'Money laundering' in the Jangmadang of North Korea


A North Korean ‘jangmadang’.


Since the collapse of the Public Distribution System and North Korea’s state-controlled People’s Economy, state food rations stopped and it became impossible for all but the most privileged elite to subsist on the official monthly wages. For this reason, trading on the jangmadang (marketplace) is the lifeline and primary source of income for most North Koreans.

For those who have a defector in the family, regular packets of foreign currency – sent by their loved ones abroad – supplement their income. But even such families continue to spend their working hours trading on the jangmadang; their purpose isn’t to make money, but to ‘launder’ it.

Choi* is a North Korean refugee who has settled in South Korea, and his family started trading on the jangmadang more regularly after his arrival in South Korea. Choi was classified as a ‘missing person’ by the state, and if the authorities suspected that he had successfully settled in South Korea due to the family’s extra income, the family would be put at great risk.

Choi’s family, like many other families of those who have successfully escaped from North Korea, therefore stepped up their presence in the jangmadang. Ironically, by conducting market activities prohibited by the state, they could hide the fact that one of their family had not only made it out of the country alive, but was sending home packets of money.

In North Korea, there is a saying, ‘We know how many spoons our neighbours have in their kitchen’. In other words, no one is exempt from institutional life, and there is no privacy. Secret police have ears everywhere and snitching on others is encouraged, so other people’s lives are everyone’s business. Moreover, if someone is found to have kept quiet about their knowledge of one who has successfully fled the country, they will receive a punishment equal to those who have aided a defector.

It is in this context that Choi’s family must conduct ‘money laundering’ through the jangmadang, which lies outside the remit of the state.

While North Korean families are made to survive on a self-sufficient basis (yet hide their activities from the state) instead of relying on the state for sustenance, the North Korean leadership continues to boast of a ‘self-sufficient state’ that feeds their people.

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  • Bob

    would be nice if there way more info/detail in this “article”.

    • NewFocusINTL

      we’ll consider doing an extended version of this taster!

  • Rabin

    I wish there were more details on how the money is sent and then ‘laundered’ inside DPRK…

    • newfocusintl

      Will do a piece on that for you and others interested!

  • Leon Davis

    This sounds a lot like the Arab “Hawala” and the South Asia “Hundi” money broker systems. The actual money doesn’t cross the border. It’s withdrawn from an account much like a regular bank. The brokers on both ends take a small percentage. It’s based entirely on personal trust.