arms and related materiel.

47 often important to take a second look perseded only by the captain. Last, that sor, serving as samples for a larger order at the information retrieved from a case every captain keeps meticulous records if it met with the approval of their North because only then is fully understand- of every voyage, including all receipts, Korean clients. ing the meaning and context of the key which helps identify agents and complic- elements of the case possible. A second it actors. In my opinion, the unused equipment look enables seeing new connections and equipment still in its original pack- and, as a result, knowing what new Both the Chong Chon Gang and its aging suggests that these items all came documents and records are needed company, Ocean Maritime Management, from a very large war reserve of Sovi- to complete the picture and take the were designated by the United Nations, et-era munitions, stockpiled during the investigation forward. Usually only one so all vessels, companies, and personnel Cold War, that was rapidly approaching opportunity to get all the documents linked to it are subject to an asset freeze its shelf life, being phased out of service, and information onsite is possible, but and travel ban. The activities of these are or surplus to the needs of a more peace- in the case of the Chong Chon Gang, all then investigated and monitored by ful era. It is entirely possible that this was we were able to go back to Panama a the panel. An implementation assistance an opportunity for Cuba to make good second time because the case against notice was also created to share lessons use of it as tradable goods or barter the captain and first mate was ongoing. learned from the incident with member trade with an increasingly isolated North We were able to get more communica- states and to clarify the meaning of arms Korea and as a gesture of friendship tion records, copies of documents from transfer. Because the main text of the between pariah states. Of some con- the prosecutor’s files, and a very rare panel’s reports is word-length restricted— jecture is the method of payment for interview with the captain. because of translation capacity—a great the military equipment and sugar from deal of granular detail is shifted into the Cuba, within the context of the delivery Of vital importance also, because the annexes, which are not translated. of hot rolled steel, springs, and locomo- representatives of the company had to tive wheels carried onboard the vessel pay the fine for the release of the vessel that was offloaded in Havana on arrival. in person—these key individuals had to THE CHONG CHON GANG’S The panel calculated that the sugar, fly out from North Korea and present ILLICIT CARGO using its estimated international value, to identity documents, a formal company be about $3.8 million, comparable to the letter—in person. This provided critical combined value of the steel and wheels information on the identity and contact Examination of the Chong Chon Gang’s delivered by the Chong Chon Gang, information of key players in the hier- illicit cargo of arms and related materiel $3.7 million. 7 archy and critical information on the also provided a few insights into the company that we could never have ob- relationship between Cuba and North tained without going to North Korea or Korea and the state of the conventional COMMAND AND CONTROL having it provided by the country (which weaponry of Korean People’s Army. As a FROM NORTH KOREA would never happen). The same bounty rule, the panel does not speculate in its awaited us when it came to the seizure reports. On the basis of my background of the North Korean–flagged vessel and experience, however, I suspected The communications between the Du Bong by Mexico the following year. that the cargo was but one of a series of Chong Chon Gang’s captain and Pyong- Although we were unable to access clandestine shipments between Cuba yang provided interesting insights into the address book of the first vessel’s and North Korea. Further, that it revealed the network of command and control for email system, the Mu du Bong yielded a shortage of MIG-21 jet trainers (one North Korean-flagged fleet of vessels en- all of its contacts. The information from was fitted for instrument flying train- gaged in international trade—both legal these two incidents enabled the panel ing)—possibly through losses incurred, and illicit. It became clear that the Mari- to build a picture of the structure and and engines—something they would time Bureau in Pyongyang was running operation of the operating entity Ocean have problems manufacturing indige- operations through the pseudo-compa- Maritime Management Company. I nously, especially in light of an earlier ny Ocean Maritime Management (OMM). say entity because North Korea has no illicit transfer of thirty-two decommis- The communications, documents, and private companies, shipping or any sioned MIG-21 fighters and spares from interview with the captain revealed sev- other type. All commercial vessels and that was prevented (UNSC eral significant findings: their related “companies” in North Korea 2012, 40; 2015, 37–38). The presence of • Despite not being on its fleet list, fall under the Maritime Administration, limited quantities or singleton varieties OMM operated and supported which reports to the Ministry of Land and of tank tracks, the AO-18 cannon parts, the Chong Chon Gang on its voy- Maritime Transport. We also learned that the shells casings, the rocket-propelled age via its Pyongyang headquar- every North Korean crew had a political grenades, 7.62 mm cartridges, further ters and regional branch offices officer onboard, whose authority was su- suggested these were possibly a precur-

7. The value of the hot rolled steel, if new, was about $3.66 million (5,341 tons as of July 2013 price at $673 per ton), and the locomotive wheels at around $36,000 (twelve units at $3,000 each), using www.steelonthenet.com and alibaba.com.

48 NKEF POLICY AND RESEARCH PAPER SERIES 2021 in Vladivostok, Russia, and , China. OMM also made use of a complicit company in Singapore, Figure 1. Direct foreign tanker deliveries to Chinpo Shipping Company.

• All communications between the ship and OMM’s headquarters 22% were copied to OMM’s Vladivo- stok office, “OCRU” (RU referring to Russia). Both passages through JANUARY JUNE TO 47% 53% the Panama Canal were arranged TO MAY OCTOBER with the Panama agent by OCRU. 2019 2019

• OMM Dalian branch arranged for 78% spare parts while the ship sailed to Cuba.

• Chinpo Shipping Company, Sin- gapore, paid the Panama agent n DPRK-Flagged n Foreign-Flagged for the canal transit and other services. Source: UNSC 2020a, 7–8.

Automatic Identification Systems The panel monitors movements of ves- and attention with the Chong Chon also helpful. These are combined with sels linked to North Korea using special- Gang case. The vessel’s AIS was turned communications, and emails between ized maritime tracking software such as off on June 1 immediately after the entities, and the connectivity between MarineTraffic.com and Windward. These ship passed through the Panama Canal, key individuals, given that North Korea databases combine the AIS data from allowing it to quietly load the illicit invariably relies on a few key individu- land stations and satellites to provide cargo of weapons at a submarine base als—who are based both in North Korea real-time information on ship’s location, in Mariel (near Havana) before pro- and embedded in companies abroad. tracks, and information transmitted by ceeding to another port to cover it with each vessel.8 Although it is promulgated sugar. The AIS was only switched back Surveillance Patrols as mandatory by the International Mar- on again on July 11, when the ship was The panel also receives a great deal itime Organization (IMO), for all vessels approaching the Panama Canal on its of information from coalition partner over three hundred gross tons to avoid western passage to North Korea, which surveillance assets (naval vessels and collisions at sea, it is often manipulat- cast a veil over all its movements in aircraft) that monitor North Korean mari- ed by bad actors.9 The act of manip- Cuban waters. Mariel was purposefully time activities. The contributing coun- ulation and false data also provides omitted from the vessel’s declared list tries are , Canada, , Ja- evidence of evasion through deception of last ten ports of call to complete pan, New Zealand, the , techniques. Legitimate instances of the deception. and the United States. The activities its being switched off aside, such as include monitoring and surveillance of countermeasures against piracy and Maritime Databases suspected UN sanctions violations, such to avoid scrutiny by competitors such Finding vessels requires a combina- as designated vessel movements, illegal as choice fishing grounds or preferred tion of specialized maritime databases ship-to-ship transfers of oil, petroleum areas for legal ship-to-ship transfers, not such as the IMO’s GSIS, I Seaweb, and products, and coal, illicit sand exports, maintaining AIS in operation at all times Equasis. This is done by analyzing and illegal transfer of fishing rights to is a violation of IMO requirements. company information (even if they are foreign fishing vessels. The Japan Min- Many operators have begun making its fronts), company records, registrations istry of Foreign Affairs often posts press operation continuous (uninterrupted) with flag states, and the commonality releases and photographs from patrol through contractual obligations follow- of contact information or office bearers. assets on its website to publicize these ing panel recommendations to curtail Open-source databases such as the activities.10 I cover these sanctions vio- the practice. It could be argued that Tokyo MOU, containing Port State Con- lations in greater detail to demonstrate the problems posed by AIS deception trol data, and even the North Korean how information is gathered to support really gained international significance Maritime Administration database, is panel investigations.

8. The IMO is a UN agency. 9. AIS is used to prevent collisions at sea, for vessel traffic management to ensure safe passage and for search and rescue purposes. SOLAS (Survival of Life at Sea), Chapter V, Regulation 19.2 on Carriage requirements for shipborne navigational systems and equipment. 10. Japanese Ministry of Foreign Affairs, “Japan-North Korea Relations,” https://www.mofa.go.jp/region/asia-paci/n_korea/index.html. 11. Resolution 2397 (2017), paragraph 5.

49 Figure 2. Nampo fuel import terminal Figure 3. The Shang Bao doing an illicit night transfer

Source: UNSC 2019b, 66.

Source: UNSC 2019a, 15.

Figure 4. The Yuk Tung disguising itself by spoofing Figure 5. Decoy vessel using a Class B AIS transponder

Source: UNSC 2019a, 10.

Source: UNSC 2019a, 13.

MONITORING BANNED the port of Nampo in violation of export posed on supply by the sanctions (UNSC COMMODITIES: BREACHING reporting requirements for deliveries 2019b, 8). From January to August 2020, THE FUEL CAP made to North Korea. only China and Russia have reported exports. Without doubt, however, given The panel is tasked with monitoring the low price of oil and glut of tankers Ever since the imposition of an annual and reporting to the committee, which storing fuel, illicit transfers would be very cap of five hundred thousand barrels in turn alerts 78 member states on how tempting in a highly constrained global allowed for petroleum product (fuel) close the reported (legal) transfers are market. The panel monitors the status of transfers to North Korea in 2017, the approaching the cap, with a view that fuel deliveries by satellite images of the country has continued to violate the res- deliveries should then be scaled back.12 fuel terminal in Nampo, tanker tracking, olutions by conducting illicit ship-to-ship Tellingly, the market indicators for and reports from member states. Figure transfers to import refined petroleum. 11 and diesel reflect steady price 1 shows a comparison reflecting how di- More recently, the panel reported that levels within North Korea—indicative of rect foreign tanker deliveries to Nampo this tactic has been supplemented by an absence of price spikes, which would has escalated while North Korean tank- brazen direct, undeclared deliveries to mean fuel shortages, despite the cap im- ers engage in ship-to-ship transfers.

12. See UN Security Council, “Supply, sale or transfer of all refined petroleum products to the DPRK,” https://www.un.org/securitycouncil/sanctions/1718/supply-sale-or-transfer-of-all-refined-petroleum .

