NK Report

Only at MHI-NK News: Mike Pompeo headed to Pyongyang for talks with Kim Jong Un, By Colin Zwirko Visit will be Secretary of State’s third to North Korea this year U.S. Secretary of State Mike Pompeo departed for Pyongyang early Thursday morning, Agence France-Presse reported. He is expected to hold talks with DPRK leader Kim Jong Un during his visit – the third meeting between the two men to take place in Pyongyang this year.It will also represent the most high-level North Korea-U.S. meeting since the June 12 Singapore Summit between Kim and President Donald Trump. Friday’s talks are expected to see Pyongyang and Washington further iron out the details of the June 12 agreement, particular as they relate to North Korea’s stated commitment to the denuclearization of the peninsula.U.S. Ambassador to the Philippines Sung Kim, who stepped in to lead denuclearization talks in the lead up to the summit, met with North Korean officials at Panmunjom over the weekend to prepare for Pompeo’s trip and discuss the next steps in negotiations over the North’s nuclear program.It was reported that head of the CIA’s Korea Mission Center Andrew Kim joined the meeting and delivered a letter from Trump to high-level North Korean official Kim Yong Chol, whom Pompeo met previously both in Pyongyang and during Kim’s trip to the U.S. in May. Pompeo’s visit comes a week after reports surfaced detailing concerns among U.S. intelligence officials that North Korea was not taking steps to dismantle its nuclear program and seeking to “deceive” Washington. Press Secretary Sarah Sanders on Monday refused to comment on the leaks.“We aren’t going to confirm or deny any intelligence reports,” Sanders said. “What I can tell you is that we’re continuing to make progress.” President Trump then said in a tweet on Tuesday that negotiations were “going well,” repeating that the lack of missile and nuclear tests over the past 8 months from North Korea was a sign of progress.White House Deputy Press Secretary Hogan Gidley also said on Tuesday that the U.S. has “already gotten so many concessions on the front end by North Korea.” Besides emphasizing the North’s promise to denuclearize – articulated in the June 12 agreement as a commitment “to work toward” complete denuclearization – Trump and other administration officials have focused on three main concessions, among others, when promoting the ongoing talks. These are the stated intention to halt all missile launches and nuclear tests, the release of three American prisoners in North Korea in May (which coincided with Pompeo’s last visit to Pyongyang), the North’s agreeing to return the remains of U.S. soldiers killed during the 1950-1953 Korean War.In addition to guarantees that the North is taking further steps towards nuclear disarmament, Pompeo also likely heads to Pyongyang in hopes of securing an update on the return of those remains. A spokesperson for U.S. Forces Korea (USFK) last week said 100 wooden caskets were delivered to the Joint Security Area at the North-South border, but no further actions have been confirmed since. On denuclearization, Pompeo may seek assurances to substantiate Trump’s June 20 claim that that the DPRK had already “stopped everything that you’d want them to stop” related to their nuclear program. Statements released by the State Department following last weekend’s working-talks at Panmunjom said that the Trump administration’s goal “remains the final, fully-verified denuclearization of the DPRK” – a semantic departure from previous U.S. calls for “complete, verifiable, and irreversible denuclearization” (CVID). On Tuesday, State Department spokesperson Heather Nauert said the U.S. is “not going to provide a timeline” – a response to comments by National Security Advisor John Bolton suggesting “the overwhelming bulk” of the DPRK’s nuclear program would be scrapped “within a year.” North Korea’s Kim Yong Chol meets ROK officials in Pyongyang, By Dagyum Ji Talks come amid a series of inter-Korean basketball games in DPRK capital Senior North Korean official Kim Yong Chol met with a visiting South Korean delegation in the DPRK capital on Thursday, the ROK press pool reported. The meetings come amid a series of inter-Korean basketball games in Pyongyang, which North Korean leader Kim Jong Un has not been able to attend, according to Kim Yong Chol, due to his travel schedule. Kim Yong Chol met five South Korean government officials, including Minister of Unification Cho Myoung-gyon, at 1020 local time at the Koryo Hotel. The ROK side was reportedly informed of the meeting at the last minute, forcing Minister Cho to cancel plans to cheer on the South Korean women’s basketball team. Despite Seoul on Wednesday saying it expected the North Korean leader to attend the match and meet the unification minister, the DPRK official during the meeting said Kim would likely not be able to visit the stadium. “Our Chairman of the State Affairs Commission may not be able to watch today’s match as