II. North Korea's Contemporary Defence-Export Industry

Click to increase image sizeClick to decrease image size

Notes

1 Jo Warrick, ‘On North Korean Freighter, A Hidden Missile Factory’, Washington Post, 14 August 2003.

2 Katherine Shrader, ‘North Korea Arms Trade Seen as Threat’, Washington Post, 12 October 2006.

3 Ibid.

4 A ‘knock-down kit’ is a package containing parts and instructions needed to assemble a final product. In some cases, all parts are produced in one country and are then exported to a second. In other cases, some parts may need to be produced and/or added by the second country.

5 Author interview with Interviewee C, 6 June 2014.

6 Author e-mail interview with Interviewee C, 18 September 2014.

7 Andrea Matles Savada (ed.), North Korea: A Country Study (Washington, DC: GPO for Library of Congress, 1994).

8 Translation of Republic of Korea National Intelligence Service, ‘North Korean Military – Munitions Industry’, January 1999, available at <http://fas.org/irp/world/rok/nis-docs/defense09.htm>, accessed 20 October 2015.

9 Savada (ed.), North Korea.

10 There are some exceptions to this. For example, North Korea was permitted to produce a licensed copy of the Chinese Type 63 (YW531) armoured personnel carrier. See US Department of Defense, ‘North Korea Country Handbook: Marine Corps Intelligence Activity’, May 1997, Appendix A, p. 180.

11 Shea and Hong, who have examined photographs of North Korean weapons and the weapons themselves, add that, ‘in the beginning of manufacturing the Type 58, the rifles appear to have had the receivers made in North Korea, but parts appear to be Soviet. Within a few years all parts appear to be of North Korean origin’. Dan Shea and Heebum Hong, ‘North Korean Small Arms', Small Arms Defense Journal (Vol. 5, No. 1, March 2013).

12 North Korea's AK-47s do not have a rate reducer, while its industry produces a unique double-barrelled 107-mm multiple rocket launcher. Roger Davies, ‘Sea Tigers, Stealth Technology and the North Korean Connection’, Jane's Intelligence Review, March 2001, available at <http://www.lankalibrary.com/pol/korea.htm>, accessed 20 October 2015. It also produced eighteen-tube and twenty-four-tube 107-mm self-propelled multiple rocket launchers, deviating from the standard configuration of twelve tubes. See Federation of American Scientists, ‘Type 63 107mm Rocket Launcher’, 1999, <http://fas.org/man/dod-101/sys/land/row/type-63-r.htm>, accessed 20 October 2015.

13 Savada (ed.), North Korea.

14 Joseph S Bermudez, Jr, ‘Korean People's Navy Tests New Anti-Ship Cruise Missile’, 38 North, 8 February 2015, <http://38north.org/2015/02/jbermudez020815/>, accessed 20 October 2015.

15 Author interview with Interviewee C, 25 July 2014.

16 Where applicable, systems usually come complete with guidance systems.

17 Michael Yahuda, The International Politics of the Asia-Pacific: 1945–1995 (Abingdon: Routledge, 2005), p. 96.

18 Savada (ed.), North Korea, chapter on ‘Military Industry’.

19 Hugh Griffiths and Roope Siirtola, ‘Full Disclosure: Contents of North Korean Smuggling Ship Revealed’, 38 North, 27 August 2013, <http://38north.org/2013/08/hgriffiths082713/>, accessed 15 October 2015.

20 Information and documentation supplied by Interviewee C during interviews with the author in June and July 2014.

21 Shea and Hong, ‘North Korean Small Arms'.

22 Photographs are available from TheAKForum.net.

23 Author interview with Interviewee C, 25 July 2014.

24 ‘Yemeni Military Leaders Brief Ambassador on DPRK Contacts’, Cable #03SANAA1990, 12 August 2003, accessed via Wikileaks on 15 May 2014.

25 For example, in 2010 North Korea displayed a longer variant of its licensed copy Chinese Type 63 armoured personnel carrier, with new optics. See Military Factory, ‘VT-323 (M1973 Sinhung) Armoured Personnel Carrier’, 3 May 2015, <http://www.militaryfactory.com/armor/detail.asp?armor_id=394>, accessed 20 October 2015.

26 ‘Ethiopia: Scenesetter for Secretary Rice's December 5 Visit’, Cable #07ADDISABABA3430, 30 November 2007, accessed via Wikileaks on 27 May 2014.

