North Korean Crime-for-Profit Activities (CRS Report for Congress)
Premium Purchase PDF for $24.95 (21 pages)
add to cart or
subscribe for unlimited access
Pro Premium subscribers have free access to our full library of CRS reports.
Subscribe today, or
request a demo to learn more.
| Release Date |
Revised Aug. 25, 2008 |
| Report Number |
RL33885 |
| Report Type |
Report |
| Authors |
Liana Sun Wyler and Dick K, Nanto, Foreign Affairs, Defense, and Trade Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
-
Premium Revised April 18, 2008 (19 pages, $24.95)
add
-
Premium Revised Jan. 29, 2008 (17 pages, $24.95)
add
-
Premium Feb. 16, 2007 (17 pages, $24.95)
add
|
Summary:
Strong indications exist that the North Korean (Democratic People's Republic of Korea or DPRK) regime has been involved in the production and trafficking of illicit drugs, as well as of counterfeit currency, cigarettes, and pharmaceuticals. It appears that drug trafficking has declined and counterfeiting of cigarettes may be expanding. Reports indicate that North Korea may engage in insurance fraud, human trafficking, and wildlife trafficking as a matter of state policy. DPRK crime-for-profit activities have reportedly brought in important foreign currency resources and come under the direction of a special office under the direction of the ruling Korean Worker's Party.
With the caveat that dollar value estimates of clandestine activities are highly speculative, conservative estimates suggest North Korean criminal activity has generated as much as $500 million in profits per year (about a third of DPRK's annual exports) but has decreased in recent years. A core issue is whether the income from the DPRK's reportedly widespread criminal activity is used to finance the development of weapons of mass destruction or other key military programs, thereby contributing to the DPRK's reluctance to curb its aggregate level of such activity. Some also speculate that the DPRK's criminal smuggling networks could help facilitate the illicit movement of nuclear or other materials in and out of the country.
Policy analysts in the past have suggested that North Korean crime-for-profit activity has been carefully controlled and limited to fill specific foreign exchange shortfalls. However, some concern exists that North Korean crime-for-profit activity could become a "runaway train" that once established could escape control. If the DPRK's crime-for-profit activity has become entrenched, or possibly decentralized, some analysts question whether the current Pyongyang regime (or any subsequent government) would have the ability to effectively restrain such activity, should it so desire. Moreover, some suggest that proposals to shift DPRK crime-related income toward legitimate-source income ignore the fact that the current regime diverts some illicit earnings to slush funds designed to sustain the loyalty of a core of party elite and to underwrite weapons development programs.
A challenge facing U.S. policy makers is how to balance pursuing anti-drug, counterfeiting, and crime policies vis-Ã -vis North Korea against effectively pursuing several other high priority foreign policy objectives, including (1) nuclear nonproliferation negotiations via the Six-Party talks, (2) limiting ballistic missile production and export, (3) curbing terrorism, and (4) addressing humanitarian needs. As the Six-Party process has proceeded in 2008, it appears that the U.S. overriding goal of denuclearization outweighs concerns related to DPRK illicit activity (with the exception of proliferation of nuclear weapons technology and materials). Such illicit activity, however, could surface again as an issue as talks proceed on diplomatic normalization with the DPRK. This report will be periodically updated.
For additional CRS analysis of DPRK issues, see CRS Report RL33590, North Korea's Nuclear Weapons Development and Diplomacy, by Larry A. Niksch, and CRS Report RL33567, Korea-U.S. Relations: Issues for Congress, by Larry A. Niksch.
