Pubdate: Wed, 23 Apr 2003
Source: Wall Street Journal (US)
Copyright: 2003 Dow Jones & Company, Inc.
Contact:  http://www.wsj.com/
Details: http://www.mapinc.org/media/487
Author: JAY SOLOMON, and JASON DEAN

HEROIN BUSTS POINT TO SOURCE OF FUNDS FOR NORTH KOREANS

The Taiwanese fishing vessel steered into waters off North Korea last June, 
hoisting a black flag with the image of a bull. A North Korean gunboat, 
manned with sailors in what looked like naval uniforms, soon pulled up. A 
member of each crew showed a torn half of a red Taiwan hundred-dollar bill 
bearing the image of Sun Yat-sen, founder of Taiwan's government. When the 
halves matched, the North Koreans transferred 198 plastic-wrapped bricks of 
heroin to the fishing vessel.

The incident, described by police and lawyers for some of the Taiwanese, 
was part of a broad North Korean campaign to finance its regime by selling 
contraband around the globe, say U.S. and Asian intelligence officials. 
Going back to the 1970s, North Korean diplomats and military officers have 
been arrested in Europe, the Mideast, Russia and Africa, accused of trading 
in cocaine, heroin, bootlegged alcohol, endangered animals and even 
counterfeit U.S. dollars.

High-level defectors allege that North Korean dictator Kim Jong Il and his 
late father, Kim Il Sung, have personally overseen development of the 
narcotics trade. As the economy began contracting in the late 1980s, the 
defectors say, the North Korean leaders ordered state collective farms and 
youth brigades to produce opium to earn hard currency. Villagers had to 
meet production targets, and the military helped with distribution. U.S. 
and Asian intelligence officials say North Korea linked up with criminal 
gangs in the region to enhance its network.

"North Korea is essentially now a state-run criminal syndicate," asserts 
Raphael Perl, a researcher at the U.S. government's Congressional Research 
Service, who has tracked the country's drug trade for a decade.

North Korea's exports from legitimate businesses totaled just $650 million 
in 2001, according to South Korea's central bank. But its annual revenue 
from illegal drugs runs between $500 million and $1 billion, officials at 
the U.S. military command in South Korea estimate. Another source of hard 
currency: secret missile sales that U.S. forces in South Korea estimate 
added up to $560 million in 2001.

As multilateral talks on North Korea's nuclear program begin Wednesday in 
Beijing, one concern is that if they chose, the North Koreans could readily 
convert their smuggling networks to selling nuclear fuel. North Korea 
restarted its nuclear reactor this year and has been making noises about 
beginning to reprocess its spent fuel rods into plutonium, which can be 
used for bombs. Says a senior U.S. official in Seoul: "North Korea has a 
historical record of smuggling anything to anyone anywhere." (See 
(http://online.wsj.com/article/0,,SB105103374832818000,00.html?mod=artic 
le-outset-box)  more on the Beijing talks.)

The most recent drug bust came Sunday, when the Australian navy chased down 
and stormed aboard a North Korean cargo ship, the Pong Su, off Sydney. 
Tuesday, Australia charged its 30 North Korean crew members with trying to 
smuggle in about 110 pounds of highly pure heroin, a charge the defendants 
denied.

Besides opium, of which North Korea is believed to be the world's largest 
source after Afghanistan and Myanmar, North Korea produces amphetamines. It 
was the origin of more than a third of amphetamines seized in Japan from 
1999 to 2001, Japanese drug officials say.

The North Korean government denies that it has been involved in drug 
trafficking. The police in Australia say they are still investigating the 
exact relationship between the drug-ship crew and the Kim government. But 
some U.S. officials say the government control in North Korea is so 
absolute it's difficult to imagine that gangs of North Korean nationals 
could operate independently. And interviews with a half-dozen defectors, as 
well as drug-enforcement officials in four North Asian countries, suggest 
involvement of the top leadership.

Kim Dok Hong was a senior official of North Korea's Workers' Party in the 
early 1990s, a member of the Central Committee and the top aide to founder 
Kim Il Sung's secretary. Central Committee documents he read outlined Kim 
Il Sung's orders for opium production in the early 1990s, before the 
founder's 1994 death, says the 64-year-old defector in an interview at a 
guarded safe house in Seoul. The economy was withering as aid declined from 
traditional benefactors China and Russia. North Korea's economy has 
suffered still more since then -- its legitimate exports falling by more 
than half since the early 1990s -- prompting a search for new sources of 
foreign currency.

Kim Il Sung visited a collective farm in the province of Namjak-Ri in the 
fall of 1993 and instructed managers to "produce more opium, which is to be 
bartered for food," recounts Kim Dok Hong, who says he read the comments in 
official Communist Party bulletins. The 1997 defector adds that in speeches 
to party cadres, outlined in Central Committee documents, the founder known 
as "the Great Leader" spoke of how opium could be a crucial means for 
earning hard currency.

Kim Jong Il, the founder's son and now North Korea's ruler, traveled to 
provincial towns, where meetings were held to discuss which would be the 
best areas for growing opium poppies, the defector says he read in Central 
Committee documents. He says the government chose the provinces of Southern 
Hamkyung and Northern Hamkyung.

