Thailand-North Korea ties in the spotlight
As Washington tightens the screws on Pyongyang's trade, Bangkok is under pressure to curtail its robust commercial relations with the isolated regime
When US Ambassador to Thailand Glyn Davies recently asked Bangkok’s coup-installed military government to support international sanctions against North Korea, he reflected concerns by analysts that Pyongyang could build nuclear and other weapons with dual-use imports and profits from exports.
“As a leader of Asean (the Association of Southeast Asian Nations), Thailand has an important role to play in the broad effort to signal to North Korea it will be isolated if it does not suspend its weapons programs and return to talks on the basis of a verifiable commitment to denuclearize,” Davies said.
“Cutting off the financial lifelines that enable North Korea’s proscribed programs,” is vital, the ambassador said. When asked what, if any, businesses in Thailand enable Pyongyang’s prohibited programs, US Embassy spokeswoman Melissa Sweeney replied: “The ambassador’s op-ed speaks for itself.”
The envoy’s 827-word statement was published on the Bangkok Post’s opinion page on May 22, the third anniversary of the coup when Thailand’s US-trained military toppled an elected government. The ambassador’s statement supports efforts by President Donald Trump and the United Nations to tighten sanctions against Pyongyang.
During the weeks after Davies’ statement, Thai officials and local media made no mention of the envoy’s message, and instead focused on Thailand’s lack of freedom during the past three years under military rule.
Thailand’s foreign ministry did not respond to repeated e-mailed questions about the ambassador’s statement. There are no confirmed public reports that any deals by Thais violate sanctions. Bangkok has offered in the past to play a “neutral” role “mediating” talks by the international community with Pyongyang.
Thailand and North Korea “have fairly robust, unreported trade ties,” George McLeod, a Thailand-based political risk consultant, said in an interview. “These links have developed in part because the North Korean government has become concerned about its over-reliance on [China’s] goods, and has sought to tap other feeder markets,” McLeod said.
“From Thailand’s perspective, the main concern is to avoid reputational damage from having the ‘Made in Thailand’ label attached to goods appearing in North Korea,” he said. ”To avoid this, goods from Thailand are exported to two border towns” in China along the Chinese-North Korean frontier.
McLeod claims they are then re-labeled as Chinese goods and exported by truck to North Korea in trade he reckons is not carried out under Thai government auspices but is done by individual businessmen.
“In mid-2016, I met with a South Korean businessman who was exporting (edible) chicken feet from Thailand to Dandong, and over the border,” McLeod said. Dandong, a thriving Chinese port on the Yalu River separating the two countries, is North Korea’s gateway for foreign business and travel.
“There are absolutely no statistics on this trade because it is hidden underneath Thai exports to China,” he said, saying there are no indications of banking relationships.
“While North Korean illicit shipments — such as military equipment and counterfeit banknotes — were repeatedly intercepted by Thai authorities, so far Thailand has not been regarded as a major source of weapons of mass destruction-related North Korean imports,” said Balazs Szalontai, a Seoul-based associate professor at Korea University’s North Korean Studies Department.
“The list of Specially Designated Nationals (SDN), which is periodically updated by the US Treasury, has not implied a strong link between the two countries,” Szalontai said, who also serves as an editorial board member of the North Korean Review journal.
Thai businesses did US$53 million in official trade with North Korea in 2016, making it Pyongyang’s fourth largest partner. China was Pyongyang’s biggest trade partner in 2016 with US$6.1 billion in deals, according to reports. India followed with US$145 million, the Philippines had US$89 million, and Russia’s trade was reportedly US$84 million.
During previous years “North Korea’s recorded imports from Thailand have been traditionally dominated by rice, rubber, wood, metals including stainless steel, minerals, chemicals, plastics, electronic circuits, and computer parts,” Szalontai said.
“Stainless steel and electronic circuits were potentially or actually within the range of the UN sanctions imposed on North Korean imports, as they can be of dual use — i.e., potentially useful for North Korea’s missile programs,” he said.
It was unclear what items Thailand sold to North Korea during 2016 and 2017, or how recently Thais exported stainless steel and electronic circuits, or if those items violated the newest sanctions.
“North Korean trade enterprises active in Thailand habitually preferred to operate in a non-transparent or semi-transparent way to evade inspections and sanctions, not the least because they often functioned as front organizations for illicit economic activities,” Szalontai said.
North Korea previously exported to Thailand gold, iron, steel, electrical machinery, chemicals, and seafood. North Korea’s Internet connections rely on a joint venture with a subsidiary of Loxley, a family-owned Thai telecommunications company which has publicly operated in North Korea for more than a decade and built their first mobile phone network.
International sanctions forbid trading weapons, ammunition, nuclear items, some metals and bank transactions, plus a ban on North Korean-flagged flights, global travel by some North Korean people and exporting luxury goods and other specific items to Pyongyang.
Other deals, such as importing and exporting some commodities, are occasionally allowed. Pyongyang also operates restaurants in Thailand, Malaysia, Laos, Cambodia, Nepal and across China, plus the Middle East and Africa.
“Most of the money earned goes to the regime,” Jim Kelman, a retired US State Department officer who was based in South Korea, Thailand and elsewhere in Asia, said in an interview last year.
“The restaurants can, and likely are, being used to launder illegal or counterfeit funds in [some of] the countries in which they operate. This is an ongoing concern of the US and the international community,” said Kelman, now a program officer at the Washington-based Meridian International Center, a private non-profit agency involved in global leadership and cultural diplomacy.
“With the advent of stronger international financial sanctions, there are fewer ways that North Korea can earn hard currency,” Kelman said. North Korea’s largest embassy in Southeast Asia is located in Bangkok, as is South Korea’s.
Last month, Trump boosted Thailand’s coup leader General Prayuth Chan-ocha, who is now prime minister, by inviting him to the White House in a visit expected to take place soon. In 2015, North Korea’s then-Foreign Minister Ri Su Yong visited Bangkok and asked Thailand to invest in his country.
“They are not open to inviting just any country, but they are keen on inviting us,” Thailand’s then-military appointed Foreign Minister Tanasak Patimapragorn said at the time. They discussed Pyongyang’s interest in “food security, agriculture and public health, ICT (information and communication technology) and tourism,” Tanasak said.
“Thailand’s unusual position as a top trading partner of North Korea gives it a potentially large role in helping carrying out sanctions,” the US Embassy in Bangkok said in a 2006 cable, according to the anti-secrecy website WikiLeaks.
Titled, “Thailand’s Trade With North Korea: Doing Business With the Hermit Kingdom,” the cable said trade was “relatively insignificant for the Thais… but unusual behavior by North Korean companies in Thailand raises some suspicions as to what other activities they [North Koreans] may be up to.”
The US “Embassy also speculates that North Korean businesses may be passing themselves off as generic ‘Koreans’ to avoid controversy,” the document said. “Deception appears to be standard practice for North Korean companies located in Bangkok,” including the use of addresses that are “mail drops and not the actual location.”
Incorrect phone numbers on invoices, suspicious financial statements and possible bribery also made it difficult for the US Embassy to track deals between Thai businesses and Pyongyang. “North Korea’s trade relationship with Thailand is shrouded in a veil of mystery,” the cable said.
Richard S Ehrlich is a Bangkok-based journalist, reporting news from Asia since 1978