North Korean Supporters in Japan: Issues for U.S. Policy

CRS Report for Congress
Nort h Korean Supporters in Japan:
Issues for U.S. Policy
Upda ted Novembe r 7 , 2003
Emma Chanlett-Avery
Analys t in Asian Affairs
Fo reign Affairs, De fense, and Trade Division

Congressional Research Service ˜ The Library of Congress

North K orean Supporters in Japan: Issues for U.S.
T h e C hosen Soren (Chongryun in Korean), a group of pro-Pyongyang ethnic
Koreans p ermanently residing in J apan, has come under h eigh tened s crutiny as U.S.
and J apanese policy m akers s eek new ways t o s top North Korea’s nuclear weapons
program. With the s ix -party talks currently at a s tandstill, the United S tates and its
allies are seek i n g ways t o p ressure econo mically and politically the P yongyang
regime to abandon its nuclear weapons program. The C hosen Soren o rganiz ation h as
long supported North Korea b y facilitating trade, remitting cash donations,
es tablishing personal contact s, and possibly coordinating illicit transfers of narcotics
and weapon part s. J apanese offi ci al s have r ecently indicat ed more willingness t o
crack down on C hosen Soren’s illegal activities. U.S. offici al s m ay be prepared to
cooperate with J apan i n d ealing with the o rganiz ation as p art o f a broader s trategy o f
influencing North Korean actions.
C o n gress has been activel y engaged in its oversight of the Administrat i o n ’ s
Nort h K orean pol i cy, i n cl ud i n g a heari n g h el d b y t he Fi nanci al M anagem ent , Budget ,
and International S ecurity Subcommittee of t he Senate Governmental Affairs
Committee o n M ay 20, 2003, in which a North Korean defector testified t hat C hosen
Soren h ad coordinated s hipments of missile parts t o t he regime.
This re p o r t p r ovides a background on Chosen Soren and its membership in
J apan and ex plores its relationship with the J apanese government. It g o e s o n t o
discuss documented links, both l egal and illegal, with the North Korean government,
including weapons, d rugs , a n d cash t ransfers. A third s ection outlines changes t o
J apan’s policy t owards Chosen Soren, ranging from t ax ation policy t o s hipping
s u rv eillance t o res tructured credit unions. The report concludes with a brief
d i s c u s s i o n of possible options for C ongress and U.S. o fficials. This report will b e
updated as n ecessary.

In troduction ......................................................1
Background ......................................................1
Membership ..................................................1
HistoricRelations withJapaneseGovernment .......................2
ChosenSoren’sRelationshipwithPyongyang ...........................3
Political Ties .................................................3
Cash Remittances ..............................................4
Technology T ransfers ...........................................4
Narcotics and Counterfeiting .....................................5
ChangestoJapan’s ChosenSorenPolicy ...............................6
NewControls on SeaLinks with NorthKorea .......................6
TaxationPolicy ...............................................6
ChoginCredit Unions ..........................................7
U.S.PolicyOptions andConsiderations ................................8