he currently makes his on-site inspection in a provincial area,” Kim Yong Chol was quoted as having said during the talks at the Koryo Hotel. Kim Yong Chol serves as vice-chairman of the Central Committee of the Workers’ Party of Korea (WPK) and director of the United Front Department of the WPK Central Committee. He visited the South in February during the PyeongChang Winter Olympics, and in June traveled to the U.S. to meet with President Donald Trump at the White House. Speaking at a news conference following the meeting, unification minister Cho said the North Korean leader was spending the day in the Sinuiju region in the DPRK’s northwest.State media on Sunday and Monday reported that Kim had spent much of the weekend in the area, visiting a cosmetic factory and a Chemical Fibre Mill. Vice-chairman Kim Yong Chol told South Korean officials that the leader had asked him to meet them and convey his regret that he might not be able to attend the inter-Korean games. North and South Korean women’s and men’s team on Thursday played two “goodwill” matches divided into “Team Blue” and “Team Red” at the 12,000-capacity Ryugyong Jong Ju Yong Gymnasium in Pyongyang. Two Koreas yesterday held two mixed basketball matches, divided into “Team Peace” and “Team Prosperity.” The DPRK leader reportedly watched the games on TV. North Korean media outlet threats down in first half of 2018: data, By Hamish Macdonald Threat Index at the lowest level in first 6 months of the year since 2011 Aggressive rhetoric in North Korea’s primary news agency articles in the first six months of 2018 was at its lowest point since 2011, data from the KCNA Watch Threat Index suggested this week. The KCNA Watch website scans English language articles from the Korean Central News Agency (KCNA) daily and totals the number of aggressive words within the reporting, with the figure then divided by the number of articles published that day to provide a value. The list of aggressive words includes terms regularly used by North Korean journalists or editorial writers during times of heightened tensions. This week’s data reveals their presence in articles has dropped drastically compared to the same period last year – when tensions were significantly higher. According to the data, the first six months of 2018 registered a threat index measure of .266 – almost half of the .411 score registered for the same period in 2017. Despite the high reading in 2017, it represents only the second highest measure for aggressive content published on KCNA in the first six months of any year since 1998, with 2013 registering a score of .445 during a period of extreme tensions.The data points towards an emerging trend in DPRK propaganda since the beginning of 2018, a year which has seen markedly improved relations between North Korea, the U.S., and South Korea Kim Jong Un’s public appearances in May, June: the leader steps out, By Fyodor Tertitskiy The last two months saw a whirlwind of diplomatic engagements The June 12 summit between Kim Jong Un and Donald Trump was undoubtedly the key event of the two past months – and, perhaps, of 2018. Like April, these two months were dominated by diplomatic goings-on in the run-up to the summit, after which, Kim made another visit to China for a third summit with Xi. China increased oil product exports to North Korea in May: UN, By Leo Byrne Without more detailed trade figures, however, it’s unclear if shipments include fuels China tripled its oil product shipments to North Korea in May, the latest data reported to the UN 1718 Committee shows, though exports remained below historic levels. December’s UN Resolution 2397 saw the international body place limits on fuel exports to the DPRK, and, though the measures contain humanitarian exceptions, shipments of oil products,steel and other metals. North Korean vessel masks identity, involved in sanctions evasion: Japan, By Hamish Macdonald Tokyo reports continued sanctions breaches and evasion methods in East China Sea The Japanese Government on Wednesday published images of a North Korean vessel likely involved in prohibited ship-to-ship (STS) transfers in the East China Sea on June 29. It is the second occasion that Japan has issued reports of such activities occurring in June, with previous images being published on June 27 of a DPRK vessel likely conducting illicit STS transfers on June 21 and 22. According to the Ministry of Foreign Affairs (MOFA), a Japanese Maritime Self-Defense Force vessel – the JS Sendai – spotted the “AN SAN 1 (IMO number: 7303803), North Korean-flagged tanker… lying alongside a vessel of unknown nationality on the high sea (around 350km south-southeastern offshore of Shanghai) in the East China Sea.” “Judging from the fact that the two vessels lay alongside each other and connected hoses, both vessels could have been engaged in some type of activity. Following a comprehensive assessment, the Government of Japan strongly suspects that they conducted ship-to-ship transfers banned