50 NKEF POLICY AND RESEARCH PAPER SERIES 2021 Investigation of evasion activities its sister-ship and taking on the iden- Recognizing the contribution of this includes these aspects and images tity of the Maika, ostensibly flagged in source of foreign revenue to its nuclear taken by surveillance assets monitoring Panama.14 It even used the Miaka’s IMO programs, the UN imposed a cap on maritime evasion activities by North number, 9033969. All the while, the real coal exports in 2016 and then, follow- Korean–linked vessels. Figure 2 shows Comoros-flagged Hika, using its legally ing ballistic missile launches in 2017, a the fuel terminal at Nampo dedicated registered IMO number of 9033969, was full ban of all coal exports on August 5, to receiving oil and petroleum products seven thousand miles away in the Gulf 2017. However, the high quality of its from vessels doing illicit ship-to-ship of Guinea (see figure 4). The Yuk Tung anthracite at bargain-basement prices transfers at sea and direct deliveries, and also took the Hika’s name then altered has proved irresistible to many import- a hub for inland distribution. Underwater it to Mahika, which it broadcast on AIS ers. Ways of monitoring illicit exports pipelines are also attached to offshore transmissions.15 Last, to complete the from North Korea include watching not mooring buoys to offload fuel from these impersonation, the Yuk Tung painted the only vessels leaving its ports but also vessels to the terminal complex. abbreviation YT within a circle on the the stockpiles of coal at the coal loading funnel, and painted over its IMO number terminals, particularly the port of Nampo, Ship-to-Ship Transfers and name on the stern, changing it to the largest west coast port. The problem Ship-to-ship transfers are intended to Maika. The vessel also generated a fake with exports from Nampo is that vessels circumvent sanctions compliance con- Equatorial Guinea registration certificate have to pass through the West Sea Lock trols at ports and to conceal the destina- as the Maika. Gates across the entrance to the Tae- tion or origin of the transferred cargo. dong River, which limits vessels to fifty North Korea has been illicitly exporting In a relatively new tactic, tankers en- thousand tons and a harbor draught of coal and obtaining petroleum products gaged in illicit transfers meet via decoy ten meters.18 illegally this way for some time. Vessels “fishing vessel” Class B AIS decoy for conducting such transfers with North illicit transfers.16 The second feeder ves- The shipment of illicit coal from North Korean vessels will typically switch off sel, using a Class B AIS transponder to Korean ports should not be confused their AIS to evade detection and mask disguise itself as a fishing vessel, conceal with legal shipments of Russian coal from their movements, which is contrary to its identity, and limit the range of detec- the Free Trade Zone, Port of Rajin IMO regulations governing safety of life tion by patrolling assets. This vessel then coal terminal, linked to the Trans-Siberian at sea (SOLAS), requiring that the AIS be acts as a homing beacon for potential Railway. Here China and Russia provide in operation at all times. These vessels transfer vessels for the North Korean information to the 1718 Committee, also disguise themselves through ship tanker Saebyol, sailing with its AIS off in advance, on the vessels and their identity theft and false AIS transmissions, (see figure 4). The Class B transpon- exempted cargo.19 The two armored Mer- often transmitting previous flags for as ders are carried by vessels below the cedes-Benz S-Class sedans recently used long as six months or more. threshold for compulsory AIS (Class A) as by Kim Jong Un in North Korea on parade required by SOLAS, such as small fishing and abroad during talks with the United Vessel Disguises vessels. Although Class B units have less States revealed a nexus between coal Other methods of evasion include functionality, reduced power, and range, smuggling from North Korea and luxury the physical disguise of North Korean they can operate and communicate with goods being smuggled into the country. tankers, the use of small, unregistered Class A units on vessels above three The vehicles were shipped by an Italian vessels, illegal name-changing and other hundred gross tons. company from Rotterdam initially to a forms of identity fraud, night transfers, company in Dalian, China, but after two and the use of additional vessels for changes, first ended up in , Japan— transshipment. In figure 3, the vessel MONITORING BANNED then onward to , South Korea (Re- Shang Yuan Bao is captured by low light COMMODITIES: COAL public of Korea). There they were loaded imaging by surveillance aircraft.13 SHIPMENTS onto the -flagged vessel DN5505, which sailed with its destination listed as A good example of comprehensive Nakhodka, Russia. It soon switched off its deception is the foreign-flagged tanker North Korea was a global leader in AIS. Research by C4ADS, using databases the Yuk Tung (IMO no. 9030591) us- anthracite coal exports before sanctions, such as Palantir and Windward, suggests ing AIS spoofing in the . It mostly to China. In addition, exports of that the vessel transferred the vehicles at impersonated another vessel by falsely this commodity have been one of the sea with another vessel in exchange for transmitting using the MMSI number of key pillars of North Korea’s economy.17 North Korean coal linked to a company

13. The Shang Yuan Bao has been involved in multiple ship-to-ship transfers and vessel identity fraud with a number of North Korea-flagged tankers. 14. Flag registries issue Maritime Mobile Service Identities (MMSI) numbers, which are recycled. IMO numbers are unique and never reissued. Spoofing occurs when one or more vessels are shown in two locations simultaneously. 15. UNSC Panel report S/2019/171 of March 5, 2019, 8–13. 16. UNSC Panel report S/2019/691 of August 30, 2019. 17. US Energy Information Administration, “North Korea,” June 2018, https://www.eia.gov/international/analysis/country/PRK. 18. Shipnext.com, “International Shipping Marketplace: Nampo,” https://shipnext.com/port/nampo-kpnam-prk. 19. The Rajin-Khasan port and rail project is allowed to solely export Russia-origin coal by paragraph 8 of resolution 2371 (2017) of 5 August 2017, and resolution 2375 (2017) of 11 September 2017.

51 Enermax Korea (Kuo and Arterburn 2019, clearly stepping into the gap in the sand areas. These barges carried at least one 41–42, 49). Enermax had earlier been export market left by exports restrictions million tons of sand with a value esti- linked to a planned ship-to-ship transfer imposed by and Vietnam (Work- mated of at least $22 million.23 Tellingly, of North Korean coal between a Russian man 2020). North Korea can generate according to C4ADS, none of the 279 vessel and the vessel Wise Honest, seized millions in foreign revenue by exporting vessels tracked transmitted their IMO by then later by the United to its closest neighbor, China (less than a number, making it very difficult to defin- States, after being captured by satellite day’s sail away) which, together with India, itively identify them. The risks are high, loading in Nampo in 2018.20 exports two-thirds of the world’s cement, however, because the barges were never and an historic scale of construction that designed for an ocean voyage, demon- 38 North harnesses observers and ana- has generated a voracious appetite for strated by the sinking of one barge in lysts to publish its in-depth analyses and sand, a critical ingredient of cement (Van bad weather en route to China with its ill-gotten cargo of sand. Similarly, three other barg- The relatively new (since at least June 2019) method of es doing illegal sand dredging making ever-increasing illicit coal deliveries from North near have Korea to China using large nondescript barges has now also also sunk with significant loss of been adopted to illegally deliver sand. life (Shim 2020). The Alibaba website details wealth of information on developments Oss 2019, 42). Satellite imagery has once a plethora of Chinese sand suppliers, happening in North Korea. Similarly, the again played a definitive role in exposing which raises the question of where the RUSI Project Sandstone also produces the scope and scale of the illicit sand “good quality” sand is coming from, giv- high-quality reports based on high-res- exports from North Korea. en that China only produces the “poor olution imagery and vessel tracking.21 quality” variety, hence the attraction of In this way, they function as one of the Data analytics companies such as the Cen- North Korean sand. In figure 6, barges many useful tripwires the panel could ter for Advanced Defense Studies (C4ADS) are visible taking on sand from dredgers use to launch an investigation or add also help the panel’s investigations by in North Korean waters. to the data on existing cases, especially providing high-quality supporting data. high-resolution commercial satellite Their excellent report on the tracking of The sand is also being delivered to imagery. The relatively new (since at least the dredging and convoys of barges trans- Chinese ports by large vessels and also June 2019) method of making ever-in- porting sand, through a combination of transshipped in Chinese coastal waters creasing illicit coal deliveries from North open-source commercial satellite imagery, to larger vessels destined for foreign Korea to China using large nondescript and specialized maritime databases, is but ports. The panel named a Palau-flagged barges has now also been adopted to one such example. To quote their report, bulk carrier, the 16,725 gross ton Rui Jin, illegally deliver sand. the astonishing scale and coordination which has a Lebanese owner, that made of sand dredging operations off the west multiple deliveries of North Korean sand coast “showcases the boldness and impu- to Ningbo, China. To hide its movements, MONITORING BANNED nity with which sanctions evasion networks the vessel switched off its AIS and LRIT COMMODITIES: SAND EXPORTS operate, even under close scrutiny.” Ships (long-range tracking and identification transiting in the Bay area numbered system operated by the flag registry) on at least 1,563 between March and August each voyage. To its credit, the Palau reg- Member states play a big role in report- 2019 alone, relative to a modest 418 over istry ordered the vessel to be detained ing prohibited exports from North Korea. the two previous years combined (Kuo in Ningbo and it has not moved since. In Although North Korea had exported and Sung 2019). another classic deception tactic, the op- sand to states in the region in the past, erators tried to change its name to Mir, to it has recently exponentially ramped Member states reported to the panel assign it a new registered owner, and to up dredging and exporting the sand in that, in May 2019, more than ninety-two change its flag to Sierra Leone.24 The pan- violation of the ban imposed by the res- Chinese-flagged, large self-propelled el also tracks this phenomenon, called olutions since 2017.22 This activity should barges were loaded with sand from flag-hopping, when vessels are identified be seen within the context of North Korea dredgers in the Haeju port and Sinchang as complicit in sanctions evasion activ-

20. UNSC Panel report S/2019/171 of March 5, 2019, 22–25. 21. RUSI, “Project Sandstone,” https://rusi.org/project/project-sandstone. 22. Prohibited under Chapter 25 of the Harmonized System by resolution 2397 (2017) of December 22, 2017. 23. UNSC Panel report S/2020/15 of , 2020, 43. 24. UNSC Panel report S/2020/15 of March 12, 2020, 39–43.

52 NKEF POLICY AND RESEARCH PAPER SERIES 2021 ities. Aside from sanctions violations, Figure 6. Snapshot of Chinese barges loading in the long term, the industrial-scale North Korean dredged sand on May 12, 2019 sand dredging will without doubt cause extensive damage to the coastal environ- ment as North Korea seeks to in on the shortage of international supply and resultant spike in sand prices.

