"Cash deals are recommended in trading with Pyongyang"

U.S. Department of Commerce attracted a public gaze, as it announced list requiring a cautious attention in business transactions with North Korea. At a forum, which was jointly held with U.S. Department of State and Department of the Treasury in order to give a guideline to potential investors in North Korea, the commerce department released a list of total 17 do¡¯s and don¡¯ts to be under strict observation in approaching the Pyongyang¡¯s long-closed market, said the Washington D.C. Trade Center of Korea Trade-Investment-Promotion Agency.

At the event, about 80 big names in the business circles and economic bodies attended, reflecting their keen interests in investment into North Korea. The participants included the North America Grain Export Association, U.S. Dairy Export Council, IBM, Hewlett Packard, Oracle, Dupont and Phillip Morris.

Although 90% of the list of export-banned items has been lifted in line with eased economic sanction against North Korea, imports of North Korea-made products still require a prior approval according to the U.S. laws prohibiting missile proliferation.

¡°Do not assume that North Korea has a similar business environment with that of Western countries. And don¡¯t expect there to be any real infrastructure for production and assembly joint venture in the country¡± urged the Department of Commerce. It said that one might be in a fix if he or she expects basic industrial resources such as water, electricity, roads and airports are easily available in North Korea.

In addition, the department¡¯s report pointed out that cash deals are recommended than credit-based deals in doing business with North Korea, primarily due to the country¡¯s economy led by state enterprises, along with an immature consumer economy.

On the other hand, the do¡¯s list included: one has to make sure that the destination of exported products should be addressed to ¡°North Korea¡± or ¡°DPRK (Democratic People¡¯s Republic of Korea),¡± not to ¡°South Korea¡±; and directly contact with the North Korean government when a permission is needed, not expected that partners in North Korea get allowance related to exports, imports and tariffs matters.

Seokmin hong smhong@donga.com