by UNSCR,” it added. On September 11, 2017, the United Nations Security Council (UNSC) unanimously adopted Resolution 2375, which, among other measures, prohibited all STS transfers. STS transfers linked to North Korea typically involve the transfer of oil products, which are also subject to caps under UNSC resolutions. The Japanese Government has publicly reported such prohibited activities on at least 8 occasions now in 2018.As in many of those other cases the ship involved on June 29 – the An San 1 – is already a sanctioned vessel, as is the company that operates it.Both the ship and the Korea Ansan Shipping Company were designated by the U.S. Department of the Treasury on February 23 in the largest set of maritime sanctions leveled against the DPRK. Both were subsequently sanctioned by the UNSC on March 30. In the UNSC designations listing, the 1718 committee identified the Korean Ansan Shipping Company as the “registered owner of DPRK tanker AN SAN 1 believed to have been involved in ship-to-ship transfer operations for oil.” In the images of the suspected STS transfer published on Wednesday, a ship of unknown nationality is seen connected to a vessel with the words Hope Sea painted on the back.“The Government of Japan confirms that AN SAN 1 camouflaged its vessel name as HOPE SEA and strongly suspects sanctions evasion,” the MOFA report added. The painting of the hull is an identity-obscuring method that has been observed in use by the DPRK previously when it has conducted STS transfers and such instances have been detailed by the UN Panel of Experts (PoE) tasked with monitoring DPRK sanctions implementation. In its 2018 report, the PoE describes an STS transfer involving two vessels – the Jin Hye and the Chon Ma San – in the East China Sea in early December 2017. “The Chon Ma San disguised its identity by painting the names ‘Whale’ and ‘Freetown (Sierra Leone)’ over the original name and port of registration and changing the ‘3’s to ‘8’s in the IMO number on the superstructure (8660313 to 8660818),” the PoE report reads. “The flag of the Democratic People’s Republic of Korea on the funnel was also painted over with white paint,” it added. As the U.S. Treasury released a package of extensive maritime sanctions on February 23, the U.S. Coast Guard also published a sanctions advisory notice to inform on North Korean evasion methods. “North Korean-flagged merchant vessels have physically altered their vessels to obscure their identities and attempt to pass themselves off as different vessels,” the notice warns. “These physical alterations include painting over vessel names and IMO numbers with alternate ones,” it added. Two Koreas agree to joint action on forest cooperation, pest control, By Dagyum Ji Joint statement follows a day of working-level talks at Panmunjom North and South Korea on Wednesday agreed to take joint action on forest disease and pest control on the inter-Korean border and to push forward with cooperation projects on forest composition and protection.The joint press statement follows a day of working-level talks between the two Koreas on forestry cooperation, which began at 1000 local time at the Peace House on the southern part of the truce village of Panmunjom.“The South and the North agreed to hold discussions on forest creation and protection and to carry out cooperation projects,” the statement read. The projects include modernization of tree nurseries, agroforestry, joint action on forest fire prevention, and erosion control work. Seoul and Pyongyang also agreed to mutually cooperate in controlling forest disease and pests, according to the statement. To this end, the two Koreas will take joint action “at the inter-Korean border region and areas that need pest control work.” The South Korean side will also take measures to control forest disease and insect pests following an on-site visit to the area later in the month. Wednesday saw Seoul and Pyongyang agree to “cooperate in the field of forestry science and technology, including exchanges of scientific and technological achievements in forest creation and protection.” Seoul and Pyongyang dispatched three-member delegations to the talks. South Korean Deputy Minister for Korea Forest Service (KFS) Ryu Kwang-su and vice director-general of the General Bureau of Forest under the Ministry of Land and Environment Protection Kim Song Jun served as chief delegates. Senior official from the DPRK National Economic Cooperation Committee Ryang Ki Gon also participated in the meeting. In March, the South Korean government-run Korea Forest Service agreed to push forward a project analyzing deforestation and broader environmental trends in the DPRK – the first of its kind in ten years. North Korean leader Kim Jong Un has also publicly expressed support for reforestation projects, in 2015 calling on “the Entire Party, the Whole Army and All the People Conduct a Vigorous Forest Restoration Campaign to Cover the Mountains of the Country with Green Woods.”in