27 ‘Blue Lantern Check on Denied License Application 050128842’, Cable #09STATE81473_a, 5 August 2009, accessed via Wikileaks on 27 May 2014.

28 Risk Report, ‘North Korean Missile Exports’, Wisconsin Project on Nuclear Arms Control (Vol. 2, No. 6, November/December 1996), <http://www.wisconsinproject.org/countries/nkorea/north-korea-missile-exports.html>, accessed 20 October 2015.

29 Gleb Stolyarov, ‘Russia's Kalashnikov to Open Weapons Factory in India’, Reuters, 7 February 2014; Guardian, ‘Hugo Chavez Announces Kalashnikov and Drone Production’, 14 June 2012.

30 A high-level North Korean delegation surprised its Nigerian counterparts in 2004 by offering to build weapons factories, for instance. North Korea's military and political relationship with Nigeria is not thought to be well developed. Washington Times, ‘North Korea Offers Nigeria Missile Deal’, 28 January 2004.

31 US Defense Intelligence Agency, ‘North Korea: The Foundations for Military Strength’, October 1991, available at <https://www.fas.org/irp/dia/product/knfms/knfms_toc.html>, accessed 20 October 2015.

32 Warrick, ‘On North Korean Freighter, A Hidden Missile Factory’.

33 Ibid.

34 Ibid.

35 Andrea Berger, ‘Is Ethiopia Violating UN Sanctions Against North Korea?’, 38 North, 23 December 2014, <http://38north.org/2014/12/aberger122314/>, accessed 20 October 2015.

36 Tewodros Rufael, ‘Design of Enterprise Resource Planning: Framework and its Implementation’, supervised by Subhash Chandra at the School of Graduate Studies of Addis Ababa University, November 2007, pp. 8–9.

37 Robin Hughes, ‘SSRC: Spectre at the Table’, Jane's Defence Weekly, 22 January 2014.

38 Author conversation with Vietnamese officials, 19 November 2014, Hanoi.

39 The legality of training services was a grey area of the sanctions regime until recently, primarily because the wording of relevant provisions in Resolution 1874 (2009) did not offer a definition of ‘related services’. However, as a result of Uganda's repeated military training contracts with North Korea, the UN Panel of Experts on North Korea has clarified that these contracts are in breach of the resolution if they involve the use of lethal weaponry. Chapter III will show that this is indeed the case. UN Security Council, ‘Report of the Panel of Experts Established Pursuant to Resolution 1874 (2009)’, S/2015/131, 23 February 2015, pp. 38–39.

40 Africa Research Bulletin: Political, Social and Cultural Series, ‘Zimbabwe–North Korea: A Controversial Visit’ (Vol. 46, No. 5, 2009), pp. 17985B–17986C.

41 East African, ‘Museveni Praises North Korea Security Training’, 17 April 2014, <http://www.theeastafrican.co.ke/news/Uganda-President-Museveni-praises-North-Korea-security-training/-/2558/2283098/-/f7p3ue/-/index.html>, accessed 20 October 2015.

42 Other online sources show that North Korea's ‘711 unit’ of the Reconnaissance General Bureau has also hosted foreign students.

43 Benjamin R Young, ‘How North Korea Has Been Arming Palestinian Militants for Decades’, NK News, 25 June 2014, <http://www.nknews.org/2014/06/how-north-korea-has-been-arming-palestinian-militants-for-decades/>, accessed 20 October 2015.

44 Andrea Berger, ‘A Legal Precipice: The DPRK-Uganda Security Relationship’, 38 North, 13 November 2014, <http://38north.org/2014/11/aberger111314/>, accessed 20 October 2015.

45 Africa Research Bulletin: Political, Social and Cultural Series, ‘Zimbabwe–North Korea’.

46 Savada (ed.), North Korea, chapter on ‘Relations with the Third World’; Helen Chapin Metz (ed.), Madagascar: A Country Study (Washington, DC: GPO for the Library of Congress, 1994).

47 Information gathered through online sources, obscured to protect the identity of the individuals concerned.

48 Ibid.

49 UN Security Council Resolution 2094 (2013), para. 7.

50 Author interview with Interviewee C, 6 June 2014. The interviewee also claims that in order to facilitate such transactions, North Korean arms dealers price match with their Chinese counterparts.