STATE MEDIA AND OPEN-SOURCE MEDIA

The panel uses North Korean state media extensively, both print and video releas- Source: UNSC 2020a, 41. es, to identify sanctions violations and to gather information to support investiga- tions, monitoring, and analysis. Articles Figure 7. Kim Jong Un’s luxury yacht and photographs from and the public broadcaster Korean Cen- tral (KCNA) are powerful primary sources of information. In this context, NK News, a subscription-based website that provides news and analysis about North Korea, in particular, it pro- vides a user-friendly interface and an ar- chive to these media sources through its KCNA Watch professional services plat- form.25 The ’s Wayback Machine is also a useful open-source Source: UNSC 2015, 43. resource for North Korean media.26

During my time on the panel, I used a combination of state media to monitor and analyze the development of North Korea’s sea-launched ballistic missile Britain, valued between $4 to 6 million. Adaptation of Commercial Radars (SLBM), the adaptation of commercial The model pictured in 2013, produced Images of a new naval stealth surface marine equipment for its Navy, and the between 2007 and 2011 was one of effect ship, test-firing an antiship missile acquisition of luxury yachts. twenty-one sold worldwide.28 Notably, a publicized by state media in 2015, re- Princess Yachts representative for North vealed three commercial radar antennas Luxury Yachts China, based in Dalian, notorious for its manufactured by the Japanese compa- A media article drew attention to luxury connection to North Korean illicit activity, ny Furuno Electric Co. Ltd (see figure yachts acquired for North Korea’s leader, denied any involvement (Ryall 2013). 8).30 Because this was a violation of the Kim Jong Un, in violation of the luxury Satellite imagery showed that this yacht arms embargo through the acquisition goods ban.27 I based my investigation on and another luxury yacht were based at and adaptation of commercial systems a combination of state media imagery, the west coast port of Wonsan (Smith for the Korean People’s Army Navy ves- commercial satellite imagery, and yacht- 2020). The yachts reveal the luxury sels, it triggered a panel investigation. ing magazines to track down the type lifestyle of Kim Jong Un while “diverting In this case, Furuno gave its full cooper- of yacht, its manufacturer, and the route critically needed resources away from ation: no records of sale to North Korea taken. The yacht in figure 7 was found the people in the DPRK at tremendous after 2009 existed.31 The subsystems to be a Princess 95MY manufactured cost when they have great unmet needs” displayed aboard the missile boats are by Princess Yachts International, Great to develop nuclear weapons.29 inexpensive, commercial, off-the-shelf

25. NKNews and KCNA Watch are accessible online (https://www.nknews.org and https://kcnawatch.org). 26. Internet Archive is a free service available on registration (http://web.archive.org). 27. NK News, “Exclusive: fit for a princess — Kim Jong Un’s $7m yacht,” June 18, 2013. 28. UNSC Panel report S/2015/131 of February 23, 2015, 42–43 (see also S/2014/147, para. 120). 29. Resolution S/RES/2397 (2017) of December 22, 2017. 30. Rodong Sinmun, February 7, 2015.

53 products used globally in the fishing Satellite imagery of October 2013 rights in violation of sanctions. Seafood and leisure craft markets, making it im- showed a missile testing complex near exports are an important source of rev- possible to trace the source without the the submarine construction hall in Sinpo. enue for North Korea, estimated to have serial numbers.32 The case demonstrat- In figure 10, the imagery reveals a test generated about $295 million in 2017 ed how easily North Korea can modify stand and impact area adjacent to it, (Nichols 2019). This aspect is challenging commercial maritime technology that to conduct land-based launch ejection to monitor because these vessels are not can easily be integrated through plug-in tests. Imagery from July 2014 revealed easily tracked without AIS. It has been interfaces for military use. a hitherto unknown submarine in the fit- estimated that revenue dropped to $120 ting-out basin (with work going on within million in 2018 after the ban. It is now The Sea-Launched Ballistic Mis- the submarine’s sail), a submersible test growing again, however. Reportedly, Chi- sile Program barge, and a towing vessel. Analysis of nese fishing vessels have been displaying The combination of state media the vessel showed a single launch tube North Korean fishing permit number releases and satellite imagery are capability for an SLBM. plates, documents, or North Korean inter- crucial to monitoring the development im certificates of registry in mid-2019 (see of North Korea’s indigenous SLBM KCNA footage of a visit by Kim Jong figure 12). capability. On May 9, 2015, state media Un to an engine test facility revealed The going rate of a fishing permit for in Pyongyang announced that it had the gas generator used to cold-launch three months is reportedly ¥400,000 or conducted “an underwater test-fire the missile on March 24, 2016, from an $57,594. Notably, the fishing vessels try to of [a] Korean-style powerful strategic underwater launch tube for the test (left) avoid the scrutiny of patrols by painting submarine ballistic missile,” showing a when fitted onto the base of a subma- over their names and superimposing missile emerging from the sea (KCNA rine-launched ballistic missile (see figure another. Although the ban intended to 2015). Seven member states reported 11). This successful launch test, which deny North Korea revenue for its nuclear that the missile had been launched transitioned through the ejection, boost, and ballistic missile programs and make from an underwater platform rather and flight phases, on a lofted trajectory, vital nutrition available to citizens, the sale than from the submarine as claimed. was a significant leap forward, placing of fishing rights created other problems It became necessary to also monitor North Korea into an exclusive group for fishermen. This is manifested in a phe- all the elements associated with the of nations with a submarine-launched nomenon known as “ghost ships,” where project: testing facilities (ground and ballistic missile capability. The two- fishermen are pushed long distances a submersible test barge), a unique stage missile has subsequently been from their ports and beyond their tradi- indigenous submarine design (Gorae upgraded to solid-state propellent and tional areas to find new fishing grounds. class), infrastructure at the Sinpo South the new, bigger version seen on pa- Along the Japanese coast, North Korean shipyard, a submersible drydock, and a rade in 2017. The Pukguksong-3 was fishing boats are washing up with the towing vessel for the test barge. first test-launched on October 2, 2019 bodies of their crew. Although this has (the Pukguksong-2 being a land-based been happening for years, the increase The most important task was to de- version).34 The main fabrication hall at since 2017 is dramatic. The displaced termine the type and capability of the the Sinpo shipyard is being carefully fishermen being pushed farther out have ballistic missile. Because North Korea is watched for signs of a suspected newer also resulted in conflict, even gunfire, in prone to exaggerating missile capabili- submarine with capacity for multiple the of Russia ties and manipulating imagery, the first launch tubes, particularly given that the (BBC 2019). Incidentally, the lifting of the objective was always to test the quality capability depends on a single launch ban on seafood was one of the proposals of the imagery for manipulation. This is platform and only one launch tube. Of made by China and Russia in December essential to estimating dimensions, the significance is the state media coverage 2019 (Nichols 2019). type of propulsion, and the method of the October 10, 2020 , of launch. The KCNA images of the where a fourth iteration of the Pukguk- missile showed that the SLBM (named song SLBM was revealed: this will spark CASTING THE NET WIDER: PANEL Pukguksong-1) resembled the Sovi- a new round of research to determine RESOURCES et-era SS-N-6/R-27 SLBM, in terms of what “upgrades” have been developed its length to diameter ratio, external to enhance its capabilities (Van Diepen features, and the warhead (see figure and Elleman 2020). The panel uses diverse sources that each 9).33 The exhaust plume pointed to a contribute pieces of the puzzle, includ- liquid fuel propellant and, because Seafood and Fishing Rights ing interviewing individuals from com- ignition was above water, suggested Despite a ban on seafood exports, North panies dealing with North Korea, those an underwater cold ejection. Korea has continued to transfer its fishing involved in incidents, and defectors.

31. UNSC Panel report S/2016/157 of , 2016, 41. 32. These types of sensors are available for less than $1,600 per unit or under $9,000 for complete systems. 33. Pukguksong translates to Polaris, or North Star, in English. 34. UNSC Panel report S/2020/151 of March 2, 2020, 70–71, 227–31.

54 NKEF POLICY AND RESEARCH PAPER SERIES 2021 Defectors Figure 8. Commercial radar fitted to a naval vessel Another effective way to look into North Korea and get a snapshot of activities within the secretive country’s programs is to interview defectors. I use the word snapshot deliberately because the freshness these individuals’ knowledge stops the moment they leave and the time lapse before the panel gains access to them is often significant. Although the panel cannot quote or mention these Source: UNSC 2016, 41. individuals to protect their identities, they are nevertheless invaluable in providing Figure 9. Images of the Pukguksong-1 SLBM insights into the methodologies, activities, and hierarchies of those carrying out the illicit activity. Furthermore, an unspoken rule dictates that defector testimony per se does not meet evidentiary standards. It is nevertheless very helpful by providing insight into and direction for investiga- tions and broadens the scope of what is Source: UNSC 2016, 17–19. known but still needs to be verified. Figure 10. Images of the test complex and the submarine Across the Borders An important part of the maritime domain is the monitoring of the flow of trade that goes by sea from North Korea to nearby foreign ports for transshipment, such as those in the Chinese ports of Dalian and (which is relatively close by road and rail via the ) on the west coast, and Russian ports on the East Coast and across the River by road and rail (particularly the Source: UNSC 2016, 22, 97. Trans-Siberian rail link). I have had inves- tigations from concerned banks regard- ing marine diesel ostensibly destined for Chinese companies, but the rail link crosses over the via a North Korean station before crossing over again imports to trade recipients to extrapolate able the panel to take cases further by to China. exports from the secretive country. providing additional avenues of enqui- ry or context or details that clarify the Economic data also provides a way to Korea Watchers Community meaning or importance of information at monitor maritime activity from North For the panel, and particularly in the hand. The inverse is also true, on many Korea because certain exports from the maritime environment, Korea watchers occasions I have seen Korea watchers isolated country can be shipped only by are a highly effective force multiplier. take information from panel reports and sea. This provides the panel with a clue These groups and individuals often have open up new windows on incidents of that can be used to trigger investigations access to greater resources and many evasion or deception. into trade prohibited by the resolutions. highly talented analysts at their dispos- This information is available from the UN al. The panel often meets with analysts, Comtrade database, a free repository experts, and diplomats for briefings, CONCLUSION of official international trade statistics discussions, and an exchange of ideas. and relevant analytical tables.35 Because The importance of such engagements North Korea does not provide trade data, is often in breakthroughs in cases or in This paper intended to share insights the panel does reciprocal calculation of pieces added to the puzzle that en- into the work of the UN Panel of Experts

35. UN Comtrade database (https://comtrade.un.org/data).

55 Figure 11. KCNA screen captures of the gas generator (left) fitted to the SLBM (right)

Source: UNSC 2017, 20.

