How NGOs in North Korea continue to face major sanctions-related hurdles
Leaked documents further reveal bureaucratic obstacles to aid work
The handful of foreign aid organizations still working inside North Korea are navigating an increasingly complex operating environment under the byzantine tangle of multilateral sanctions currently in place, according to three separate internal European Union documents reviewed by NK News.
In one – the minutes from a 25 April meeting in Brussels of NGOs that have resident North Korean offices – a European Commission policy officer conceded that the “mixed regime of heavily intertwined sanctions by EU and UN make implementation and particularly requests for derogations complicated.” There are no U.S. charities resident in Pyongyang at this time.
Part of the problem is the lack of specificity in certain aspects of the sanctions, according to the transcript. Different organizations, and people within those organizations, also have varying interpretations of the regulations, which can be extremely difficult for legal laypeople to understand.
Another document seen by NK News, a 23-page EU internal report marked “CONFIDENTIAL,” reveals that access to cash and finding suppliers that remain willing to do business with any entity connected in any way to North Korea—even a European one covered by a humanitarian exemption—are among the biggest obstacles aid groups in the DPRK face right now.
A third document covers official UN agencies working in North Korea, which largely face the same issues as their NGO counterparts.
The contents of the three sets of documents have not been previously reported on. When viewed as a collection, in addition to previous reporting by NK News which explored how sanctions have, and haven’t, affected aid organizations operating there, they combine to provide an intimate picture of how charity work at the moment does (and doesn’t) get done in the DPRK.
One NGO reported difficulties in importing construction material for hospital renovations | Photo: UNICEF
The Korea National Insurance Corporation (KNIC) is under EU, UN, and U.S. sanctions for generating illicit revenues reportedly used to fund the North’s nuclear weapons program, and its assets were frozen in August of last year.
Yet, all NGOs in North Korea need to do business with the firm—in what would normally be a blatant sanctions violation. It’s mandatory for nonprofits to insure their vehicles in the DPRK, and KNIC is the only insurance company in the country. One nonprofit applied for an exemption in March of this year, which was approved the following month. Typically, the NGO says it takes between two and four weeks for their requests to be answered by its country’s finance ministry.
“In all, the operational impact has so far been limited as we have managed to navigate the sanctions regime in place,” the NGO says in one of the documents.
“The process remains however time consuming, and requires constant work on understanding the past and new regulations…We receive very little guidance on the sanctions regime in place, neither from our national authorities, or the United Nations or other stakeholders.”
Although some of the sanctions are intentionally vague to allow for some wiggle room in special situations, one source with intimate knowledge of the situation told NK News that aspects of others have reached the point of “absurdity.”
The regulations, of course, don’t allow anything nuclear-related to be exported to North Korea. Dual-use technologies with both civilian and military applications are also prohibited.
But the source also pointed out that items like wigs, false beards, eyebrows, and eyelashes, men’s and boys’ underpants, briefs, nightshirts, pyjamas, bathrobes, and dressing gowns, vacuum cleaners, hairdryers, toasters, rear-view mirrors, windshield wipers, kites, cricket balls, slippers, peaked caps, cordless phones, burglar alarms, and playing cards can’t be brought into the country.
“For all these imports, we require in theory an authorization from our national authorities in Europe for the import process,” said the source. “And this was before the last UN sanctions which prohibit broadly all machinery, metal, and vehicles.”
“The process remains… time consuming, and requires constant work on understanding the past and new regulations”
To this end, French NGO Handicap International (HI) has had “huge difficulties in procuring items such as mobility and assistive devices (wheelchair, tricycles, crutch, cane etc.) and construction material for renovation (of health facilities, schools for children with disabilities, emergency safe shelter etc.) from China as most of them are somehow made of or [contain] metal and iron,” the organization says in another document reviewed by NK News.
The Swedish Red Cross says in one of the documents that overall project operations are not largely impacted by the present sanctions because their people have been able to navigate the tricky logistics involved.
Yet, water pipes and fittings, agricultural equipment and greenhouse frames made of steel, a sanctioned commodity, have reportedly been difficult for the Swedish Red Cross to get cleared by Chinese customs.
According to UNICEF, a shipment of insecticide meant for the DPRK malaria eradication program has been held up in India since December, while the supplier waits for pre-approval by Chinese customs. The organization also has a digital X-ray machine on hold in Europe, as Chinese authorities rejected it as a “dual-use” item.
And the FAO, the UN’s Food Aid Organization, is still trying to get an exemption letter from the UN Sanctions Committee before Chinese customs will let them ship 230 portable water pumps into the DPRK.
Sometimes, getting it into North Korea isn’t the issue. Getting it to North Korea in the first place is.
The World Health Organization, for example, didn’t have a problem procuring three GeneXpert TB testing machines and 4000 testing cartridges, but they did have a problem finding a shipper to take them to Pyongyang.
What every organization needs, but can’t get, is cash. It is a major sanctions violation simply to do business with a North Korean bank, and only a small number of financial institutions have been willing to chance getting involved at all, even with a legitimate humanitarian exemption.