February that the DPRK army and people “have achieved successes in the three-year forest restoration campaign.” Kim also called for reforestation efforts in his 2018 new year’s speech.The two Koreas agreed to decide the dates and venues for sectoral talks, including on forestry cooperation, as a result of a high-level meeting on June 1. North and South Korean officials also held separate talks on railway and road cooperation last week. How the famine years prompted North Korea’s first real enterprise reforms, By Peter Ward Economic crisis saw some companies turn to financial self-reliance – with little success Although largely unnoticed and still basically unknown outside the country, the early 1990s witnessed a revolution in the way North Korean state-owned enterprises (SOEs) were managed. The North Koreans emulated China and went far further, before they even had a name for what they were doing: “Grasping the big, letting go of the small” (抓大放小). Back in 1997, the Chinese government released ,control over a large number of smaller SOEs, privatizing them, while maintaining state control and support for enterprises in strategic industries – heavy industry, defense, telecommunications, transport et al. Smaller SOEs were privatized and left to the market, while larger firms in important sectors were often further enlarged through mergers, becoming the bedrock of galloping industrial output growth and multi-decade long boom in infrastructure investment. The story for North Korea could not have been more different, but in a strange and important way, the DPRK government pursued a policy that was eerily redolent of this in the lead up, during, and following the famine: let the small or insignificant enterprises fend for themselves (“practice self-reliance”) – this often involved markets – while maintaining full control over the major nodes of state economic power. THE STALINIST SOE Until at least the late 1980s, civilian North Korean enterprises had their budgets set and controlled by and through the central bank – or through a few other state banks. Prices and budgets were controlled centrally, with factory managers having little autonomy (at least on paper) in wage and price setting, or over how the funds that their enterprises held were spent. In actual fact, their budgets were directly provided by the state, with even “liquid funds” (working capital) being controlled and managed by the state via the state banking system. The state would provide all the funds an enterprise needed for its operations and take all its profits at the end of the planning period (SOEs in such a system are called “state enterprise budget system enterprises”). A previous attempt at reform in the mid-1980s had led to the creation of ‘industrial combines’ – SOE conglomerates – that were supposed to have some autonomy on price setting, wages, and budgets (“independent cost accounting system enterprises”). However, in practice, Kim Il Sung was not enthusiastic about some workers getting paid large bonuses, or SOEs being allowed to engage in actual market activities with one another. Thus, the beyond the rhetoric, from what we know the central state banks and planning apparatus maintained tight control over the daily operations over SOEs. The latest from the podcast : Political risk and investment in North Korea – MHI-NKNews Podcast ep.26  Three experts discuss foreign investments and the future of the DPRK market With genuine reform and opening up being discussed seriously in policy circles in Seoul and elsewhere, what investment opportunities and risks exist in North Korea? South Korean wealth managers are scrambling to take advantage of the recent détente between Pyongyang and Seoul, with land values in some places near the DMZ more than doubling in the span of a few weeks. Major companies like Samsung and Hyundai have already begun rounding up research teams to explore inter-Korean economic cooperation. In this podcast, we learn from three Korea experts about the long-term prospects and the challenges that exist for genuine change in Pyongyang. This week’s guests: Dr. June Park is currently a research fellow at the Key Research Institute and Northeast Asia Center of Seoul National University. Dr. Tony Michell has been involved in projects in North Korea going back to 1993, including assisting Western investment into the free economic zone of Rajin-Sonbong. Dr. JR Kim is Director of Planning and Research at the South Korean Ministry of Unification (MOU)’s North Korean Human Rights Center. Formerly, he was an MOU spokesperson and its Director of International Cooperation. About the podcast: The “North Korea News Podcast” is a weekly podcast hosted exclusively by MHI-NK News, covering all things DPRK: from news to extended interview with leading experts and analysts in the field and insight from our very own journalists