Figure 12. Chinese vessels illegally using North Korean fishing permits

Source: UNSC 2016, 22, 97.

for North Korea, and how the experts Only eight members serve on the panel, do their research and investigations on each with a distinctive portfolio. Mine what is a highly secretive, inaccessible was the maritime domain, which linked country, faced with the most compre- up with nearly every case and often hensive sanctions regime in history. constituted the bulk of the seven reports Being denied access and having to I contributed to. The evasion going on work from New York is both difficult and is considerable: the adage “high risk– challenging. It can be done, however, high gain” applies, given the money to using a combination of technology, data, be made in sanctions and North Korea and the support of cooperating states, seeing itself in survival mode. If you are providing evidence of evasion activities seeking granular detail on the cases, and violations of a multitude of sanctions actors, typologies, and deception, I urge measures impacting the maritime do- you to seek out the reports. They often main. Looking into the country invariably read like a spy novel, full of intrigue, entails looking outside the country and twists, and turns.  working to trace the activity back to North Korea, often in multiple steps. The NOTE: All opinions expressed are solely challenge is heightened when North Ko- my view and are independent from the cur- rean and other complicit actors employ rent Panel of Experts. Images for this paper counter strategies and tactics to obfus- have been sourced from the UN Panel of cate their identity, tracks, and networks Experts final and midterm reports. to mislead due diligence efforts and their connectivity to North Korea.

56 NKEF POLICY AND RESEARCH PAPER SERIES 2021 REFERENCES

BBC. “Russia arrests 80 North Korean fishermen after three border ———. 2015. Panel of Experts established pursuant to resolution 2141 guards injured in clash.” September 17, 2019. https://www.bbc.com/ (2014) Final Report S/2015/131, 37–38. https://www.un.org/security- news/world-asia-49734042 council/sanctions/1718/panel_experts/reports.

KCNA. 2015. “Kim Jong-Un watches strategic submarine underwa- ———. 2016. Panel of Experts established pursuant to resolution 2207 ter ballistic missile test-fire.”Rodong Sinmun, . www. (2015) Final Report S/2016/157, 17–19, 22, 41, 97. https://www.un.org/ rodong.rep.kp/en/index.php?strPageID=SF01_02_01&news- securitycouncil/sanctions/1718/panel_experts/reports. ID=2015-05-09-0014. ———. 2017. Panel of Experts established pursuant to resolution 2276 Kuo, Lucas, and Jason Arterburn. 2019. “Lux and Loaded: Exposing (2016) Final Report S/2017/150, 20. https://www.un.org/securitycoun- North Korea’s Strategic Procurement networks.” Washington, DC: cil/sanctions/1718/panel_experts/reports. C4ADS. https://c4ads.org/reports. ———. 2019a. Panel of Experts established pursuant to resolution 2464 Kuo, Lucas, and Lauren Sung. 2019. “Against the : Sand (2019) Mid-Term Report S/2019/691. https://www.un.org/security- Dredging in North Korea.” C4ADS blog. https://c4ads.org/blogposts/ council/sanctions/1718/panel_experts/reports. against-the-grain. ———. 2019b. Panel of Experts established pursuant to resolution 2407 Nichols, Michelle. 2019. “China, Russia propose lifting some U.N. (2019) Final Report S/2019/171, 8, 66. https://www.un.org/security- sanctions on North Korea, U.S. says not the time.” Reuters, December council/sanctions/1718/panel_experts/reports. 16. https://www.reuters.com/article/us-northkorea-usa-un/china-rus- sia-propose-lifting-some-u-n-sanctions-on-north-korea-u-s-says-not- ———. 2020a. Panel of Experts established pursuant to resolution 2464 the-time-idUSKBN1YK20W. (2019) Final Report S/2020/151, 7–8, 44. https://www.un.org/security- council/sanctions/1718/panel_experts/reports. Ryall, Julian. 2013. “Kim Jong-un skirts UN ban with luxury yacht.” South China Morning Post, June 21. https://www.scmp.com/news/asia/ ———. 2020b. Panel of Experts established pursuant to resolution 2515 article/1264521/kim-jong-un-skirts-un-ban-luxury-yacht. (2020) Mid-Term Report S/2020/840, 13, 15, 41. https://www.un.org/ securitycouncil/sanctions/1718/panel_experts/reports. Shim, Elizabeth. 2020. “Four people dead after Chinese sand-digging vessel sank.” United Press International, July 28. https://www.upi.com/ Van Diepen, Vann H., and Michael Elleman. 2020. “North Korea Un- Top_News/World-News/2020/07/28/Four-people-dead-after-Chi- veils Two New Strategic Missiles in October 10 Parade,” 38 North, Octo- nese-sand-digging-vessel-sank/7631595949642. ber 10. https://www.38north.org/2020/10/vdiepenmelleman101020.

Smith, Josh. 2020. “Satellite images of luxury boats further suggest Van Oss, Hendrik G. 2019. “Mineral Commodity Summaries.” U.S. North Korea’s Kim at favoured villa: experts.” Reuters, April 29. https:// Geological Survey, 42. https://prd-wret.s3-us-west-2.amazonaws.com/ www.reuters.com/article/us-northkorea-kim-wonsan/satellite-images- assets/palladium/production/s3fs-public/atoms/files/mcs-2019-ce- of-luxury-boats-further-suggest-north-koreas-kim-at-favoured-villa-ex- men_0.pdf. perts-idUSKCN22B0W7. Workman, Daniel. 2020. “Top Sand Exporters by Country.” World’s United Nations. 2020. “High-level Meeting to Commemorate the Top Exports. http://www.worldstopexports.com/top-sand-exporters- Seventy-fifth Anniversary of the United Nations.” Secretary-General of by-country. the United Nations, H.E. Mr. António Guterres. https://www.un.org/en/ un75/commemoration/secretary-general-united-nations.

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57 ANDREA R. MIHAILESCU The Lap of Luxury: Using Open- Source Data to Trace North Korea’s Procurement of Luxury Goods

ABSTRACT countries are not always committed to Korea’s military parade celebrating its enforcement. This paper examines two seventy-fifth anniversary makes it clear sets of luxury goods: Russian thorough- that sanctions have not had the desired More and more information is becoming bred horses and two armored Mercedes. effect. Noncommercial, publicly available available as reporting or in studies, or One is not clearly defined and one is. trade data from UN Comtrade enables when North Korea decides to show the The goal of this paper is to analyze the identifying the source from which North rest of the world something in a parade patterns and trends of North Korea’s Korea was able to import some of the or a Kim Jong Un review. Customs data acquisition of luxury goods through illicit goods and materials visible in those may help corroborate and identify the trade and provide a set of recommenda- images. Other goods remain untraced, sourcing of those items or materials. It tions to help identify ways to capture il- obscured from government recorded does not always do so, particularly in licit activity and strengthen enforcement. customs data. The focus of this study regard to luxury goods. The UN Secu- is how North Korea obtains the luxury rity Council bans the export of luxury goods it does. goods to North Korea but has delegated INTRODUCTION the definition of what a luxury good I review noncommercial open-source is to member states. The more clearly information to examine the trends and defined a luxury good, the more North Photographs and video footage are patterns of North Korea’s luxury goods Korea works to obscure its origins from windows into North Korea’s purchasing trade and to identify the schemes Pyong- customs data and authorities—taking capabilities and show us where sanc- yang uses to circumvent sanctions and advantage of an imperfect system where tions have failed. Footage from North local customs laws and regulations so

58 NKEF POLICY AND RESEARCH PAPER SERIES 2021 that its transactions are untraced. I also of Industry and Security, horses may Sources used include the UN DPRK Panel review unpaid literature that has ana- be considered livestock. North Korea, of Experts’ annual reports over the last lyzed commercial data in its research however, does not use them as such.2 several years, news articles, rules and and made that research publicly avail- Do the horses meet the thresholds of a regulations of countries where the illicit able free of charge. My goal was to use luxury good, even under US standards? trade is taking place, UN Security Council open-source information that would be Perhaps the answer depends on the resolutions, research from the Washing- available to anyone at no cost. breed of horse. The white horses in the ton-based Center for Advanced Defense parade or the ones Kim Jong Un rides Studies (C4ADS), the Institute for Science The first step is to assess how luxury are Russian thoroughbreds, so not all and International Security, noncommer- goods are defined. The definition the horses North Korea imports qualify cial customs data from UN Comtrade, and alone is problematic and made en- as livestock. The definition remains photos and video footage, including from forcement on the luxury goods ban problematic in the most sophisticated North Korea. The UN Comtrade database to North Korea challenging, to say of sanctions regimes and gets increas- was used for detailed exports of spe- the least. The term luxury goods is ingly complicated quickly. cific traded goods per the Harmonized defined by the UN Security Council, System, short for Harmonized Commodity which prohibits luxury goods transfer The second type of luxury goods are Description and Coding System, or HS to North Korea but then delegates the the two armored and illicitly imported code. HS code is a standardized interna- responsibility of defining such goods Mercedes. Mercedes, a German com- tional system used to classify products to individual member states. This in pany, has several transshipment points: in shipments. The data pulled from UN turn has often cre- ated confusion and challenges to both the Security Council The term luxury goods is defined by the UN Security and member states seeking to impose Council, which prohibits luxury goods transfer to North their obligations un- Korea but then delegates the responsibility of defining der Security Council resolutions in the such goods to individual member states. interpretation of lux- ury goods and how to define them from country to country. Rotterdamn, Dalian, Osaka, Busan, Na- Comtrade supporting North Korean No standard international defini- hodka. Unlike Russian thoroughbred trade, however, clearly do not capture tion has been established. Member breeders, , Mercedes, and the traded goods North Korea is able to ob- states at all levels of development are company manufacturing the armored scure. First, North Korea does not report individually expected to define luxury protection for the vehicles were likely any data. Second, countries do not always goods in their domestic policy. unwitting participants. Here, the UN report all of their trade activity, particular- 1718 Sanctions Committee (DPRK) has ly their exports, given that most countries Two types are reviewed here. The first defined high-end vehicles as luxury tend to tax imports and not exports. To involves the payment schemes related goods, leaving little ambiguity.3 capture North Korea’s imports, we would to North Korea’s import of Russian thor- have to pull export data from countries to oughbred horses over the years, horses These two items were selected both North Korea, which could be less reliable. recently used in the military parade cel- to analyze North Korea’s illicit imports Finally, UN Comtrade data do not nec- ebrating the country’s seventy-fifth an- and assess how Pyongyang circum- essarily contain entity-level information; niversary. Russian definitions of luxury vents sanctions and to better under- this study did not use any commercially goods are limited to address the status stand when parties are complicit and available trade data sources to investigate of the horses and whether they meet when they are not. The trends and specific entity-level information. the threshold.1 The US Department of patterns in these two models could Commerce luxury ban is far more com- help regulators and authorities detect As sanctions have tightened and Pyong- prehensive. The definition of the horses illicit activity. They also illustrate North yang has become more adept at circum- remains ambiguous but may depend Korea’s ability to continue to abuse the venting them by using evolving elaborate on how the horses are used. According international trade and finance system illicit payment schemes, tracking North to the Commerce Department’s Bureau by violating international sanctions. Korean illicit activity has become increas-

1. The Kremlin, Russian Customs Rules, October 14, 2006 (http://kremlin.ru/acts/bank/25583); March 2, 2016 (http://www.kremlin.ru/acts/bank/41624); , 2016 (http://www.krem- .ru/acts/bank/42376/). 2. U.S. Department of Commerce, “2020 North Korea Ballistic Missile Advisory,” Bureau of Industry and Security, https://www.bis.doc.gov/index.php/policy-guidance/country-guidance/sanc- tioned-destinations/north-korea. 3. UN 1718 Sanctions Committee (DPRK), Consolidated list of additional items and luxury goods. Group B, https://www.un.org/securitycouncil/sites/www.un.org.securitycouncil/files/list_items_ and_luxury_goods.pdf.