North Korean Supporters in Japan: Issues
for U .S. Polic y
The Chosen Soren (Chongryun in Korean), a group of pro-Pyongyang ethnic
Koreans p ermanently residing in J apan, has come under h eigh tened s crutiny as U.S.
and J apanese policy m akers s eek new ways t o s top North Korea’s nuclear weapons
program. With the s ix -party talks currently at a s tandstill, the United S tates and its
allies are seeking ways t o economically an d p o litically pressure the P yongyang
r e gime to abandon its nuclear weapons program. The C hosen S o ren h as l o n g
supported North Korea b y facilitating t rade, remitting cas h donations, establishing
personal contact s, and possibly coordinating illicit transfers of narcotics and weapon
parts. J apanese officials h ave recently indicated more willingn ess t o crack down o n
Chosen Soren’s illegal activities. U.S. officials m ay be prepared to cooperate with
J apan i n d eal i n g w i t h t h e o rgani z at i o n as p art o f a broader s t rat egy o f i nfl u enci ng
North Korean actions.
Congress has been activel y engaged in its oversight of t h e A d m inistration’s
Nort h K orean pol i cy, incl udi ng a h eari n g h el d b y t he Fi nanci al M anagem ent , Budget ,
and International S ecurity Subcommittee of t he Senate Governmental Affairs
Committee o n M ay 20, 2003 in which a North Korean defector testified t hat C hosen
Soren had coordinated shipments of missile parts t o t he regime. This report will
ex pl ore assessm ent s of C hosen S o ren’s rel at i ons wi t h t h e Nort h Korean and J apanese
governments, the recent changes in J apan’s policy t o w a rd t he group, and possible
options for t he United S tates t o ex ploit the link pro v i d e d by t he Chosen Soren
between the reclusive North Korean regime and t he outside world.
Thi s report was prepared usi n g ex cl u si vely open s ources. M embers of Congress
may benefit from classified briefings from t he intelligence community on the ex t ent
of Chosen Soren’s ties with the North Korean government.
The C hosen Soren (General Associatio n of Korea n R es idents in J apan) is a
political and s o c i a l o rganization m ade up of ethnic Koreans who have chosen to
affiliate them selves with North Korea . C hosen Soren represents a minority of the

640,000 ethnic Koreans i n J apan; m embership estimates ran ge from 50,000 to

180,000.1 Established i n 1955, the group is made up primarily of descend a n t s o f
Koreans w h o m o v e d t o J apan as laborers i n t he 1930s when the Korean peninsula
was annex ed b y J a p an. C hosen Soren reportedly administers and finances 140
schools an d a university that emphasiz e Ko rean language and culture; publishes a
newspaper; serves as a confederation for 12 affiliated associ ations; holds cl ose ties
with financial i nstitutions cat ering ex clusively to et hnic Koreans; and act s as an
unofficial re p r e s entative o f t he North Korean government. Up t o 30% of the
pachinko industry (a popular form of p i n b all gambling with over 18,000 parlors
nationwide) is controlled b y ethnic Koreans, many of whom h a v e c l o s e ties t o
Chosen Soren. 2
The C hosen Soren h as a counterpart in the p ro-Seoul K o r e an organiz ation
Mindan (Korean R e sidents Union in J apan). Both o rganiz ations work to promote
et hni c Koreans’ ci vi l ri ght s i n J apan. M em bers of bot h are cl assi fi e d a s “ s p eci al
permanent r es idents,” but hold offici al citizenship in North or S outh Korea. The
groups differ i n approach: M indan s upports the enfranchisement in J apan o f s pecial
p e rm anent resi d ent s (t he desi gn at i o n of m ost ethnic Koreans) while Chosen S o r e n
advocat es a s trong national i dentity with North Korea. Chosen Soren facilitated t he
repatriation o f over 100,000 Korean residents living i n J apan to the North and s parred
with Mindan i n t he 1960’s, including outbreaks o f v iolence.3 Membership in Mindan
now outpaces Chosen S o ren about 4 t o 1 , and the t rend over t he past f e w ye a rs
i ndi cat es t h at et hni c K oreans are i n creasi n gl y ei t h er becom i n g n at ural i z ed J apanese
citizens or associ ating with Mindan.4
Historic Relations w i th Japanese Gove rnment
Chosen Soren j ustifies its longstanding ex istence l argely on the discrimination
faced by ethnic Koreans i n J a p a n . Although s ome Korean families h ave b een in
J apan for s e v e r a l g enerat i ons, as s peci al perm anent resi d ent s t h ey do not have t h e
righ t t o vote, cannot work for t he ce n t r a l government, and were required t o b e
fingerprinted as resident aliens until the early 1990’s.5 Together with the history of
J apan’s o ften brutal 35-year coloniz a tion o f t he Korean peninsula (1910-1945),
relations between the Korean minority and t he J apan e s e go v ernment have always
been strained. J apanese political leaders have avoided confro n t at ion with Chosen
Soren both out of fear of provoking reaction from P yongyang and out of a s ensitivity
to accusations of racial discrimination.6 Governm ent agenci es al so l argel y i gnored

1 “Murder Shines a Light on t he Live s of K oreans i n J apan,” Washington Post , J une 1, 2000.
2 “Pyongya ng’s Pinball Cash T a ils Off,” The Ti mes , December 30, 2002.
3 “Where K oreans Put a Common Culture Before Ideologi cal Di fferences,” The Observer ,
September 4, 2003.
4 “J apan’s K orean Community In T r ansition,” Chung Dae-kyun. Japan Echo , V ol. 30, No.