Park Sung Hak, a 2000 defector who had been a leader of the Kim Il Sung 
Youth Association, says his organization was tasked in the mid-1990s with 
overseeing opium-poppy cultivation. Traveling through farms in mountainous 
regions, Mr. Park says, he helped enforce production quotas laid down by 
the state. Farmers who came up short faced punishment. Their produce was 
transferred to government factories where it could be processed into 
heroin, says Mr. Park, 35, who now works for a software company in Seoul.

"Opium gets you 300 times the profit you can get from corn," Mr. Park says. 
He says farmers were kept in the dark about the opium's use. An unknown 
portion apparently went for medicine, because North Korea, lacking most 
painkilling drugs , uses opium as a substitute.

Kim Dok Hong says that, before his defection, he was personally involved in 
escorting Southeast Asian drug lords around the North Korean capital. He 
recounts how North Korea once sent a bad batch of heroin to Japan that 
sickened users. "There was real concern that some of the people may have 
died from ingesting the bad drugs ," he says.

Mr. Kim says a Laotian businessman and three Burmese drug merchants, 
sitting in an office of a North Korean military trading company in 1996, 
schooled him and officers from a military trading company on what had gone 
wrong with the drug shipment. The Laotian explained that too many chemicals 
had been used, he says, while the Burmese merchants instructed the North 
Korean military men in how to make their heroin more pure.

Though quality improved, distribution channels began proving troublesome. 
Detention of North Korean diplomats abroad for alleged drug smuggling rose 
sharply in the mid-1990s, say South Korean and U.S. officials.

North Korea's dealings in contraband have deep roots. Virtually North 
Korea's entire diplomatic corps in Scandinavia was expelled in 1976 for 
allegedly running a smuggling ring through Norway, Denmark and Finland, 
dealing mostly in alcohol and cigarettes. Arrests of North Korean diplomats 
for allegedly dealing in marijuana, cocaine, morphine and the "date rape" 
drug rohypnol have also been reported over the past three decades.

A North Korean envoy arrested in Russia in 1996 with nearly 50 pounds of 
heroin committed suicide while in custody, a South Korean police report 
says. Other arrested diplomats have signed statements saying they were 
acting alone. In the early days, contraband sometimes moved in diplomatic 
pouches. In more recent years, North Korea increasingly has turned to 
partnerships with Asian gangs for distribution.

"The recent trend is for these [gangs] to send boats into North Korean 
waters. Fishing boats come to pick up the drugs ," says Yoo Dong Ryul, an 
analyst for the South Korean police department.

One reason for North Korea's success has been cooperation with Japanese 
organized crime, say U.S. and Japanese drug-enforcement officials. Between 
1999 and 2001, Japanese authorities seized more than 2,400 pounds of 
amphetamines en route from North Korea, 34% of Japan's total seizures of 
the drug . China, which in past years was the main source, accounted for 38%.

North Korean spy ships make their way into Japanese waters and rendezvous 
with Japan's yakuza gangs. One such ship sailed into the waters off 
southwestern Japan on Dec. 22, 2001. When Japanese Coast Guard boats 
ordered it to halt, the North Korean crew opened fire. The Coast Guard 
fired back and sank the vessel, which the Japanese government later 
determined to be a North Korean spy vessel that was also selling 
amphetamines to Japanese gangsters. All crew members were presumed drowned.

Taiwan, too, has seen more drugs flowing in from North Korea through local 
gangs. The Taiwanese vessel that linked up with a North Korean gunboat and 
matched torn halves of a bill took aboard about 174 pounds of heroin, say 
Taiwan police and prosecutors. The July 2002 bust of the fishing ship, 
called the Shun Chi Fa, yielded 13% of the heroin Taiwan seized last year, 
according to Taiwan's Investigation Bureau.

The prosecutor of the arrested Taiwanese crew, Wu Tzong-guang, estimates 
the ship had made five or six successful smuggling trips to North Korean 
waters before being caught. He says the smuggling suspects told him the 
July haul was their smallest.

Taiwanese authorities began tracking the ship early last year, tipped off 
by a man who said he had taken part in one voyage. Police tracked several 
trips but were foiled when the fishing ship, after returning from North 
Korean waters, always moved its cargo onto small boats as it neared Taiwan. 
But last June 16, police watched as the mother ship set out again for North 
Korean waters. Taiwanese authorities eavesdropped on calls the crew made to 
their contacts back in Taiwan. On June 21, in North Korean waters, the crew 
of the Shun Chi Fa raised its flag and picked up its cargo from the North 
Korean gunboat.

Back in the vicinity of Taiwan, the ship halted near an island and crews 
transferred the heroin bricks to a small boat called the Hsie Man 18. The 
"little bucket," as they called it, headed into the Shen Au port. This 
time, police were able to track the smaller boat, and were waiting when it 
docked.

Among those they arrested, and are now trying in court, was the alleged 
ringleader, Lin Jing-kwo, a 34-year-old member of a wealthy Taiwanese 
family. His attorney declined to comment. Lawyers for three of the six 
other suspects -- who like Mr. Lin are currently on trial -- say their 
clients were indeed involved in smuggling, but didn't know that the 
contraband was heroin.

The heroin in this seizure came in three unremarkable boxes. In several 
earlier raids in Taiwan and Japan, says Taiwan's Investigation Bureau, the 
packages were more noteworthy. The drugs were packed in rice bags -- the 
same bags used to hold rice that Taiwan donates to North Korea to ease its 
hunger crisis.
- ---
MAP posted-by: Keith Brilhart