59 ingly more difficult. Photos and video objectives of advancing the country’s es was 0101. It is extremely difficult to footage released from North Korea give weapons programs. gather data on North Korean trade and us an additional glimpse into what it has the discrepancy among open sources. acquired beyond the new missiles and Access to the Russian horses is pro- Identifying patterns when trends are gear showcased during the parade. The viding Kim Jong Un with two benefits. divergent or complementary is infor- day-to-day images of Kim Jong Un re- The first is propaganda domestically mative to help capture North Korean viewing sites are a window into the coun- to promote a mythical legacy, and the efforts to offset losses from goods that try. They range from Kim traveling in his second is that the horses are often gifts are clearly identified as luxury goods. growing luxury fleet of vehicles to inspect for loyal members in Kim’s inner circle.4 According to customs data pulled by areas affected by typhoons to riding As sanctions tighten and Kim looks for Reuters, Russia exported twelve horses horseback with his inner circle to Mount nonsanctioned items to use as poten- worth a total of $75,509 to North Korea Paektu, the mythological birthplace of his tial luxury goods, the horses may be in 2019, which conflicts with the UN father, Kim Jong Il. Kim is not shy about complementary substitutes. However, Comtrade data on the numbers of hors- any of these goods. If anything, he flaunts horses require considerable daily care, es exported.5 The amount, however, is them, caring little about sanctions ramifi- especially thoroughbreds, and the the same. UN Comtrade also reports cations or criticism from abroad. care is not inexpensive. Responses to a Russia exported 128 horses during that horse-ownership survey from the Uni- period; Reuters 138. The amount Luxury goods are significant in the North versity of Maine found that the average and quantity from Reuters and UN Korean regime as a tangible reward as annual cost of ownership is $3,876 per Comtrade mirror each other for 2015. well as for their symbolic importance horse; the median cost is $2,419. In Reuters reports the total during the and cultural significance that builds North Korea, the cost is probably lower entire 2010 to 2019 period is $584,304. friendship and loyalty, as the Panel of but still well above any amount any UN Comtrade reports $584,291. Experts 2020 annual report highlights. ordinary North Korean would be able Despite sanctions, Pyongyang is still able to afford. North Korea showcased at The value discrepancy is small and to source them. least forty horses during its seventy-fifth therefore not significant. The quantity anniversary military parade. The horses discrepancy, on the other hand, is large appear to be healthy and well cared and requires further examination, as RUSSIAN HORSES for (image 1). well as the whole dataset and what kind of payment schemes Pyongyang could North Korea imported 128 horses be- be using. Before 2010, North Korean The greater the difficulty in assessing tween 2010 and 2019 and spent nearly purchases of horses were less frequent, whether a luxury good is indeed a luxury $600,000 that we know of according to its last purchase being in 2001, when it good, the fewer restrictions the Secu- Russian custom data available on UN imported ten for $15,000 total. Before rity Council is able to impose on North Comtrade (see figure 1). The UN Har- 2001, the previous purchase was in 1997. Korea to import them. This in turn makes monized System code used for the hors- As figure 2 makes clear, however, the it increasingly difficult for the United States and its allies to hold North Korea Image 1. Russian thoroughbreds at seventy-fifth anniversary parade accountable for items that may have a dual purpose, such as the horses. Such workarounds enable Kim to maintain loyalty among the Pyongyang elite. Kim is able to work around Secu- rity Council resolutions fast- er than it is able to adopt new ones (as the United States struggles to press China and Russia to sup- port stronger measures) to address his acquisition of goods that help him to further sustain regime Source: Rodong/Sinmun/KCNA.

4. Pjotr Sauer, “How North Korea’s Leader Buys Purebred White Horses From Russia’s Stud Farms,” Moscow Times, February 20, 2020, https://www.themoscowtimes.com/2020/02/19/how-north- koreas-leader-buys-purebred-white-horses-from--stud-farms-a69317. 5. Reuters, “North Korea imported purebred horses from Russia as Kim Jong Un took snowy ride,” February 17, 2020, https://www.reuters.com/article/us-russia-northkorea-horses/north-korea-imported- purebred-horses-from-russia-as-kim-jong-un-took-snowy-ride-idUSKBN20B11E.

60 NKEF POLICY AND RESEARCH PAPER SERIES 2021 unit cost North Korea paid per horse varied greatly over the period. Figure 1: Russian export of horses to North Korea The pattern does not differ greatly from other importers of Russian horses $200K 70 (see figure 3). North Korea’s unit value per horse, however, is higher in cer- 56 tain years relative to other noteworthy $150K importers of Russian horses, such as 42 China and —both of which $100K have imported hundreds of thousands 28 of horses in a given year. Why did North Korea pay so much more $50K 14 for the Russian horses in 2014 and 2019? Perhaps the payment schemes could $0 0 provide insight: they may not be entirely ‘10 ‘13 ‘14 ‘15 ‘16 ‘19 legitimate even though the horses them- n Value n Quantity selves were not subject to sanctions; Pyongyang could have violated UN and US sanctions as well as local laws. Source: UN Comtrade

Most countries, such as the United States, have caps or reporting require- Figure 2: North Korean value per imported Russian ments on the amount of cash individuals can take out of the country. Russia and $40K China have similar requirements. Travel- ers can generally take the equivalent of $10,000 of foreign currency out of Russia $30K and $5,000 out of China.6 China enforc- es an additional restriction of 20,000 RMB in or out of China. This limit is $20K applicable to local residents and foreign- ers.7 Otherwise, both Russia and China $10K require permissions issued by a bank if the amount is higher. The required amount exceeded customs laws in both $0 countries in 2014 and 2019 and would ‘10 ‘13 ‘14 ‘15 ‘16 ‘19 have required special permissions. The n Value per unit cost n Average unit cost money may have never left China or Russia and was possibly paid using local Source: UN Comtrade bank accounts held by North Korean individuals abroad, North Korea-linked companies abroad, or foreign nationals toms officials to scrutinize the purchase but North Korea continues to acquire abroad with extensive commercial or and should prompt additional investiga- them, including high-end luxury vehicles. political relationships with North Korea tion on the purchase. According to C4ADS, Kim Jong Un ap- who operate de facto correspondent peared in a new Rolls Royce Phantom to accounts for DPRK financial institutions. meet US Secretary of State ARMORED MERCEDES- in Pyongyang during Pompeo’s visit in The figures for 2014 and 2019 in figure 3 MAYBACH S600 October 2018.8 Several months later, suggest that North Korea paid more per KCTV showed Kim appearing in an ar- horse than at least two other countries in mored Mercedes-Maybach S600 Guard, the region. Given North Korea’s history, In 2013, the United Nations defined which is marketed to heads of state and it likely paid a premium for the horses to automobiles for private transport as a is valued at more than $500,000.9 Kim’s begin with. It would have behooved cus- luxury good in Security Resolution 2094, fleet of luxury vehicles also appeared

6. IFCG Encyclopedia, “Customs rules in Russia for individuals,” https://en.cyclopedia.ifcg.ru/wiki/Customs_rules_in_Russia_for_individuals. 7. General Administration of Customs, People’s Republic of China, “Customs Clearance Guide for International Passengers,” http://english.customs.gov.cn/statics/88707c1e-aa4e-40ca-a968- bdbdbb565e4f.html.

61 Figure 4: Exports of vehicles to include Audis and Toyotas. A report from C4ADS found that North Korea imported 803 luxury vehicles from 2015 to 2017, PERIOD REPORTER TRADE VALUE (US$) the majority originating from Russian 11 2015 China $21,377,507 companies.

2015 France $21,753 C4ADS conducted a study that assessed 2015 Germany $50,438 that North Korea acquires high-end lux- ury goods using smuggling techniques 2015 $50,359 similar to those of its weapons pro- 2015 Russian Federation $26,841 grams. C4ADS argues that “high-end luxury goods share key features with du- 2015 India $24,178 al-use goods for North Korea’s weapons 2015 $96,457 program: they are scarce, specialized products with high monetary value 2016 China $24,365,811 and great symbolic importance for the 2016 Mongolia $14,510 Kim regime. However, unlike dual-use goods, luxury products like armored 2016 Niger $3,355 Mercedes vehicles are easily identifi- 2016 Russian Federation $1,335,343 able on publicly available trade records 12 2016 India $7,105 and at port.”

