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.