5 “Friends, K oreans, Countryme n,” Economist V ol. 342, Issue 7991, Nove mber 9, 1996.
6 As an example, in 1974 a K orean resident of J a pan a ttempted t o a ssassinate South K orean
President Park Chung Hee, killing his wi fe instead, but the J apanese government r efused to

the money flow from J apan to North Korea, permitted ferry links with little
enforcem ent o f s afet y m easures and cargo i n spect i ons, 7 andallowedChosenSoren
to maintain its tax -free diplomatic status for years.8
Traditionally C h o s en Soren had cl ose ties with the political left in J apan,
part i cul arl y t h e S oci al i s t P art y. But unt i l very recent l y, C hosen S o ren l eadershi p al so
enj o yed w arm rel at i ons wi t h several m em bers of t h e Li b eral D em o crat i c P art y.
Accusations have arisen regarding C hos en Soren’s ties with organiz e d c r i m e i n
counterfeiting and the d rug t rade. S ome critics s uggest that J apanese politicians may
intentionally allow cas h remittances and contact s bet ween Chosen Soren and North
Korea t o continue because of the politicians’ o wn involvement with gangster trade.
Detract ors allege that the i nterdiction o f links with Pyongyang could ex pose LDP
affiliation with the yakuza organiz ed crime syndicate.9
Chosen Soren’s R elationship w ith P yongyang
The s ecretive n ature of North Korea m akes the ex t ent of political interaction
between Chosen Soren and Kim J o n g Il ’ s regime difficult to assess. North Korea
reportedly s ends $3.6 million a year to Chosen Soren t o h elp administer t he Korean
s c h ool s i n J apan.10 Chosen Soren s ends representatives to serve i n North Korea’s
legi slat ure, the S uprem e P eople’s Assembly, as wel l as del egations to major public
cel ebrat i ons, but t h e ex t ent o f l everage and access t o pol i cym aki n g i n P yongyang i s
not clear. C hosen Soren also reportedl y runs a 2,000-member underground network
of “study groups,” called gakushu-gumi , wh i ch are affiliated with the North Korea
Worker’s Party and trai n m em bers to spy on S outh Korea and t he J apanese military. 11
In S ept em ber 2002, short l y before a d i p l o m at i c summit with Japanese P r i m e Mi ni st er
J unichiro Koizumi, Kim J ong Il publicly issued a directive t o visiting C hosen Soren
leader Ho J ong-man, o rdering t he gakushu-gu mi to disband i n adv a n c e of the
meeting.12 Although t his i ndicates direct comm unication b etween Kim J ong Il and

6 (...continued)
pursue a crackdown, citing f ears of violating K oreans’ civi l liberties. From “Responding to
Provocations,” V i ctor Cha. The J apan Times, April 24, 2003.
7 Ibid.
8 “North Korea’s T hreat to the J apan-US Alliance,” Nishioka T sutomu. Japan Echo , V ol. 30,
9 “Interdiction M ay Not J ust M odify North K or ea’s Behavior,” Mindy Kotler. Policy Forum
O n line, T he Nautilus Institute. J une 13, 2003. [h ttp:// fora/security
/0334_K otler.html , accessed 9/23/03].
10“Revolution Is Brewing at N. K orean Schools i n J apan,” Washington Post , October 10,