2017 China $27,098,239 Most of these vehicles have appeared 2017 Mongolia $25,000 in photos or in video footage; other images were obtained directly by the 2017 Russian Federation $302,663 Panel of Experts. Some of these vehicles 2017 Mali $4,267 continue to be armored by a third party. Their origins are difficult to ascertain and 2018 China $358,196 the accuracy of the reporting by coun- 2018 Honduras $2,043 tries exporting vehicles to North Korea remains spotty, especially in more recent 2018 Niger $21,768 reporting. Countries reporting trade with 2018 India $17,328 North Korea capture only the surface of the relationship. It is fair to suspect more 2019 China $29,442 going on than the reporting indicates. 2019 Mongolia $34,160 Figure 4 offers a snapshot of what coun- 2019 $33,764 tries are reporting in their exports of 2019 United Arab Emirates $33,764 vehicles to North Korea using HS Code 8703, illustrating which countries are Source: UN Comtrade reporting the aggregate value. It is diffi- cult to ascertain how much of this value during his meetings with President Don- often through elaborate supply chains, comes from the export of luxury vehicles ald Trump in and Vietnam then despite the restrictions imposed by most to North Korea or whether any of these with President in Vladi- manufacturers’ compliance programs. countries acted as a transshipment hub. vostok, Russia, and again with Chinese For example, the Panel and C4ADS President in Pyongyang.10 obtained information received from one C4ADS reports that North Korea import- country that in 2020, North Korea contin- ed at least $191 million worth of luxury The Panel of Experts’ investigations over ued attempts to import Mercedes-Benz goods from 2015 to 2017, sourced from the years shows that North Korea retains S-Class limousines using companies “as many as 90 countries” in violation of the ability to obtain luxury automobiles, based in third countries. Other vehicles United Nations sanctions.13 The focus

8. Joshua Berlinger, “Kim Jong Un appears to have a new Rolls-Royce,” CNN, October 8, 2018, https://www.cnn.com/2018/10/09/asia/kim-jong-un-rolls-royce-intl/index.html. 9. Erik Johnson, “Do Your Wurst: Meet the Armored Mercedes-Maybach S600 Guard,” Car and Driver, February 22, 2016, https://www.caranddriver.com/news/a15348672/do-your-wurst-meet-the- armored-mercedes-maybach-s600-guard/. 10. Lucas Kuo and Jason Arterburn, “Lux & Loaded: Exposing North Korea’s Strategic Procurement Networks,” C4ADS, 2019, https://static1.squarespace.com/static/566ef8b4d8af- 107232d5358a/t/5d307a43bf42140001877def/1563458128965/Lux+%26+Loaded.pdf 11. Kuo and Arterburn, “Lux & Loaded.” 12. Kuo and Arterburn, “Lux & Loaded.”

62 NKEF POLICY AND RESEARCH PAPER SERIES 2021 here, though, is to review the open- numbers it is impossible to find a con- need to do a better job of working with source materials reporting North Korea’s crete trace.”18 According to open-source distributors and ensuring their supply import of two Mercedes-Maybach S600s. research, it has been difficult to ascer- chains are not compromised. The cost This vehicle’s armor protects occupants tain whether these vehicles were used incentives in the long run will benefit from steel-core ammo fired from assault or were imported as new. According to everyone involved and help prevent rifles and from explosive devices. The NK News as cited by C4ADS, however, illicit activity. vehicle also has leather massaging seats. when the vehicles spotted in Pyongyang C4ADS scoured eight months’ worth of in January 2019, they had customized It took months and thousands of miles customs records, shipping data, bills of wheels, indicating that they “were not through six countries before the vehi- lading, and other open-source docu- directly sold by [the manufacturer] but cles arrived in Pyongyang, having made ments to determine how the vehicles have been modified by a third party.”19 stops in China, Japan, South Korea, and made their way from Rotterdam to They might also have been modified by Russia before being flown to their final Pyongyang.15 North Korea for one reason or another, destination, Pyongyang, where only Kim but C4ADS stipulates that because the Jong Un would benefit from riding them. On June 14, 2018, the two vehicles— containers remained sealed between which cost about $500,000 each—began Rotterdam and Busan “any vehicle mod- C4ADS determined the linkages from their journey in two sealed containers ifications likely would have been made Rotterdam to Busan, South Korea. After from the Dutch Port of Rotterdam in the prior to their departure from the Neth- Busan, the vehicles were placed on the custody of China Cosco Shipping Cor- erlands or after their plausible arrival in Togo-flagged DN5505, per the bill of poration.16 It is not clear who initially pur- the .” lading. From there, North Korean–linked chased the vehicles. Daimler, the compa- traders were able to mask its trace. After ny that owns Mercedes, claimed that it is Daimler says Mercedes runs back- the DN5505 left Busan, it reported via its unaware how the vehicles were delivered ground checks on potential buyers of Automatic Identification System (AIS) that and where they come from: “Our compa- the vehicles to ensure that the company it would reach Nakhodka, Russia, on Octo- ny has had no business connections with is not selling to sanctions violators.20 ber 5, 2018. It then turned off its transpon- North Korea for far more than 15 years What went wrong? Daimler cooperated der and disappeared. When it turned the now and strictly complies with EU and with the Panel of Experts and told them transponder back on, its AIS identified it as US embargoes. To prevent deliveries to North Korea and to any of its embassies Daimler is not alone in its poor insight into its distribution worldwide, Daimler has implemented a chain. These cases may be the exception. Companies need comprehensive ex- to do a better job of working with distributors and ensur- port control process, which we consider ing their supply chains are not compromised. appropriate and effective and which meets all requirements of the export that the images of vehicles were indeed being where it had originally disappeared. control authorities.”17 produced by the company, but with It may have reached Nakhoda; it may have modifications by another party. “Daim- not, but the vehicles were consigned to Do Could Daimler have done more? What ler could not determine the date of Young Shipping, registered in the Marshall did it miss? At what point was North production or sale without more infor- Islands and one other ship, the Pana- Korea able to break the supply chain and mation and stated that it had complied ma-flagged oil tanker Katrin, which was obtain the vehicles? “Sales of vehicles by with all relevant applicable embargoes already implicated in other DPRK-linked third parties, especially of used vehicles, and did no business with the Democrat- sanctions evasions. are beyond our control and responsi- ic People’s Republic of Korea.”21 bility,” Daimler told CNN. “We always According to C4ADS, Russian business- investigate the vehicles displayed on the Daimler is not alone in its poor insight man Danil Kazachuk may own Do Young photos in the media thoroughly. How- into its distribution chain. These cas- Shipping. This is not clear, however, be- ever, without the vehicle identification es may be the exception. Companies cause records from the Marshall Islands,

13. Joshua Berlinger, “How did Kim Jong Un get his Mercedes-Benzes? New report traces or- 17. Berlinger, “How did Kim Jong Un?” igin of North Korea’s luxury rides,” CNN, July 16, 2019, https://www.cnn.com/style/article/ 18. Berlinger, “How did Kim Jong Un?” north-korea-luxury-vehicles-intl-hnk/index.html. 19. Kuo and Arterburn, “Lux & Loaded.” 14. Erik Johnson, “Do Your Wurst: Meet the Armored Mercedes-Maybach S600 Guard,” Car 20. and Christopher Koettle, “How North Korea’s Leader Gets his Luxury and Driver, February 22, 2016, https://www.caranddriver.com/news/a15348672/do-your- Cars,” July 16, 2019, New York Times, https://www.nytimes.com/2019/07/16/world/asia/ wurst-meet-the-armored-mercedes-maybach-s600-guard/. north-korea-luxury-goods-sanctions.html. 15. Berlinger, “How did Kim Jong Un?” 21. DPRK, Panel of Experts Annual Report, August 2019. 16. Kuo and Arterburn, “Lux & Loaded.”

63 a secrecy jurisdiction, are not definitive. Mercedes-Benz vehicles that reportedly individuals and entities from selling Documents obtained by C4ADS show ended up in North Korea. The consigner any luxury goods to the country. Yet Kazachuk as having owned the Katrin was Do Young Shipping, a Marshall Is- Kim Jong Un is usually seen being for about a month in 2018.22 lands shell company that is also the own- chauffeured in what is believed to be a The scheme to purchase high-end er and ship manager for the DN5505. $1 million Mercedes-Maybach Pullman luxury goods offers North Korea an South Korea had previously detained Guard armored limousine. opportunity to engage in schemes to the DN5505 in Pohang for importing export its commodities and mask their North Korean coal from Nakhodka in As the end user, North Korea uses origin. C4ADS notes that DN5505 was February and referenced the DN5505’s complex, constantly evolving schemes heading in the opposite direction back coal import in November 2018. Enermax to circumvent sanctions and export to Busan. In this example, Pyongyang claimed in a press interview that it had controls as it obfuscates its origins to was able to mask the origins of its taken another local broker at his word obtain illicit goods. It constantly rein- coal while obtaining the vehicles in an that the coal originated in the Russian vents itself to that end and often pays elaborate scheme. “On November 2, Federation. Enermax never responded premiums for such service, making the the DN5505 submitted a bill of lading to the Panel’s inquiries.26 goods costlier than their retail value. to South Korean customs authorities that showed that the vessel imported Failure of the South Korean firm Enermax Understanding how North Korea 2,588 metric tons of ‘anthracite coal in to respond to the Panel of Experts is smuggled goods is not easy. Complex bulk’ allegedly from Nakhodka, where problematic because it sends the wrong and constantly evolving, the schemes no record exists of its arrival.”23 North message to other countries. If anything, become more and more difficult to un- Korea also likely pays a premium for South Korea should have encouraged ravel. North Korea obtains luxury goods, this service. Enermax to respond. weapons-related materials, commodities all through well-planned, orchestrated Nakhodka, however, has no record of The failure to respond enables North overseas illicit networks. It uses similar the DN5505’s arrival and UN Comtrade Korea to continue its illicit activities, networks for weapons smuggling.27 does not show that Russia engaged abusing countries’ territories and their in any coal trade with North Korea companies. Understanding the patterns and trends in 2018. The New York Times reports to North Korea’s schemes may not be that Kazachuk acknowledged in a Smuggling high-end vehicles is nothing difficult but identifying the country’s telephone interview his relationship to new for North Korea. Mercedes seems networks and catching players in the the DN5505, but provides no further to be a preferred brand. Four Mer- act before the transactions are finalized details about the cargo or whether he cedes-Benz S-600 limousine conver- has seen mixed results. North Korea had transferred the vehicles to North sions were observed during military pa- has demonstrated that it is able to ac- Korea.24 What actually happened? rades in Pyongyang on April 15 in 2012, quire both advanced weapons systems 2013, and 2014, and again in October and gear as well as luxury goods. It has On October 7, two days after the 2015. The Panel of Experts reported learned how to work with licit channels estimated arrival of DN5505, three Ily- in February 2016 that three shipments to obfuscate its illicit networks, making ushin-76 cargo jets operated by North of such limousines that were allegedly it even more difficult for authorities to Korea’s reportedly flew from diverted to North Korea in 2010 and trace the origins of goods. This makes Pyongyang to Vladivostok. The jets are 2011. The vehicles, which originated in it all the more import for manufactur- often known to be used by North Kore- Europe, were armored and customized ers, companies, banks, and suppliers ans to transport armored vehicles used in the United States before transship- to understand their supply chains and by North Korea’s elites. According to ment to North Korea via China. The know their customers’ customers. C4ADS, they are rarely spotted in Vlad- Panel had obtained correspondence ivostok. Four months later, on January between Chinese businessman Young 31, 2019, the same vehicles were seen Ma, also known as George Ma, who ANALYSIS on the streets of Pyongyang.25 organized and financed the shipment of the Mercedes from the United States, South Korea’s Enermax was listed as and a US-based freight forwarder who The techniques used to smuggle high- the consignee on a bill of lading for a agreed to facilitate the transaction. end luxury goods, as mentioned, are shipment of 2,588 metric tons of coal much the same as those to smuggle from Nakhodka to Pohang port on UN sanctions not only prohibit North materials for its weapons programs. The , 2018, aboard the DN5505 Korea’s development of its weapons techniques are not new but involve a on the return trip from shipping the two proliferation programs but also ban constantly evolving, elaborate scheme

22. Wong and Koettle, “How North Korea’s Leader Gets his Luxury Cars.” 25. Kuo and Arterburn, “Lux & Loaded.” 23. Kuo and Arterburn, “Lux & Loaded.” 26. DPRK, Panel of Experts Annual Report, August 2019. 24. Wong and Koettle, “How North Korea’s Leader Gets his Luxury Cars.” 27. Kuo and Arterburn, “Lux & Loaded.”

