source: DailyNK
Remittance fees increase as North Korean police demand bribes
If a defector living in South Korea sends 1 million KRW (approximately 930 USD)
to their family in North Korea, on average an estimated 100,000 KRW ends up going to a
South Korean broker, 150,000 KRW goes to a Chinese broker, 200,000 KRW goes to a
North Korean broker, and 200,000 goes to the Ministry of State Security or
Ministry of People's Security. This means that the defector¯s family ultimately
receives about 350,000 KRW from the transaction.
Despite being illegal, North Korea’s Ministry of State Security actively facilitates foreign remittances to earn money, while officers from the Ministry of People’s Security have also recently entered into the dynamic as middle men.
“Sending foreign remittances is officially designated an anti-socialist act by the state, but now the activity is becoming more common,” said a North Hamgyong Province source during a telephone call with Daily NK on April 13. “That’s because the regulatory agencies are earning bribes by facilitating them.”
“Some of the remittance brokers choose not to work with the Ministry of State Security (MSS) or the Ministry of People's Security (MPS) and try to secretly send funds, but surveillance has been strengthened and so many who try this are discovered. For this reason, most brokers choose to work with the agencies, lacking a better alternative,” the source explained.
In this manner, North Korea’s MPS and MSS - tasked with guaranteeing safety and security- are earning significant amounts of money by becoming involved in activities deemed by the authorities to be illegal.
Lacking the ability to control the remittance market in its entirety, there are rumors that the North Korean authorities have secretly issued orders to skim money from the remittances instead.
“MPS officers are openly approaching the families of defectors and demanding money. In doing so, they are able to net some of it for themselves as well,” a source in Ryanggang Province added.
“The officers demand the funds on the pretext of offering to help identify missing persons. The local station knows about the situation, but it also receives a portion of the proceeds, so there’s no interference.”
The North Korean brokers do not see the arrangements as unviable. Because government officials have been paid off, the remittances are safer and the brokers themselves do not lose any money on the deal. The only people who are worse off are the defectors and their families.
According to both sources, the fees for sending remittances are 15% to the Chinese broker and 20% to the North Korean broker. These current commission rates represent an increase of 10% of the total fee compared to the past. South Korean brokers add an additional 10%, while the relevant law enforcement agency takes 20%.
“In the end, North or South, a large amount of the money being sent ends up being absorbed by fees. We look at this phenomenon as an unfortunate consequence of separation,” the Ryanggang Province-based source said.
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