11“Responding to Provocations,” V i ctor Cha. The J apan Times . April 24, 2003.
12“North K orean Leader Directs Disbanding of Pro-Pyongya ng Stud y Groups in J a pan,”

the C hosen Soren o rganiz ation, reports on whether t he directive was obeyed are not
The i ssue o f h ard currency fl o wi ng i n t o Nort h K orea from J apan has b een t h e
subject of ex tensive d ebate, both o n t he question o f where the m oney goes (to
individual s o r t o t h e regime) and the amount. Before J apan’s economic bubble
co l l apsed i n t he early 1990’s, U.S. officials estimated t hat up t o $1 billion a year
could h ave b een transferred t o Nor t h K o rea from J apan, but, b y all accounts, that
fi gu re has d ecreased wi t h t h e econom i c downt urn i n J apan and t he deat h o f P resi dent
Kim Il S ung. M ost observers now agree with Nicolas E b e rs t a d t ’s es timation t hat,
even at their p eak, remittances ge n e r ally were below $100 million annually. 13
Remittances are passed either in person when Korean residents t ravel t o North Korea
or by transfers t hrough financi al institutions. According t o J apan es e F i n ance
Minister Masajuro Shiokawa, at l eas t $33 million was reported t o t he government as
transferred t o t he North i n fiscal year 2002. 14
Technol ogy Tr ansfer s
S o m e J apanese fi rm s associ at ed wi t h C hosen S o ren h ave b een i m p l i c a t ed i n
illegal plans to transfer high-tech equipment t o North Korea t hat could be used t o
d e v e l o p t he North’s nuclear weapons program. Meishin, a Tokyo-based t rading
company run by m e m b ers of C hosen Soren, has admitted t hat i t ex ported t hree
t ransform ers t h at regu l at e el ect ri cal current , a devi ce t h at can be used for u rani um
enrichment as well as missile dev e l o p m en t , to North Korea via Thailand. The
shipment, ex ported without authoriz ation b y J apan’s Mi n i s t r y of Economy, Trade,
and Industry, was o rdered by the Korea D aesong General T rading Corporation, a
company administered by t he intelligence unit of t he Korean Workers’ Party.15 US
reports have singled out Daesong as part of an ex tensive o r g aniz ation known as
Division 39 of the Korean W o rkers’ Party t hat p rovides h ard currency t o Kim J ong
Il ’s regime; s ome reports value t he cas h assets of the unit at up t o $5 billion, secret ed
i n banks i n Macau and S wi t z erl and. 16
Reportedly, J apan-based firms often go t hrough t hird countries in their d ealings
wi t h Nort h Korea. In Mei s hi n’s case, t h e t ransform ers were d est i n ed for P yongyang
through Lox ley P acific, a s ubsidiary of Lo x l ey PCL, one of Thailand’s t op

BBC Monitoring Asia Pacific, September 2, 2002.
13“Financial T r ansfers from J apan to North K orea: Estimating T he Unreported Flows ,”
Ni cholas Eberstadt. Asian Survey V ol. 36, No. 5, M ay 1996.
14“At Least 4 Bn Yen Sent t o North K orea from J apan in FY 2002,” Ky odo Ne ws , J une 6,


15“J apanese Firm Admits to Exporting Nuke-Related Devices to North K orea,” BBC
Monitoring International Reports, J uly 9, 2003
16“Curtailing North Korea’s Illicit Activities,” Balbina Hwang. Her i t a g e Foundation
Reports, August 26, 2003.