64 NKEF POLICY AND RESEARCH PAPER SERIES 2021 of handlers, front companies, ship-to- smuggled goods varies but is always plier and the host country or attempt to ship transfers, and banking channels— significant. Sometimes affiliates, front stop the payment from going through— which often start with what appears to be organizations, and third parties are unless North Korea pays in cash. a legitimate transaction. When countries complicit, not always necessarily wit- tighten sanctions enforcement, the tingly. When an actor is operating illic- This is how facilitators help North Korea schemes become more elaborate and itly, they know what they are doing and procure high-end luxury goods. Such intricate, making a successful transac- therefore do not always ask questions. transactions require capable and willing tion more difficult but not necessarily Their goal is to process the transaction, intermediaries who will take their cut impossible. Nonetheless, countries need deliver the goods, and take their cut. to help secure transport from limited to tighten and enforce sanctions. suppliers across multiple jurisdictions. Despite sanctions, North Korea contin- These individuals and entities have In one year (2019–2020), the Institute ues to access the international financial access to key rail and sea delivery for Science and International Security system through joint ventures, offshore routes and are able to consign for identified more than 250 alleged North accounts, and shell companies, using shipments before diverting the cargo to Korean sanctions violations involving a network of smaller banking channels a North Korean end user. They may not sixty-two countries, an increase of six throughout Asia to circumvent sanc- even necessarily know they are doing countries over the previous year.28 tions and widen its access to global business with Pyongyang, and if they Thirty-nine of the sixty-two were al- legedly responsible for multiple (two or In one year (2019–2020), the Institute for Science and more) documented sanctions violations. International Security identified more than 250 alleged A dozen countries North Korean sanctions violations involving sixty-two coun- were involved in more than five alle- tries, an increase of six countries over the previous year. gations. “China alone had over 60 alleged violations, representing almost 25 markets and supply chains. Most do, they might not care as long as they percent of the total number of alleged foreign companies are likely participat- get their cut. As the cargo gets closer violations” during this period.29 “Hong ing unwittingly, and their negligence in to North Korea, however, the identity of Kong followed with over 20 violations, more careful compliance has created the end user is likely clear. and Sierra Leone, Russia and Indonesia a permissive environment. They lack each had a total of 10 or more alleged the resources, commitment, or skills to North Korean diplomats and represen- violations.” Several countries prevented adequately address appropriate com- tatives of overseas branches of North violations, for example, through inter- pliance and due diligence to counter Korean companies continue to facilitate diction and seizures of goods. North Korea’s access to their networks. such transactions while working with This is concerning. correspondent entities and individuals China was listed as not having taken in third countries. The Panel of Experts action. Some instances were identified in C4ADS reviewed national implementa- has documented numerous cases. From which Chinese entities made purchases tion reports submitted to the Security the C4ADS report “Lux & Loaded,” it on behalf of North Korea to obtain luxury Council and identified thirteen jurisdic- was difficult to ascertain the points at goods, as well as dual-use nuclear and tions that have defined luxury goods in which North Koreans were involved missile components, to avoid sending any terms and of those thirteen, only a or the exact collaboration took place. dollars back to North Korea. This scheme few had invoked standardized com- “Lux & Loaded” distinguishes between helped Pyongyang avoid issues with US modity codes. For each export control luxury goods acquired through general banking channels.30 regime, C4ADS matched product regional trade for broader consumer Sanctions on luxury goods have not descriptions to specific codes from the markets and procurement of high-end slowed North Korea’s ability to acquire HS Code.31 The user-to-user transaction specialized goods for limited custom- them. Instead, it has prompted Pyong- was entirely complicit in the trade, so ers. C4ADS recommends that sanctions yang to adopt more creative practices the only way to prevent the transaction practitioners look at how North Korea’s and elaborate networks. The value of the from taking place is to engage the sup- domestic economic policy changes

28. David Albright, Sarah Burkhard, and Spencer Faragasso, “Alleged Sanctions Violations of UNSC Resolutions on North Korea for 2019/2020: The number is increasing,” Institute for Science and International Security, July 1, 2020, https://isis-online.org/uploads/isis-reports/documents/North_Korea_PoE_sanctions_analysis_report_July_1_Final.pdf. 29. Albright, Burkhard, and Faragasso, “Alleged Sanctions Violations.” 30. David Albright, Sarah Burkhard, Spencer Faragasso, Linda Keenan, and Andrea Stricker, “Illicit Trade Networks: Connecting the Dots,” vol. 1, Institute for Science and International Security, February 2020, 95, https://isis-online.org/uploads/isis-reports/documents/Illicit_Trade_Networks_Vol1_Connecting_the_Dots_February_2020_FINAL.pdf. 31. Kuo and Arterburn, “Lux & Loaded.”

65 over time and how firms make purchas- and the limited utility of current export cratic freedoms may be less important in es domestically and abroad. control regimes to screen for luxury some of these countries but all of them shipments.32 The UN has made some want to build up their institutions. To The additional challenge with luxury distinctions, such as automobiles, for ensure the integrity of their finance and goods that are not specifically identified which enforcement is lacking, but other trade flows, it would be in their interest by the UN 1718 Sanctions Committee luxury items need clearer categorization. to enforce robust measures to counter (DPRK) or by member states is the defi- Member states need more robust export North Korean illicit behavior in their ter- nition. As noted, the UN defined all auto- control regimes to address the prob- ritories. The following recommendations mobiles for private transport as a luxury lem. In addition, member states need will hopefully assist authorities, regula- good but horses as livestock. When in to agree to automatically implement tors, and manufacturers to implement 2006 the UN first banned the export of UN mandates if they have not already more effective compliance: luxury goods to North Korea in Resolu- limited domestic authorities, laws, and • Member states need to create tion 1718, it delegated the responsibility regulations to capture UN mandates on robust export control regimes to of defining what constitutes a controlled identified items. categorize luxury goods appro- luxury good to member states. Subse- priately. quent resolutions added items to the list, automobiles among them. The distinc- RECOMMENDATIONS • Member states should abide by tion was clear for vehicles. It was not for UN mandates and scrutinize ves- horses, for which no definition exists. sels with suspicious behavior, fol- Enforcement of Security Council resolu- lowing the example of the Chong C4ADS and the Panel of Experts, mean- tions requires member states to do their Chon Gang when Panamanian offi- while, argue that luxury goods need part. Countries need to their en- cials detained the ship. The actions clear categorization. Between 2015 and forcement mechanisms to prevent North that set in motion this success story 2017, North Korea was able to smuggle Korea from taking any advantage of their may likely require foreign partners luxury goods from as many as ninety territories. Doing so requires resources, to work closely with US officials or countries. Product descriptions of con- time, and consistent commitment—and the UN 1718 Sanctions Committee. trolled items need to be better matched often sustained pressure from the United Financial institutions should adopt to HS codes, particularly for goods not States because sanctions are not self-en- • artificial intelligence models to clearly identified in any of the annexes. forcing. This is challenging and usually help combat the hidden codes of requires US political capital because oth- money laundering. Although not An additional challenge is North Korea’s er bilateral issues may crowd the agenda. infallible, AI helps detect cryptic ability to procure foreign goods despite If companies, financial institutions, and and suspicious SWIFT messag- sanctions. North Korea maintains access authorities take steps to preempt illicit ac- es, erroneous invoice numbers, to a vast array of luxury goods, procur- tivity from taking place, it could potential- duplicate or linked addresses, and other money laundering clues buried in the North Korea’s abuse of jurisdictions creates a permissive terabytes of trans- environment for other illicit behavior, eroding democratic actional data that financial institutions freedoms and trust in institutions. are responsible for monitoring. AI has the capability to process faster and analyze data tirelessly ing them from Western suppliers and ly save hundreds of millions if not billions for actionable intelligence 24/7. Its through third-party facilitators. C4ADS of dollars in North Korean illicit financial cost efficiency will benefit financial makes the distinction, however, between transactions. Pyongyang relies on front institutions in the long run. Instead general cross-border trade and high-end companies and illicit channels abroad to of training a staff of fifty to discern luxury items requiring a sophisticated help it to trade sanctioned commodities patterns of money laundering, procurement network. and import luxury goods. institutions pay a small team of five developers to code. Financial insti- C4ADS argues that enforcement has North Korea’s abuse of jurisdictions tutions have already been using AI been inadequate because of unclear creates a permissive environment for and other machine-learning tools definitions for luxury goods, inconsistent other illicit behavior, eroding democratic for almost three decades in fraud implementation across jurisdictions, freedoms and trust in institutions. Demo-

32. Kuo and Arterburn, “Lux & Loaded.”

66 NKEF POLICY AND RESEARCH PAPER SERIES 2021 management. They need to be Image 2. Chairman Kim Jong Un at anniversary parade widely adopted to prevent money laundering. This would capture suspicious transactions worldwide, not only in high-risk jurisdictions involving North Korea.

• US financial institutions should scrutinize clearing requests for US transactions from corre- spondent banks for shipments of high-end luxury goods involving freight forwarders in high-risk jurisdictions, particularly in loca- tions in China and Russia that are contiguous with North Korea. US financial institutions need to be more diligent about following up on any red flag requests.

