ON 16 APRIL 2003, off the coast of Australia, aerial surveillance of the North Korean freighter Pong Su led police to follow two Chinese suspects as they left the beach and headed for a nearby hotel. The following morning police apprehended them, seized 50 kilograms of pure heroin, and discovered the body of a North Korean buried near a dinghy on the beach where the two Chinese suspects had been seen the day before. The North Korean had drowned after his dinghy capsized while bringing the heroin ashore.
The next day, the Pong Su headed east through Bass Strait, then turned north up the Australian coast. Police intercepted the ship but were unable to board because of heavy seas. Police summoned the Navy, and early on 20 April, Her Majesty's Australian Ship Stuart radioed the Pong Su to prepare to be boarded. Special Air Service troops descended from a helicopter while others boarded the Pong Su using rigid-hull, inflatable boats. The force captured 30 crewmembers, ending a 72-hour incident that proved what many had suspected: North Korea is involved in producing and trafficking drugs. North Korea vehemently denies this, but evidence to the contrary is mounting. According to the Bureau for International Narcotics and Law Enforcement Affairs at the U.S. Department of State, at least 50 incidents in more than 20 countries around the world link drug trafficking to North Korea.1
In other countries, the drug business is operated by underground organizations; in North Korea, government-run trade companies or military authorities headquartered in Pyongyang operate the business.2 According to international affairs specialist Raphael Perl, North Korea is probably the only country in the world whose government is heading its drug-trafficking effort.3 What is driving North Korea to engage in drug trafficking? The answer lies in the fact that the country is economically crippled, having an annual gross domestic product per person in 2003 of just $1,000 and a nuclear energy and weapons program that cost $200 million (in 1998).4
North Korea began producing drugs in the late 1970s in the mountainous Hamgyong and Yanggang provinces, selling the drugs in earnest when Kim Il-Sung, former leader of the Democratic Peoples Republic of Korea, toured HamgyongBukto province and designated Yonsa an opium farm.5 The local province party committee created the farm and guarded it with security agents. The North Koreans then began producing opium at collective farms in Hoeryong, Musan, and Onsong.
North Korea does not hide the fact it cultivates poppies, but claims the plants are used to produce pharmaceuticals. In 1995, North Korea allegedly harvested 40 metric tons from a 4-square-mile area, qualifying the nation as a major drug-producing country under the terms and conditions of the Foreign Assistance Act of 1961. However, because of insufficient data to substantiate North Korea's production levels, North Korea was not placed on the "Drug Majors" list.6
In the 1990s, North Korea's economy suffered greatly when Chinese and Russian aid was reduced and legitimate exports fell more than half. To offset its losses, North Korea began a search for new sources of foreign currency. By 1999, in a money-saving effort, North Korea shut some of its embassies and required others to support themselves financially.7 Diplomats either had to work to make money or use locally established trading companies, which in reality were offshoots of bigger trading corporations based in Pyongyang. The embassies were expected to be self-sufficient and to send money back to Pyongyang. According to one source, it did not matter how they raised the money.8
Production and Distribution
The CIA doubts North Korea cultivates poppies only to produce pharmaceuticals. Having watched the area during the Clinton Administration, the Agency estimates North Korea has from 10,000 to 17,000 acres (16 to 27 square miles) under poppy cultivation, which would allow it to manufacture 30 to 44 tons of opium, enough to make 3 to 4. …