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China arrests N. Korean trade official for illegal currency transaction

A North Korean trade official was recently arrested by Chinese police while attempting to illegally exchange foreign currency. The arrest prompted a flurry of activity not only from the North Korean consulate in China but also from the North Korean foreign ministry.

Speaking on condition of anonymity, a source in China told Daily NK last Wednesday that a North Korean trade official identified as “A” was arrested by Chinese police in January while attempting to illegally exchange foreign currency through a private money changer.

“A” was an official of a major trading company under the North Korean government who had been handling import and export business in China for several years.

The official had worked with a private money changer to convert USD 1 million into Chinese yuan.

China limits the amount of foreign currency that foreigners can exchange to RMB 50,000 (around USD 7,000).

Since North Korean trade officials in China cannot expect much profit from exchanging money at official banks, they sometimes exchange money illegally by working with private money changers instead of official banks.

Assuming that USD 1 million is converted into Chinese yuan at one time, a private money changer could make RMB 10,000 – 20,000  (USD 1,390 – 2,780) more profit than an official bank, the source explained.

It was not clear whether the North Korean trading company had instructed “A” to exchange the money illegally to maximize the currency’s appreciation, or whether “A” had gone to the private money changer on his own, hoping to pocket the difference.

But given that USD 1 million is more money than a single trade official would normally have access to – and the fact that the North Korean consulate got involved as soon as “A” was arrested by Chinese police – it appears that the North Korean trade company itself was behind the illegal currency exchange.

“Trade officials working in China often work with amounts ranging from hundreds of thousands to a million dollars. [But individuals aren’t able to exchange these amounts on their own, and [“A”] was probably following orders [from his superiors],” a source in North Korea told Daily NK, speaking on condition of anonymity.

Another possibility that has been raised is that “A” resorted to illegal currency exchange not only to profit from currency spreads but also for money laundering.

Since dollars are widely used for trading purposes, there would normally be little reason to convert dollars into Chinese yuan. In addition, the fact that “A” attempted to exchange the large sum of USD 1 million in cash has led to speculation that he was attempting to launder illicit profits.

A flurry of activity

North Korean consular officials went to various Chinese police stations in an attempt to investigate the incident and take “A” into custody.

“A foreign ministry staff member was rushed from Pyongyang to China to deal with the incident,” a source in China noted, demonstrating that North Korean authorities were not only aware of the incident but were proactive in seeking an amicable resolution.

“A” was turned over to North Korean authorities, but the money he attempted to exchange was not returned.

“When someone is caught making an illegal currency exchange in China, the entire amount is confiscated. It won’t be easy [for North Korea] to get the confiscated money back, even if the government is directly involved,” the source said.

Translated by David Carruth. Edited by Robert Lauler.

Please send any comments or questions about this article to dailynkenglish@uni-media.net.

Read in Korean

February 19, 2024 at 07:00AM

by DailyNK(North Korean Media)

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