51 Continued investigation would be particularly worthwhile given that it was China that allegedly negotiated the exception in Resolution 1874 (2009) which permits countries to ship small arms and light weapons to North Korea.

52 UN Security Council, ‘Report of the Panel of Experts Established Pursuant to Resolution 1874 (2009)’, S/2014/147, 6 March 2014, p. 22.

53 Bertil Lintner and Steve Stecklow, ‘Trail of Papers Illuminates North Korea's Arms Trading’, Wall Street Journal, 6 February 2003.

54 ‘Director's Remarks at the Los Angeles World Affairs Council – 16 September 2008’, found in US Central Intelligence Agency Handbook: Strategic Information, Activities, and Regulation (Washington, DC: International Business Publications Inc., 2013), p. 164.

55 US Defense Intelligence Agency, ‘North Korea’, chap. 3 on ‘Foreign Policy Goals’.

56 Savada (ed.), North Korea, chapter on ‘Relations with the Third World’.

57 Patrick Oppmann, ‘Panama Says Cuban Weapons Shipment Violates U.N. Arms Embargo’, CNN, 29 August 2013; for further details on North Korea's support to North Vietnam, see ‘A 7 May 1967 DVO Memo about Intergovernmental Relations between the DPRK and Romania, the DRV, and Cuba’, 7 May 1967, History and Public Policy Program Digital Archive, AVPRF f. 0102, op. 23, p. 112, d. 24, pp. 39–42. Obtained for NKIDP by Sergey Radchenko and translated for the North Korea International Documentation Project by Gary Goldberg; available at <http://digitalarchive.wilsoncenter.org/document/116701>, accessed 20 October 2015.

58 US Defense Intelligence Agency, ‘North Korea’, chap. 3, ‘Foreign Policy Goals’.

59 In fact, the Congolese contract highlights another important aspect of North Korean pricing: the currency used. According to Interviewee C, in approximately 2008 or 2009, North Korea switched from pricing its military goods and services in US dollars to euros, perhaps as a consequence of the Banco Delta Asia incident and the US Treasury's ability to restrict transactions carried out in dollars. The incident began in September 2005 when the US Treasury designated the Macau-based bank as a ‘primary money-laundering concern’ under the Patriot Act, because it allegedly facilitated corrupt financial activities by the North Korean government. Some $25 million in North Korean government funds were frozen as a result and numerous financial institutions around the world subsequently began to cut any ties to North Korea out of fear that they might be excluded from the US financial system. Available details of North Korea's arms-related contracts with the Republic of the Congo support the conclusion that North Korea now bills in euros. David Lague and Donald Greenlees, ‘Squeeze on Banco Delta Asia Hit North Korea Where It Hurt’, New York Times, 18 January 2007.

60 Prices have been adjusted for inflation.

61 A small portion of the difference may be explained by the extent of work to be done. The Ukraine contract involved minor servicing of the automotive chassis, while this point is unclear in the Congo case. Either way, based on this comparison it seems highly likely that North Korea's services are still substantially cheaper than Ukraine's. See ‘Minoborony potratit na remont spetsmashin 5.3 million grn (Hrivnya) [Ministry of Defence Will Spend 5.3 million Hrivnya on the Special Vehicles Overhaul]’, facts and comments (with syndicated content from Ukrainian National News), 18 October 2013.

62 A ‘unit’ in this case is used to refer to the missile and its launch tube. It does not include the corresponding trigger unit, which is reusable, and whose sale is often negotiated separately.

63 Regina v. Michael George Ranger, Southwark Crown Court, Record of Proceedings for Day Three, 11 July 2012.

64 Regina v. Michael George Ranger, Southwark Crown Court, Record of Proceedings for Day Two, 10 July 2012.

65 Converted from $5,000 using historical exchange rates at the time of the price's publication in November 2006, and adjusted for inflation. ‘Black Market Prices for Man-Portable Air Defense Systems’, Federation of American Scientists, June 2010, p. 1, <https://fas.org/programs/ssp/asmp/issueareas/manpads/black_market_prices.pdf>, accessed 13 November 2015.

66 Total contract value was $14 million in January 1998. This has been converted using historical exchange rated from the time, and adjusted for inflation. Paul Holton, ‘Small Arms Production in Russia’, Saferworld, March 2007, p. 29, <http://www.saferworld.org.uk/resources/view-resource/256-small-arms-production-in-russia>, accessed 13 November 2015.