Top MHI-NK Stories from around the web: Top diplomats of S. Korea, Japan, U.S. to meet next week (Yonhap News)   The foreign ministers of South Korea, Japan and the United States will meet in Tokyo next week, Seoul’s foreign ministry said Wednesday. The talks, to be held Sunday, will follow U.S. Secretary of State Mike Pompeo’s trip to Pyongyang, which is scheduled to start Thursday. South Korean Foreign Minister Kang Kyung-wha will hold bilateral talks with Pompeo to listen to the outcome of her U.S. counterpart’s trip to North Korea. The meeting will be followed by three-way talks involving Japanese Foreign Minister Taro Kono. “At the South Korea-U.S. and South Korea-U.S.-Japan foreign ministers’ talks, Minister Kang will listen to the outcome of Secretary Pompeo’s North Korea trip and hold in-depth discussions on ways to achieve the goals of complete denuclearization of the Korean Peninsula and the establishment of permanent peace,” the foreign ministry said. The three-way talks will be the second of their kind to be held in less than a month. The top diplomats of the three countries met in Seoul on June 14, two days after U.S. President Donald Trump and North Korean leader Kim Jong-un held a historic summit in Singapore. S. Koreans’ favorable sentiment towards N. Korea hits record high: poll (Yonhap News) The poll of 1,000 adults nationwide by the Asan Institute for Policy Studies measured the level of favorable impression of North Korea at 4.71 on a scale of 0 to 10, the highest figure since the survey was first conducted in 2010. The survey, which was carried out by Research & Research on June 18-20 at the behest of the Seoul-based institute, has a margin of error of 3.1 percentage points and a 95 percent confidence level. The level of South Koreans’ favorable feelings towards the U.S., China and Japan stood at 5.97, 4.16 and 3.55, respectively, the Asan Institute noted. It is the first time in the Asan polls that North Korea’s favorability was higher than that of China. Also, it is the first time in about four years that North Korea was more favored by South Koreans than Japan. In a similar result, the favorability score for North Korean leader Kim Jong-un was 4.06, compared with 2.04 for Japanese Prime Minister Shinzo Abe, 3.89 for Chinese President Xi Jinping and 5.16 for U.S. President Donald Trump, the Asan poll found. It showed 62.6 percent of the respondents believing that the recent North Korea-U.S. summit agreements will be implemented well. The institute also noted changes in the level of public trust towards Pyongyang. In a 2013 survey, only 10.7 percent of South Koreans expressed trust for North Korea. In this year’s poll, however, that number surged to 54 percent. For the U.S., a frustrating history of recovering human remains in North Korea(Washington Post) The white marble headstone in Arlington National Cemetery memorializes Victor I. Gallerani, sergeant in the U.S. Army in Korea, recipient of a Purple Heart. But no one is in the grave below. The dates on the headstone are at least partly correct. Gallerani was indeed born on Jan. 10, 1931. Whether he died on Nov. 28, 1950, is a mystery his family has wanted to solve for decades. No trace of him ever came home. Gallerani’s family is one of thousands hoping the U.S. government will soon recover and identify the remains of their loved ones from North Korea, after wondering for decades what exactly happened on the long-ago battlefields of the Korean War. “I know how much my parents would have wanted to know,” Gallerani’s sister, Jean Waite, said of the big brother she bid goodbye to when she was 11. “To have it happen while I’m still alive to see it — I would be very happy about that.” At their historic summit last month, President Trump and North Korean leader Kim Jong Un committed to recovering more American remains, including the “immediate repatriation of those already identified.” Their statement raised hopes that as many as 200 sets believed to be ready for transfer could be collected in coming days and possibly more in the near future. But the up-and-down nature of past efforts suggests the process could be fraught with pitfalls, including a mixed record of cooperation from the North Koreans. Any successful repatriation also will face the laborious identification process that has dragged on for years with the remains already in U.S. possession. “They use remains as bait,” Danny Russel, a career diplomat who focused on North Korea for both the State Department and White House during the Obama administration, said of the North Koreans. “They use them to sort of chum the water.” The Pentagon estimates nearly 7,700 U.S. troops are unaccounted for from the conflict, including 5,300 believed to have been killed north of the 38th parallel, which marks the border between the two Koreas. The U.S. military has not recovered remains directly from North Korean officials since 2005, when the administration of George W. Bush stopped the program as tensions between Washington and Pyongyang rose. DPRK urges Japan to change hostility before any ties improvement (Global Times) The Democratic People’s Republic