Official and Un-Official Commissions: Sending Money to North Korea

There are a great many uncertainties faced by those sending money to North Korea in the hope it reaches the intended recipient. For example, how much in commission do the middlemen and authorities take?

North Korean money

Despite sanctions, North Korean exiles send money to their families who remain in North Korea. They do this through brokers, who receive commission.

Kim Jin-uk is a refugee from Hoeryong. He says, “The sign of a good son or daughter is defection, in order to send money back home.” It has become almost a North Korean trusim that there is no better child than one who feeds family back home by remitting money.

This is said to be a much more speedy process compared to the way it was before. Ms Song says she sent some money in December to her family back home, using a broker. “The broker contacted me by phone and put me in touch with my younger brother. I sent the money to the account number provided, the broker confirmed that it had arrived, and handed the money to my brother there and then.”

Nevertheless, families have to pay up to 30% in commission to such middlemen. This is an amount that builds some level of resentment in the senders.

But in the context of what it costs to send money through semi-official channels, they are thankful to pay even this amount in commissions. That’s because the North Korean authorities are considered to be the worst in terms of ‘commission’ – even more than profit-making brokers.

North Korean refugee Kim Jong-hwa says he has experience of receiving money in North Korea from relatives living abroad, before the disastrous currency revaluation of 2009. He explains the situation of restrictions on receiving foreign currency.

“I managed to bribe an official to obtain a travel permit, so that I could go to a Partnership Bank where I could receive dollars. I went there by train.” (A Partnership Bank is a bank run jointly by North Korean and foreign investors. The partnership law was passed in 1984, to allow foreign investments in foreign-currency earning areas such as tourism and industry.)

“I was so happy to be getting the money that I didn’t mind the two-day journey. When I finally arrived in the early morning, I was told that according to Party regulations, I could only receive 15% of the money in dollars, and the rest was given to me in North Korean currency. ”

Normally, at market rates, he said, that money would have been worth 200,000 won. But the bank gave him only 2,000 won, claiming that they followed the correct currency conversion.

It’s not just so-called regulatory frameworks that restrict money reaching its intended recipient, it’s also hidden bullying by those in positions of authority.

Jong-hwa continues, “Even the small amount of dollars I received was stolen by soldiers, security officials and even officers of my residential block. They said that it was a way for me to show loyalty to the Party.”

In North Korea, this kind of money-collection even takes advantage of the “jeong” (affection / love) between family members separated by the 38th parallel that divides the Korean peninsula into two arbitrary halves.

After the meeting of North and South Korean families who had been separated, the North Koreans were ordered to hand in the items and money that the South Korean families had brought. Refugees testify that the money was pocketed by those in positions of authority, under various excuses.

Notably, the victims’ rising discontent on this occasion eventually led to a response from the state, which reimbursed those who had ‘donated’ family money.