“Bank of China where many agencies have accounts held are refusing to make foreign currency payments to DPRK nationals,” one of the documents obtained by NK News says.
Handicap International, for one, has had several payments to Chinese suppliers refused by Chinese intermediary banks since the beginning of 2017.
“The closure of banking channels leads UN agencies and partners to adopt cash conservation measures, which in turn drastically reduce the volume of humanitarian activities carried out in country, and the ability of humanitarian agencies to monitor those activities through field monitoring visits,” reads the document.
Without access to the global banking system, foreign nonprofits in North Korea are forced to carry cash into the country by hand to pay their local operating expenses.
What every organization needs, but can’t get, is cash
In one of the leaked documents seen by NK News, one NGO says it brings roughly €30,000 into the country each year to cover local expenses. Any amount higher than USD$5000 is supposed to be declared to Chinese customs officials before transiting to Pyongyang.
But when Chinese officials refused to even take a declaration the first time, an employee of the organization carried in an amount above that, they simply stopped reporting it.
Every expat from another organization that travels home is sent back with a small amount of cash on their person. The money is declared first in France, then again in China, and finally when the employee gets to the DPRK.
“It remains a risk for the expatriate carrying the cash,” the NGO says in one of the files.
Welthungerhilfe, the venerable German charity, is the only NGO in North Korea that has insurance for both the money and the person carrying it.
It may seem strict, but that’s really the point, a second source close to the situation but asked not to be identified told NK News.
“This is kind of what these resolutions are meant to do, to inspire institutions to do their own due diligence,” the source said.
“Not to make it impossible for humanitarian groups to do their work, but to increase vigilance and the level of caution that the banks are taking is really, really pronounced.”
Doing business that involves North Korea in any way is not something a lot of vendors and banks are willing to do | Photo: UNICEF
According to one of the files shared with NK News, French NGO Triangle Generation Humanitaire (TGH), which has provided a variety of services in North Korea since 2000, is largely fulfilling its mission while facing the same issues all as the others.
Transporting cash into the country is a hassle, and carrying large amounts of cash around on a regular basis can be a bad idea for several reasons, but as an obstacle it has been far from insurmountable for TGH.
The organization has faced delays of more than two months in receiving deliveries from suppliers, again due mostly to shipments getting held up by Chinese customs. Other times, vendors have pulled out even after winning a tender bid because of perceived risk exposure, and the runner-up happens to charge significantly more for the same product or service.
On a broader level, the documents reveal that fewer companies are responding to tenders these days. Doing business that involves North Korea in any way is not something a lot of vendors, banks, and the like are willing to do.
“Somebody must go to Beijing to bring our money”
For example, when Germany’s Hanns Seidel Foundation tried to move funds from its German bank to an account it had at a bank in South Korea, the German bank refused because the paperwork HSF filled out to make the transfer said the money was for a project in the DPRK.
The most visible NGO to say it was leaving North Korea because sanctions made it too difficult to operate was Save The Children, which last April began winding down its operations in the DPRK.
Notwithstanding the sanctions themselves, Save the Children is quoted in the documents as saying it was “the limited understanding of humanitarian exemptions from the banking sector and suppliers in neighboring countries” that made it impossible for them to do their jobs.
More generally, foreign residents of Pyongyang describe similar hurdles, with a few notable variations on the common themes.
Tammam Sulaiman, Syria’s ambassador to North Korea, must navigate two sanctions regimes simultaneously: one against his home country, and one against the country in which he works.
Sulaiman says it is impossible for him and his colleagues at the Syrian embassy in Pyongyang to transfer funds into the country for their operating budgets, and receiving their salaries is also an issue.
“Somebody must go to Beijing to bring our money,” Sulaiman told NK News.
Lately, the Syrians (and others, apparently) have also had trouble with their diplomatic pouches, although Sulaiman blames this issue on China.
“DHL used to take it every week, but now they said Chinese customs refused to take the mail,” said Sulaiman, who has been posted in Pyongyang for the past five years.
“Other embassies who deliver their pouches to the airport and send it as unaccompanied baggage through Air Koryo, neither gets in as of a couple weeks ago.”
But while he may have trouble getting his paycheck in North Korea, sanctions haven’t made it any more difficult to find imported, as well as increasingly large numbers of locally-produced, consumer goods in Pyongyang hard currency shops, explains Sulaiman.
He has seen new brands of DPRK-made coffee appearing on store shelves of late, in addition to a range of domestically-produced fruit juices.
That is, when the store’s cashier will take his payment.
For some reason he has not yet figured out, Sulaiman says hard currency shops in Pyongyang have recently been specifically refusing to accept worn or used-looking U.S. dollars.
“If there is a dollar that is a little bit scratched or torn, if they think it is old, they will not take it,” Sulaiman says. “One time they didn’t even take a folded $100 bill. When my colleague goes to Beijing, he brings only new dollars, not used ones.”
Edited by Oliver Hotham
Featured image: UNICEF