of Korea (DPRK) has urged Japan to change its anti-DPRK policy as a precondition for improving relations after Tokyo expressed its intention for a summit meeting with Pyongyang. The official Korean Central News Agency (KCNA) said in a commentary Tuesday that Japanese Prime Minister Shinzo Abe reportedly set “Japan-DPRK summit as a top diplomatic task,” according to Tokyo Shimbun on July 1. “But its act is quite contrary to its zealous assertion,” it said, pointing out that Tokyo is still “calling hoarse for sanctions and pressure on the DPRK while keeping faulting the DPRK over ‘abduction issue.'” The KCNA said Abe, while speaking before the independent Dietmen’s group sometime ago, called for “keeping current sanctions until North Korea (DPRK) takes specific steps toward denuclearization.””This indicates his anti-DPRK hostility despite his lip-service for ‘dialogue,'” it said. DPRK has rejected Japan’s claim that Pyongyang “abducted” some Japanese citizens in 1970s. British veterans welcome North Korean return of remains from Korean War (The Telegraph) British veterans have welcomed reports that North Korea is willing to return the remains of servicemen killed during the Korean War and hope that some of the 336 Britons still listed as missing in the conflict might soon be handed over at the border truce village of Panmunjom. Pyongyang is presently in discussions with the United States over the return of around 200 sets of remains that have been found in the North since the end of the three-year Korean War in 1953. Mike Pompeo, the US Secretary of State, is due to return to Pyongyang this week for direct talks with Kim Jong-un, the North Korean leader, over the creation of a firm timeline for North Korea to abolish its nuclear research capabilities and its stockpile of nuclear warheads. Caskets have already been delivered to the North and Pyongyang is expected to release the remains as a show of good faith in ongoing discussions that many analysts are claiming have lagged due to deliberate foot-dragging by Kim’s regime. While the majority of those remains are likely to be of US military personnel, veterans here believe they may include British troops because many were issued with US equipment and record-keeping at prisoner of war camps where troops died and were buried was virtually non-existent. Even if this first exchange of remains does not include British troops, the veterans say, warming ties across the Demilitarised Zone means that more sets of remains could be returned in the future. And they insist they will go to the funerals of any of their former comrades-in-arms, wherever they are finally laid to rest. Among those missing men with no known grave are Corporal R.D. Weaver, a regular soldier, Private A.D. Maile, a National Serviceman thought to have joined in June or July 1949, and Private W. Philpot, who was wounded and captured and never seen again. “It has been a long time since these men went missing and I expect it will be difficult to identify them after all these years, but everything should be done to confirm their identities and give them the burial they deserve”, said Sam Mercer, who was a private with the Gloucester Regiment – the “Glorious Glosters” – and was captured in the infamous Battle of the Imjin River in April 1951. In the encounter, some 650 men of the regiment defied an estimated 10,000 Chinese troops to hold a key position and blunt an attack that would have overwhelmed Seoul and turned the tide in favour of the Chinese-North Korean alliance. “We had a job to do and I think we did it rather well, giving the Chinese a bloody nose in the process”, said Mr Mercer, 88, who now lives in Streatham, South London. Injured in the early stages of the battle, Mr Mercer lost an eye and was among hundreds who could not be evacuated and went into captivity. And because he was unable to move fast enough, a Chinese soldier shot him in the leg. Mr Mercer puts his survival during two years in a North Korean POW camp down to “a combination of determination, bloody-mindedness and a large slice of lady luck” – but he knows of at least two British POWs who died in captivity and were interred in the North.“A lot of time has elapsed, but they should be brought home”, he said. Edgar Green, who served as a private in the Middlesex Regiment, believes it is very possible that British troops may have been mistaken for US personnel. Mr Green, 87 and now living in Aldermaston in Berkshire, firmly believes that the remains of British soldiers should be returned from the North and, if they cannot be repatriated to the UK, then they should be interred with the vast majority of other British casualties of the conflict at the United Nations Military Cemetery in Busan. A total of 885 British personnel are already buried at the cemetery.“I may be old, but I would go to any funeral for a British soldier that they return”. Mr Green said. “I cannot begin to explain the sense of camaraderie that we had then and still have today”, he added.