In the News – U.S. ‘concerned’ about N. Korea’s inertia in fighting money-laundering: report

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In the News – U.S. ‘concerned’ about N. Korea’s inertia in fighting money-laundering: report

By Lee Chi-dong
WASHINGTON, July 31 (Yonhap) — The U.S. government expressed concern Tuesday about North Korea’s refusal to improve its regulatory system against money laundering and terrorism financing.

“The Financial Action Task Force (FATF) remained concerned about the DPRK’s failure to address the significant deficiencies in its regulatory regimes,” the State Department said in its annual report on terrorism. DPRK is the acronym for North Korea’s formal name, the Democratic People’s Republic of Korea.

The FATF, based in Paris, is an inter-governmental organization designed to develop policies to combat money laundering and terrorism financing.

The Country Reports on Terrorism 2011 revealed that Pyongyang “engaged the FATF to discuss its anti-money laundering and counterterrorist financing regulatory regimes.”

While the FATF welcomed the initial engagement, the report said, there were no further contacts.

It was among the fresh issues covered by the report on North Korea, with most of others similar to those in previous publications.

The report reiterated that North Korea is “not known to have sponsored any terrorist acts” since the bombing of a Korean Air flight in 1987 in which 115 people were killed.

In 2008, the U.S. removed Pyongyang from the list of state sponsors of terrorism amid some progress in nuclear talks.

On South Korea, the report said the country’s security authorities have maintained close cooperation with their American counterparts in combating terrorism.

It said the FBI conducted a joint investigation with South Korea’s state intelligence agency and police into an international terrorism subject who had relocated to South Korea.

The South Korean authorities “provided information and monitored the subject until he departed the country.”

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In the News – Insight: A secret plea for money from a mountain in North Korea

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In the News – Insight: A secret plea for money from a mountain in North Korea

SEOUL (Reuters) – In May this year, a North Korean defector in her 40s took a call from an unknown number at her office in the South Korean capital Seoul.

It was from her brother, who she had not seen for more than a decade, calling illegally from North Korea after tracking her down.

He was speaking from a remote mountainside near the border with China, and was in dire need of money to help treat another sister’s late stage cancer, she said.

Accompanied by a Chinese broker, the brother had spent five hours climbing up the mountain, avoiding North Korean security and desperately searching for a signal on a Chinese mobile telephone. Contact with anyone in the South is punishable by death in North Korea, one of the world’s most isolated states.

The broker was part of a growing group of people, mostly Chinese of Korean descent, who use ties on both sides of the border to funnel money to the North, an illegal and highly dangerous operation.

At first, the defector in the South suspected a trick and demanded the caller answer a question that only her brother could know the answer to.

“I asked him to tell me the name of the train station where we were separated. I am now 40 and we were separated when I was 26,” she said, requesting anonymity for fear of reprisals against her family. “Then he said he needed money.”

Next morning, she wired 15,000 yuan ($2,400) to the broker’s account at a bank in China, near the border. His wife confirmed receipt of the funds, informed her husband, and the defector’s brother got money in North Korea, a state where the average income is estimated at just $1,200 a year.

Brokers typically charge up to 30 percent fees for such transactions, but by and large, they work well.

“I heard it only took 15 minutes for my brother to get the money (after funds were wired),” said the defector, who is officially listed as dead in North Korea. “Two days later, my brother called me back saying ‘Thank you. We will spend your money wisely’.”

The woman is one of the 23,000 defectors living in South Korea, with which the North remains technically at war after an armistice ended the 1950-1953 Korean War. Continue reading

In the News – N. Korean defectors fall prey to financial pyramid scams

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In the News – N. Korean defectors fall prey to financial pyramid scams

SEOUL, May 18 (Yonhap) — The National Police Agency (NPA) on Friday alerted North Korean defectors to the dangers of financial pyramid scams touting investment in Chinese real estate.

The alert was issued after several tens of defectors from the North fell for the fraud after being lured to invest large sums of money in China’s property development projects for huge, quick profits, the NPA said.

In a typical case, the defectors were told to invest 30 million won (US$25,570) in Chinese real estate and receive 3 million won in dividends after a month. They were also asked to recruit new investors for additional allowance payments, said the NPA.

The agency noted that the defectors failing to attract at least 10 new investors were forced to forfeit their initial investments.

The South Korean government provides each defector with a subsidy of 6 million won in cash in an effort to help them better assimilate, while they can also receive up to 13 million won to finance their housing.

The scammers mobilized various methods to deceive the defector investors, including on-the-spot tours and the introduction of fake success stories, and refused to draw up contract papers, citing China’s domestic laws regulating foreign property investments.

The NPA said it has sent warning text messages to North Korean defectors here and will continue to educate them about various financial scams.

 

Original article can be found here.