67 Author interview with Interviewees A and B, 3 October 2014.

68 North Korea has sometimes been willing to offer attractive financing arrangements when its customers have shallow pockets, despite the emphasis paid to short-term revenue generation. For one project in Yemen, for example, it agreed to allow Sana'a to pay over a ten-year period. This may be an unusual case, and those terms may have been offered because Sana'a had agreed around the same time to contract to North Korea for other goods and services. ‘Yemeni Military Leaders Brief Ambassador on DPRK Contacts’, Cable #03SANAA1990.

69 Thomas Plant and Ben Rhode, ‘China, North Korea and the Spread of Nuclear Weapons’, Survival (Vol. 55, No. 2, April 2013), pp. 65, 67.

70 Myanmar Economic Holdings Ltd was sanctioned by the US in 2008 for supporting the military junta in Burma. See US Department of the Treasury, ‘Recent OFAC Actions’, 29 July 2008, <http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/pages/20080729.aspx>, accessed 20 October 2015. It remains on the Office of Foreign Asset Control's Specially Designated Nationals and Blocked Persons List as of August 2015. See <https://www.treasury.gov/ofac/downloads/t11sdn.pdf>, accessed 20 October 2015.

71 ‘Burma and North Korea: Rice for Arms’, Cable #09RANGOON409, 2 July 2009, accessed via Wikileaks on 27 May 2014.

72 Bertil Lintner, ‘Fog Lifts on Myanmar-North Korea Barter’, Asia Times Online, 4 March 2011.

73 Author interview with Interviewee J, 29 April 2014. Corroborated by Interviewee E, in conversation with the author on 8 May 2014.

74 ‘Nigeria and DPRK Missiles’, Cable #04ABUJA149, 29 January 2004, accessed via Wikileaks on 27 May 2014.

75 BBC News, ‘Nigeria Seeking N Korea Missiles’, 29 January 2004.

76 ‘Demarche Delivered to French Government on North Korean Arms Trade’, Cable #05PARIS6530, 23 September 2005, accessed via Wikileaks on 27 May 2014.

77 See ‘North Korean Foreign Minister Makes “Generic” Visit to Brazil, May 9–13’, Cable #09BRASILIA694, 4 June 2009, accessed via Wikileaks on 27 May 2014.

78 UN Security Council, ‘Narrative Summaries of Reasons for Listing: Korea Mining Development Trading Corporation’, 29 October 2014, <www.un.org/sc/suborg/en/sanctions/1718/materials/summaries/entity/korea-mining-development-trading-corporation>, accessed 13 November 2015.

79 UN Security Council, ‘Narrative Summaries of Reasons for Listing: Korea Ryongbong General Corporation’, 29 October 2014, <https://www.un.org/sc/suborg/en/sanctions/1718/materials/summaries/entity/korea-ryonbong-general-corporation>, accessed 13 November 2015.

80 UN Security Council, ‘Narrative Summaries of Reasons for Listing: Green Pine Associated Corporation’, 29 October 2014, <https://www.un.org/sc/suborg/en/sanctions/1718/materials/summaries/entity/green-pine-associated-corporation>, accessed 13 November 2015.

81 Author interview with Interviewee C, 6 June 2014.

82 North Korean-controlled logistics and shipping firms also have offices overseas in countries such as Russia, China and Brazil, which help delivery on an agreed contract.

83 ‘Message on Ongoing Proliferation Finance Activities by Iran and North Korea Passed to Germany’, Cable #07BERLIN1571, 17 August 2007, accessed via Wikileaks on 27 May 2014.

84 UN Security Council, ‘Report of the Panel of Experts Established Pursuant to Resolution 1874(2009)’, S/2013/337, pp. 112–15.

85 Warrick, ‘On North Korean Freighter, A Hidden Missile Factory’.

86 Regina v. Michael George Ranger, Southwark Crown Court, Record of Proceedings for Day One, 9 July 2012; Crown Prosecution Service, ‘Michael Ranger Sentenced For Organising Arms Deals between North Korea and Azerbaijan’, 20 July 2012, <http://www.cps.gov.uk/news/latest_news/michael_ranger_sentenced_for_organising_arms_deals/>, accessed 20 October 2015.

87 It is unclear whether the prospective buyers in question were members of the Sri Lankan military or Liberation Tigers of Tamil Eelam. The latter group was known to be a regular customer.

88 Author e-mail conversation with Interviewee C, 26 January 2015.