“Division 39” of KWP Provides Kim Jung-il`s Lifeblood

“Division 39” of Korean Workers` Party in the North generates money used to sustain the leadership of Kim Jung-il, the Asian Wall Street Journal reported yesterday.

The article, entitled, “Secret Cash Hoard Props Up Regime,” claims that the money Division 39 generates is by all accounts the lifeblood of Kim Jong-il`s dictatorship.

According to senior North Korean officials in exile and intelligence officials, Division 39 has generated about US$5 billion in cash thus far which it keeps in Macao, Swiss and Pyongyang bank accounts. The money is used for President Kim to secure political support or allegiance, though there are speculations that it may also be used for producing weapons of mass destruction.

Division 39 is a secret organization established in 1974 within the Korean Workers` Party? to strengthen the leadership of Kim Jung-il. Along with illegal activities, it also engages in legitimate business through Daesung Group subsidiaries such as Daesung Bank and Gold Star Bank in Vienna, Austria.

Daesung Group is North Korea`s largest exporter of agricultural products, such as pine mushrooms and ginseng, which are popular in Japan and China, and has exclusive rights to export gold, silver, magnesium and marine products. Thus, it also carries out legal trade.

The Japanese government, however, discovered that a Japanese corporation attempted to sell electric currents controllers that could be used for enriching uranium in the production of nuclear weapons to the trading division of Daesung. Moreover, staff of the trading division were arrested by police in Macao several years ago on charges of dealing in counterfeit U.S. dollars.

Intelligence officials in the U.S. and other nations are paying close attention to activities of subsidiaries of the Daesung Group in Macao and Gold Star Bank in Vienna, Austria, as well as Division 39, for signs of illegal transactions. Due to this heightened surveillance, assets of Gold Star Bank were reduced to US$20 million in 2001, causing operational difficulties for Chokwang Trading Corp., the Macao-based subsidiary of Division 39.

Rae-Jeong Park ecopark@donga.com