• US financial institutions should be more diligent about knowing their correspondent bank relationships Source: Rodong/Sinmun/KCNA. as well as the patterns and trends plementation reports. In order to fa- • The Panel of Experts recommends of finance and trade in those net- cilitate information sharing among that member states and relevant works to better familiarize them- member states, the UN Panel of shipping and transportation com- selves with the red flags that may Experts should resume the practice panies adopt a thorough system pop up. This will help maintain the of consolidating export control lists for checking consignees, bearing speed of the US clearing system from member states and reproduc- in mind the risk of transshipment. if they are more familiar with the ing those lists in an appendix to challenges in specific regions each annual report. Member states while ensuring the integrity of the In conclusion, given how important should promulgate the aggregated US financial system.33 luxury goods are to the regime, robust export control list to relevant local sanctions enforcement in this space • Insurers and reinsurers should in- authorities for harmonization with offers a powerful legal instrument for clude contractual language requir- domestic export control systems, law enforcement, regulators, companies ing consistent AIS transmission, as like the U.S. Department of Com- to prevent abuse from North Korean required by the International Mar- merce Export Control Classification illicit activity. Efforts to disrupt the oper- itime Organization, to acquire and Number system.” ational networks that the North Korean maintain protection and indemnity regime requires to maintain its strategic • C4ADS recommends “the intelli- insurance and reinsurance. procurement capability will personally gence and defense communities frustrate Kim Jong Un, whose access to • Sanctions should be adopted as should consider the utility of pub- luxury goods, including well-tailored information becomes available licly available information (PAI) for suits (image 2), likely acquired in Sin- rather than only after the next Se- both the real-time identification of gapore or Hanoi during a meeting with curity Council resolution. Member North Korean sanctions evasion President Trump, will be hampered as states should also adopt the long and the production of analyti- he prioritizes the development of the overdue recommended set of cal products that can be rapidly country’s weapons programs above the designations proposed. shared with partner agencies or needs of North Koreans.  governments, including partici- • C4ADS and the Panel of Experts pants in the Proliferation Security recommend that the Security Coun- NOTE: The views and opinions expressed Initiative. Relevant stakeholders cil “delineate specific commodity in this paper are solely those of the author should identify opportunities to codes for export-controlled luxury and do not reflect the official policy or scale and accelerate collection goods and require member states position of the State Department or any and integration of PAI with tradi- to include export control lists for other agency. tional intelligence sources.”34 luxury goods in their national im-

33. Kuo and Arterburn, “Lux & Loaded.” 34. Kuo and Arterburn, “Lux & Loaded.”

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68 NKEF POLICY AND RESEARCH PAPER SERIES 2021 Biographies SANDRA FAHY Era (2019), Foreign Media into North Korea: Finding Synergy be- tween Pop Culture and Tailored Content (2016), and Cell Phones in North Korea: Has North Korea Entered the Telecommunica- Sandra Fahy is associate professor of anthropology in the tions Revolution? (2014). Prior to joining GWIKS, he was Senior Faculty of Liberal Arts and the Graduate Program in Global Researcher and the editor of the USKI Washington Review of the Studies at in Tokyo. She is the author of US-Korea Institute at Johns Hopkins University School of Ad- Marching Through Suffering: Loss and Survival in North Korea vanced International Studies. From 2008 to 2015, he was Senior (Columbia, 2015) and Dying for Rights: Putting North Korea’s Reporter for ’s Korean Service where he received Rights Abuses on the Record (Columbia, 2019). She has a “Superior Accomplishment Award,” from the Pacific written numerous policy papers and academic articles. She Division Director of the VOA. From 2003 to 2008, he was a broad- was awarded her PhD in Anthropology from the School of caster for ’s Korean Service. From 2001 to 2003, Oriental and African Studies, University of London in 2009. he was the Assistant Director of the Atlantic Council’s Program on Korea in Transition. He holds a B.A. and M.A. in International Relations from Seoul National University, and an M.A. in Interna- STEPHAN HAGGARD tional Relations and International Economics from Johns Hopkins University School of Advanced International Studies.

Stephan Haggard is the Krause Distinguished Professor at the School of Global Policy and Strategy at the University of Califor- ANDREA R. MIHAILESCU nia San Diego and director of the Korea-Pacific Program. He has written widely on the political economy and international relations of East Asia including Pathways from the Periphery: Andrea R. Mihailescu is a Nonresident Senior Fellow with the The Newly Industrializing Countries in the International Sys- Atlantic Council and currently on sabbatical from the U.S. De- tem (1990); The Political Economy of the Asian partment of State teaching Sanctions in International Relations (2000); and Developmental States (2018). With Robert Kaufman, at Pepperdine University’s School of Public Policy. Andrea was he is the author of and Democrats: Masses, Elites and a Member of the Secretary’s Policy Planning Staff at the State Regime Change (2016) and the forthcoming Backsliding: Dem- Department working on sanctions and CFIUS issues. Prior ocratic Regress in the Contemporary World. His work on North to that, she was assigned to the Department of Defense to Korea with Marcus Noland includes Famine in North Korea support Secretary Mattis on securing a multi-billion Special (2007), Witness to Transformation: Refugee Insights into North Measures Agreement with the Government of the Republic of Korea (2011) and Hard Target: Sanctions, Engagement and the Korea. Before the Pentagon, Andrea helped design and lead Case of North Korea (2017). Prof. Haggard currently writes for the North Korea sanctions program at the State Department the Korea Economic Institute Peninsula Blog. under the Obama Administration. Andrea was also an eco- nomic intelligence analyst in the Bureau of Intelligence and Research supporting senior State Department policymakers YONHO KIM by identifying economic pressure points in the Iranian regime. In that role, Andrea’s intelligence assessments were often in- cluded in the President’s Daily Brief and other senior level U.S. Yonho Kim is an Associate Research Professor of Practice and intelligence products. Before joining the government, Andrea the Associate Director of GW Institute for Korean Studies. He was a freelance journa list covering oil and gas issues. Andrea specializes in North Korea’s mobile telecommunications and U.S. was a Pat Roberts Intelligence Scholar. She is a graduate of policy towards North Korea. His research focuses on North Korea’s The George Washington University (MBA), American University cell phone usage, mobile money transfers, private transporta- (MA), and University of Connecticut (BA). tion services, marketization, information control and circulation, and changing media environment. He is also interested in US domestic politics and the Korean peninsula, US-ROK relations, JENNY TOWN and nuclear negotiations with North Korea. Kim is the author of North Korean Phone Money: Airtime Transfers as a Precursor to Mobile Payment System (2020), North Korea’s Mobile Telecommu- Jenny Town is a Fellow at Stimson and the Director nications and Private Transportation Services in the Kim Jong-un of Stimson’s 38 North, a website devoted to providing policy

69 and technical analysis on North Korea. She was named one the Southern Africa Development Community (SADC) Count- of Worth Magazine’s “Groundbreakers 2020: 50 Women er-piracy Assessment Group. Until 2013, he was responsible Changing the World” and one of Fast Company’s Most Cre- for developing and executing the national counter piracy ative People in Business in 2019 for her role in co-founding strategy. Neil obtained an MA in International Security and and managing 38 North. Ms. Town is the former Assistant Global Justice at Brooklyn College CUNY, is a graduate of Director of the US-Korea Institute at Johns Hopkins School of Stellenbosch University, the South African National Advanced International Studies where she focused on North Security Program (First place and best academic paper) and Korea, US-DPRK relations, US-ROK alliance, and Northeast the Joint Senior Command and Staff Course. He is a Senior Asia regional security. She is an expert reviewer for Freedom Contributor, Maritime Security for Compliance and Capacity House’s Index, where she previously Skills International (CCSI), and a Senior Research Associate worked on the Human Rights in North Korea Project. She is for Kings College London, United Kingdom – Project Alpha. an Associate Fellow at the Institute at SAIS, a Member of the National Committee on North Korea, and an Associate Member of the Council of . She DANIEL WERTZ serves on the Editorial Board for Inkstick, an online foreign policy journal for emerging scholars. Ms. Town holds a BA in and International Relations from Westmar Daniel Wertz is the Program Manager at the National Committee University and a Master of International Affairs from Colum- on North Korea (NCNK), where he has worked since 2011. Wertz bia University School of International and Public Affairs. manages research and publications at NCNK, and is also the lead researcher and editor of North Korea in the World, an interactive website exploring North Korea’s external economic and diplo- NEIL WATTS matic relations. He also serves as Chair of the Steering Commit- tee of George Washington University’s North Korea Economic Forum. Prior to working at NCNK, Wertz was a research assistant Neil Watts, formerly a Captain with 33 years’ service in at the U.S.-Korea Institute at the Johns Hopkins School of Ad- the South African Navy, specialized in surface warfare and vanced International Studies. Wertz received master’s degrees in weapons systems, serving nearly 20 years at sea. Neil has International and World History in a joint program from Columbia served as the Maritime Expert on the United Nations Security University and the London School of Economics, and a bachelor’s Council Panel of Experts (POE) for North Korea from 2013 to degree in History from Wesleyan University. 2018. He investigated sanctions evasion, illicit shipments and networks, tracking suspect vessels worldwide and uniquely boarded several North Korean and North Koreancontrolled LIUYA ZHANG vessels, starting with the Chong Chon Gang in 2013. Neil was also responsible for monitoring North Korea’s navy, which included the Sea Launched Ballistic Missile (SLBM) Liuya Zhang is a PhD student at Ohio State University. She re- program. He co-authored seven reports for the UN Security ceived her Bachelor’s Degree of Arts from Fudan University and Council and authored the Maritime Sanctions Handbook for Master’s degrees in International Studies from Seoul National the DPRK. Prior to joining the Panel, he served on the South University and International Affairs from the School of Global African National Maritime Security Advisory Committee, the Policy and Strategy, University of California, San Diego.  Priority Committee for Maritime Security, and as a member of

70 NKEF POLICY AND RESEARCH PAPER SERIES 2021 Acknowledgments The North Korea Economic Forum (NKEF) Policy and Research Paper Series on the North Korean Economy is a product of the Forum’s annual conference on “Researching North Korea: Sources, Methods, and Pitfalls” (Oct. 12~13, 2020). The conference and NKEF Policy and Research Paper Series have been made possible by generous support from the KDI School of Public Policy and Management.

This series analyzes issues and developments related to the North Korean economy, offering contributions that are relevant for both academic audiences and policy specialists. Papers within this series will cover a broad range of relevant topics, from North Korean economic history, to North Korean foreign trade and the impact of sanc- tions, to the dynamic interactions between markets and central planning in North Korea. Prospective authors who wish to publish in this series should contact the editor.

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