communications companies. Loxley has signifi cant busi n ess i nt erest s i n Nort h Korea
as we l l , h o l di ng ex cl usi v e 3 0 year ri gh t s t o t el ecom m uni cat i o n s ervi ces i n R aj i n -
Sonbong, a Special Economic Zone in the North. According t o p ress reports, Lox ley
Pacific o ften acts as a middl eman between Meishin and Daesong for t rade in rubber,
sugar, and o ther products. 17
Chosen Soren h as also been involved w ith at least one other non-ethnic Korean
company t hat s old military technology t o North Korea. The J apanese engineering
firm Seishin Enterprises was found to have shipped a jet mill, a m achine t hat can be
used to grind s olid fuel into fine powder for use i n missiles, to North Korea in 1994
on board t h e M a n gyongbong ferry and attempted again in May 2003 to ex port
e l ectronic s cales that could b e u sed i n t he production o f b iologi cal and chem i c a l
weapons. A senior member of a s cience an d t echnology o rganization affiliated with
Chosen Soren reportedly coordinated p ri ce nego tiations and p roduct s pecifications
for t he or d e r . 18 A fter t he J apan C oast Guard ex changed fire with and t hen s ank a
North Korean spy s hip i n December 2001, offici als d iscovered J apanese-made radar
and o ther precision devices in the recovered v essel, raising questions about J apanese
firms s upplyi ng equipment t o t he DPRK military. 19
Nar c oti c s a nd Counter fei t i ng
North Korean involvement in international d rug-trafficking h as recently come
under i ncreas ing s crutiny. In hi s a nnual report to Congress on drug-producing
nations, P resident Bu sh asserted that ev i d ence reveal ed t h at “st a t e agent s and
enterprises” in the North were involved i n n arcotics t rade. S tate Department officials
have testified t hat J apan is a m aj o r reci pient of m et hamphetamines from North
Korea, a m arket t hat, according t o S tate Department testimony, m ay have provided
up to $7 billion i n cas h profit for the regime.20 The M angyongbong passenger ferry
that links J apan and North Korea i s s u s p ected of hauling illicit shipments of such
drugs. A Nort h Korean escapee t o l d t h e Y o miuri newspaper t hat h e h ad smuggl ed
narcotics for the regime on the ferry, h anding over t he goods to members o f C hosen
S o ren, who woul d t hen p ass t he drugs o n t o J apanese gangs t ers for s al e. 21 Reported
i ndi cat i ons of t i es b et ween Nort h K orea an d t he J apanese mafia are on the rise, but
documentation of links speci fically with Chosen Soren i s s cant.

17“J apan Probe Focuses on Exports to North K orea,” Wall Street Journal , M ay 13, 2003.
18“Seishin Sold J et Mills to China, India,” Dai l y Y o mi ur i , J une 14, 2003.
19“MET I Busts N. Korea T rader,” Dai l y Y o mi ur i , M ay 19, 2003.
20William Bach, director i n the Bureau for International Narcotics and Law Enforcement
Affairs at t he U.S. Department of St ate , testimony before the Subcommittee on Financial
Management, t he Budget, and International Security, Committee on Governmental Affairs,
U. S. Senate, May 20, 2003, as cited i n “Curtailing North Korea’s Illicit Activities,” Balbina
Hwa ng. Heritage Foundation Reports, August 26, 2003. Bach did not specify a time frame .
21“Testimony on North K orea (Part I): Dr ugs, Forged Bank Bills Were Smu ggl e d In t o
J a pan,” Dai l y Y o mi ur i , August 21, 2003.

