N. Korea forms group to battle illegal foreign currency transactions
North Korea has moved to severely crack down on potential negative effects of the floating of government bonds last month, including the forming of a new law enforcement “group” to crack down on illegal foreign currency transactions.
According to a Daily NK source in North Korea, North Korean authorities recently set up a group to crack down on price gouging in the sale of foreign currency (namely, selling foreign currency at an exchange rate higher than that set by the state) along with enforcing a ban on the large-scale buying and selling of foreign currency by individual currency brokers.
The bonds were issued in mid-April to collect foreign currency circulating in the country. There are reportedly concerns among North Korean government officials that the bonds could cause a sudden increase in currency exchange rates, which, in turn, could lower the value of the North Korean won.
The newly-organized Group 1118 consists of members from the local offices of the Ministry of State Security (MSS) and the Ministry of People’s Security (MPS), along with members of the law enforcement divisions of local people’s committees. They are supposed to monitor the activities of the foreign currency brokers registered with local police stations.
Group 1118 officials can arrest any foreign currency broker, who is caught for buying or selling USD on-the-spot, and can detain the suspects in facilities outside of their area of residence.