N.Korea’s Businesses Thriving in Russia

Mos Film Street, southwest of Moscow, Russia, Wednesday afternoon.

A black Benz with the red license plate of “087” passed by quickly. 087 is a number used exclusively for the sedans of North Korean diplomats. It was easy to tell that the North Korean embassy located on this street recently purchased the luxurious sedan.

A stylish Asian woman wearing black sunglasses and a shiny leather jacket was riding on its backseat.

“Beautiful women, who were not seen in the past, frequent the North Korea embassy. High ranking officials of the embassy seemed to have become richer,” said a Russian resident living near the embassy.

“The North Korean embassy has been full of life since the latter half of 2006 because of the increased number of North Korean workers sent to Russia, diversified businesses and growing efforts to secure energy supplies,“ said North Korean defectors that the Dong-A Ilbo report team met in Moscow.

○ North Korean Businesses to Expand From Primorsky to Moscow

The North Korean leadership’s determination to expand businesses can also been seen from the Primorsky region which shares the border with North Korea.

In an annual report in February, Sergei Darkin, governor of the Primorsky region, said, “The state government has decided to invite working officials this year for the Asia-Pacific Economic Cooperation summit to be held in Vladivostok in 2012. North Korean leader Kim Jong Il has also promised to dispatch working-level officials.”

“The role of delegates will be figuring out how many people should be dispatched for the construction of the conference venue. Kim Jong Il is the only foreign head of state mentioned in the report,” an official said.

In order to prepare for the APEC, the Primorsky regional government plans to issue work permits to 12,000 North Korean workers in 2008, four times higher than the number of those last year. A foreign national, who has hired North Korean workers, said, “North Korean senior officials are lobbying fiercely in order to increase the quota for laborers. They even arrange free tours of North Korea for Russian government officials.”

As it becomes increasingly difficult for them to find a job in Primorsky, North Korean workers, who came to this region last year, have begun to move to Moscow and smaller cities where construction businesses are still booming. North Korean defectors estimate that about 1,000 to 5,000 North Korean workers have left Far East Russia to find a job in cities around Moscow.

○ North Korean Companies All Over Russia

Recently, North Korean companies, such as Daedong River, Neungra, Baekdu and Goonpyo, have established their offices in many parts of Russia.

A 39-year-old North Korean defector who has stayed in Russia for 12 years said, “I believe, out of the 49 Russian provinces, North Korean firms have established their offices in about 30 provinces. Some 90 percent of them are responsible for overseeing North Korean workers.”

Joint ventures between Russia and North Korea, which went into hibernation after the United States froze North Korea’s account at Macau’s Banco Delta Asia in 2005, have recently resumed their activities. “Joint companies, which were active in the early 1990s, such as Dongbang Seafood and Far East Marine Transportation, have resumed their businesses,” said one Korean-Russian residing in Nakhodka.

Officials say that business expenses of North Korean companies in Russia come from the North Korean workers’ pockets. “North Korean companies, which are spread across Russia, have been collecting about $400 to 500 from each North Korean worker every month. It is then used as high ranking officials’ business expenses,” said a 46-year-old North Korean defector.

“The discontent of workers is growing because high ranking officials dine out at fancy restaurants and their wives purchase expensive clothes with money earned by them,” added the defector.

○ Diversifying Businesses and Huge Bribes

At a hotel in downtown Moscow, Sunday, a senior official of a North Korean company was learning how to establish and run a restaurant business from the Russian manager of a restaurant.

“He kept asking me how much it would cost to run a restaurant, and how much profit it can make,” said the manager after the North Korean left.

Pyongyang’s effort to diversify its businesses in Russia has become the talk of the town among Russian retailers. “I was at a loss when, all of a sudden, North Korean people came up to me and asked me to buy a snake liquor,” said a Russian employee of a food chain store.

Big players, who deliver a large sum of bribes to Russians, have also recently emerged. A captain of a North Korea freight ship was caught March 12 on site while shipping 100 tons of crude oil without reporting to customs at the Slavyanka shipyard, southern Vladivostok. It was found that the captain gave $45,000 to the president of the crude oil storage company as a kickback.

“The case made the headline only because the amount of the kickback was huge. In fact, it is a secret that everyone knows among Russian civil servants that North Koreans have been aggressively lobbying us with bribes,” said a public official of Vladivostok. “North Korea will unlikely stop giving bribes for large scale. projects.”