Changes to Japan’s Chosen Soren P olicy
The t est l aunch o f t he Taepodong missile over J apan in Augu st 1998 by North
Korea and the admission by Kim J ong Il in S e p t e m b er 2002 that North Korea had
abdu c t e d several J apanese n at i onal s has significantly altered t he J apanese
government’s stance towards C hosen Sore n. In the p ast year, domestic outrage over
the abductions and i ntense media coverage of the return o f five abductees has s purred
the government to crack down m ore s everely and monitor m ore closely Chosen
Soren’s i nteraction wi t h North Korea. J apanese politicians, responding to public
opinion, have become more outspoken i n t heir criticism o f P yongyang and h ave
curtailed ex i sting ties with Chosen Soren. The J apanese government has t ak en a
number o f l egal steps, e i t h er in enforcing p reviously lax l aws o r p roposing n ew
legi slation t o s tem possible illicit transfers t o North Korea.
New Contr ol s on Sea Li nks w i th Nor t h Kor ea
J apanese offi ci al s h ave recent l y i m posed and enforced m o re st ri ct regu l at i ons
for t he North-Korean operated M angyongbong ferry, which can carry 200 passengers
and 1,000 tons of cargo . It h as operated for years as t he sole link for ethnic Koreans
living i n J apan with their families i n t he No rth, usually making one or two round trips
Following the abduction admission by Kim J ong Il , a u t h o r ities have taken a
harsher line, insisting o n t horough s afety c hecks, i n spect i ons of t h e cargo , and st ri ct
adherence t o regulati ons on passenger limits. In J anuary 2003, the M angyongbong
suspended its operation for seven m onths, ostensibly t o bol ster safety requirements,
b e f o re resum i n g s ervi ce i n Augu st . S i n ce t h en, J apanese o ffi ci al s h ave d e l a ye d
departures by citing violat i ons of the S hips Safety Law and the Domes tic Animal
In fect i ous Di seases C ont rol Law. J apanes e o ffi ci al s h ave al s o o rdered i m provements
on 40 of the 50 vessels from North Korea i nspect ed this year. Offici al s estimate that
1,300 N o rth Korean ships dock at J apanese ports annually. The transport ministry
has requested a budget increase for 2004 to improve inspection o f foreign vessels. 22
Chosen Soren reportedly h as not paid local tax es s inc e 1972, when the t hen
Governor of Tokyo d ecl ared t h e o rgani z at i o n t o b e N ort h Korea’s d e fact o
representative i n J apan, entitling i t t o diplomatic tax -ex em p t status. In J uly 2003,
conservative To k yo Governor Shintaro Is hi hara rescinded t he status, d emanded
$515,000 in annual t ax es, and in early September s eized t hree Chosen Soren facilities
when organi z at i o n o ffi ci al s refused t o pay. S everal o t h er l o cal governm ent s w i t h
Chosen Soren chapters are either considering or have already dem anded s imilar t ax
paym ents. 23

22“Bar Suspicious Vessels from Ports,” Dai l y Y o mi ur i editorial, September 5, 2003.
23“T okyo Seizes 3 Chongryun Facilities,” International Herald Tribun e , S e p tember 10,


Chogi n C r e di t U ni ons
The failure of several credit associati ons that cater to pro-Pyongyang residents
also has d irected attention t o t he questionable financial operations of Chosen Soren
and h ei gh t ened publ i c anger. In t h e p ast s everal years, m o st of J apan’s Chogin (an
abbreviation for “Korean bank” in J apanese) credit unions have collapsed, reportedly
largel y due to illegal remittances to North Korea.24 Once numbering 38, only s even
such credi t associ at i ons rem a i n . 25 The b anks are accused o f al l o wi ng P yongyang
sympathiz ers to use fictitious or b o r r o w e d n ames to create bogus accounts, which
were t h en used t o channel cash t o N ort h Korea, as wel l as offeri ng preferent i al l oans
to people who donated l arge amounts t o t he North Korean cause.26 The b anks also
lent money i n ex ces s of t he collateral, which was often l and and buildings either
owned by or affiliated with Chosen Soren.27 Although t he banks are o fficia l ly
independent, t he management of many of the credit unions was appointed by Chosen
S o ren ex ecut i v es, accordi n g t o m edi a report s . 28
The b anks began failing as t heir nonperforming l oans increased, n ecessitating
the i nfusion o f public funds to protect ordinary d epositors. J apan’s Fi nancial
S ervi ces Agency aut hori z ed t h e t r a n s fer o f t he operations of several failed credit
unions to four new l enders with the s tipulation t hat t he unions sever ties with Chosen
Soren. 29 More than $3. 3 b illion i n public funds was pumped i nto t he replacement
credit u n i o n s i n 2002 alone, p rompting an outcry from t he public as the abduction
issue h eigh tened t ension with North Korea. A group of legi slators f o r c ed
government banking regu lators to insist on the appointment of a J apane s e n ational
as the credit union pres ident after revelations that the former pres i d e n t h a d earlier
served as a C hosen S o ren ex ecut i v e. 30 J apan’s m ajor ne w s p a p e rs have published
strident editorials calling o n financial aut horities to closely scru tiniz e t he new union’s
links with Chosen Soren o fficials t o ens ure i ndependence from t he organiz ation.31

24“Credit Unions Must Correct Past Shady Practices,” Asahi Shimbun editorial, August 14,


25“Hana Credit Union on Notice,” Dai l y Y o mi ur i editorial, December 19, 2002.
26“North Korea’s T hreat to the J apan-US Alliance,” Nishioka T sutomu. Japan Echo , V ol.

30, No. 2, April 2003.

27“Credit Unions in J apan Suspected of Illegal Remittances To N. Korea,” Agence France
Presse, August 29, 1999.
28“Chogin-Chongryon Ties Said Tight,” Dai l y Y o mi ur i , November 30, 2001 and “ Chogin
T okyo ‘Hid Chongryon T i es” Credit Union Allege dly Granted New Loans to Help Problem
Debtors,” Dai l y Y o mi ur i , November 20, 2001.
29“Four Lenders to T a ke Over Chogin Banking Operations,” The J apan Times , M arch 21,


30“Government t o Put 410 Billion Yen in Successor of Pro-North Korea Lenders,” Kyodo
Ne ws , December 17, 2002.
31“Credit Unions Must Correct Past Shady Practices,” Asahi Shimbun editorial, August 14,

2002 and “ Hana Credit Union On Notice,” Dai l y Y o mi ur i editorial, December 19, 2002.

U.S. Policy Options and C onsiderations
Because of the anti-North Korean climate in J apan following the abduction
admission and North Korean missile tests, J apan’s actions over t he past s e v e ral
months suggest an increas ed willingnes s t o confront Chosen Soren, which would be
in line w i t h previous U.S. proposals for J apan t o choke off funds to North Korea.
J apanese meas ures to promote t his goal might incl ude continued close surveillance
of the restructured b anks serving C hosen Soren m embers, a re-invigo ration o f efforts
to r e gu l ate the flow o f p achinko profits, and more robust enforcement o f ex port
controls on vessels bound to or originating from North Korea. Some observers have
suggested that the United S tates p ress J a pan t o cut off all official trade (about $40032
million i n 2001) with North Korea, much of which i s facilitated b y C hosen Soren.
J apan has al ready rel ax ed its sanctions criteria by citing t he Foreign Ex change a nd
Foreign Trade Control Law, which permits the govern m e n t t o impose s anctions in
order t o p reserve p eace, instead of requiri ng a United Nations S ecurity Council33
resol u tion. Overal l reform and i n creased t ransparency of J apan’s fi n anci al
institutions could also prove helpful i n following the m oney t rail to Pyongyang.
Congress and t he Administration m ay pursue m ultilateral efforts as well. The
Bush Administration recently has p romoted cooperative m easures with al lies t o
pressure North Korea, such as the 11-count ry Proliferation S ecu rity Initiative (PSI)
charged with interdicting vessels suspect ed of carrying illicit cargo. S uch efforts t o
crack down o n i nternational d rug and weapons trafficking m ay reveal more illicit ties
bet w een C hosen S o ren m em bers and N o r t h Korea, which could t rigger additional
puniti ve act i ons. Opt i ons i nvol vi ng t h i rd p art i es i ncl ude aski ng Thai l a nd to eliminate
technology t ransfers to North Korea that are rep o r t e d t o h ave t ransited t hrough its
t erri t o ry or aski ng Aust ri a and Macau t o curt ai l b ank t ransfers t h at oft en p ass t hrough34

thei r financi al institutions.
32T r ade f igures fro m J a p a n Statistical Yearbook 2003. Management and Coordination
Agency, J apan Statistics Bureau, T okyo.
33“Sanctions On North K orea Eyed Over M i s s i le Launches,” Japan Policy and Politics ,
34“Money T rail: In North K orea, Secret Cash Hoard Props Up Regi me — D e f ectors,
Intelligence Sources Say Division 39 Provi des Billions to Kim J ong Il — Ginseng and
Counterfeit Bills,” Wall Street Journal , J uly 14, 2003.