Angle: North Korea becomes a source of revenue for the sanctions-breaking smartphone business administration

[Seoul, September 26, Reuters] --In North Korea, with the rapid increase in domestic demand for smartphones, the system side has gained considerable profits by using low-priced imported hardware that has passed the sanctions imposed by the United Nations. ing. It was revealed from interviews with North Korean defectors and experts, and analysis results of North Korean smartphones.

Economists estimate that 6 million people, or one-quarter of North Korea's total population, currently own mobile phones. Mobile phones have become an essential tool for participating in the Yami market economy, an important source of income for many people.

Reuters interviewed about 10 North Korean defectors and experts about the usage of mobile devices in North Korea. At the same time, we examined the reports and advertisements of the North Korean state media regarding mobile devices and analyzed two North Korean brand smartphones.

An analysis of North Korean smartphones revealed that Taiwan-made semiconductors and Chinese-made batteries were used, and that the open source "Android" provided by Google was installed as the basic software (OS).

UN sanctions imposed in 2017 for North Korea's weapons development program prohibit the import of mobile phone hardware.

North Korean leader Kim Jong Un is promoting wireless networks and domestic brand mobile phones through official speeches by state media and visits to mobile phone factories. It is reported that Huawei Technologies of China is supporting the network construction.

According to experts and North Korean defectors, standard North Korean mobile phones sell for $ 100- $ 400 in state-owned shops and private markets. The procedure for joining a mobile communication carrier is carried out at a store directly managed by the Ministry of Telecommunications.

Mobile phones are usually purchased with a service plan that includes up to 200 minutes of talk time. According to a mobile phone ad you see in North Korea, the prepaid plan costs about $ 13 per 100 minutes of calls.

These charges are equal to or higher than those borne by mobile phone users in other countries, but according to South Korean government data, the average monthly income of North Koreans is about $ 100, which is only about 4% of South Korea. not.

International brands such as Apple's iPhone aren't openly sold, but North Korean defectors say they buy abroad and use domestic SIM cards. ..

North Korean mobile phones can only be dialed domestic numbers and have some unique specifications in terms of security.

File downloads and transfers are severely restricted. On the model "Pyongyang 2418", when trying to install an "unconfirmed program", a pop-up warning saying "Installing an illegal program may cause the mobile phone to malfunction or the data may be destroyed" is displayed. I found out that it would come out.

"North Korea has installed algorithms and software to prevent data copying and transfer on domestic mobile phones," said Lee Yang-hwan, a South Korean software expert who studies North Korean smartphones.

Looking at apps such as maps, games, and English dictionaries, it seems that they were developed by North Korean engineers at state-owned enterprises and national universities.

According to the UK-based cybersecurity company Hacker House, Kim Jong-un has developed a domestic monitoring tool for mobile phones.

When a user accesses illegal or unapproved media, a warning is generated and stored inside the device. According to Hacker House, the modified "Android" OS also monitors and tracks users.

We asked the UN representative of North Korea for comment, but did not get a response.

However, North Korea has developed a gray market economy since the dire food shortages of the 1990s, where mobile phones have become an important asset.

A young North Korean woman with the surname Choi sold two pigs and herbs smuggled from China to earn the 1300 yuan her family needed to buy a cell phone in 2013. He told me about her memories.

She used her mobile phone to arrange deliveries from wholesalers in order to successfully sell Chinese clothing and shampoo.

"I found that there was a way to earn more than the official salary," Choi said. After that she fled to South Korea as a North Korean defector. She didn't give her full name, fearing retaliation for her relatives who still remain in her North Korea.

A survey of 126 North Korean defectors who said they were using mobile phones this year found that more than 90% "improved their daily lives with mobile phones" and about half "used for business". I answered.

"There are millions of people using mobile phones. Sometimes they need it to make a living, and some use it to show off their affluence," he said. Mr. Shin Minheo, executive director of the Korean Reunification Organization, a South Korean defectors support organization that conducted the survey. "And their phone bills are making a lot of money for the government."

According to Kim Bong-sik of the Korea Institute of Information and Social Development, it is difficult to estimate the government's income from telephone charges, but considering the scale of the mobile phone business, it may be one of the largest sources of income for the nation. It is said that the sex is high.

The two smartphones of the "Pyongyang" brand verified by Reuters use chips made by Taiwan Media Tech, and are equipped with the OS "Android" provided by Google and North Korea's original security software. In the advertisement of the "Arirang" brand terminal, it is appealing that it also uses MediaTek chips.

The smartphone "Pyonyang 2423" manufactured last year is equipped with a chipset called "MT6737" from MediaTek, and has one SIM card slot and one memory card slot. Judging from the serial number, the manufacturer of the memory card is Toshiba in Japan.

According to the product identification number, the smartphone was manufactured by the Chinese company Ziony, a manufacturer of low-priced smartphones.

According to Google, "Android" is open source and can be used by any hardware maker for free. Therefore, there are no violations of export restrictions on North Korean smartphones. MediaTek said in a statement to Reuters that it had never exported its products to North Korea and was in full compliance with economic sanctions. Toshiba also states that it has no transactions with North Korea.

I asked Ziony for comment, but I haven't received an answer so far.

"North Korea can't make a cell phone without foreign parts and technology," said researcher Kim. "In other words, we are violating sanctions to continue our mobile phone business."

According to official customs data, North Korea imported $ 82 million worth of mobile phones from China in 2017. It is the third largest import item after soybean oil and textile products.

The value of mobile phone imports in 2018 has been reduced to zero due to economic sanctions.

But while sanctions have eradicated official imports, experts and North Korean defectors say the trade in Yami at the China-North Korea border appears to be continuing.

"It's very easy to smuggle mobile phone hardware at the China-North Korea border," said William Brown, a former US intelligence official who studies North Korea.

According to Brown, the inclusion of intermediaries makes it difficult to tell who is the party to the sanctions breaker.

China is North Korea's only major ally, but China's mobile phone industry includes a large number of almost unknown local smartphone makers.

Inquiries to Chinese officials were forwarded to the Ministry of Industry and Information Technology, but the response was rejected. While China has repeatedly stated that it is observing UN sanctions, it justifies its self-proclaimed "normal trade" with North Korea.

Major brands in the Chinese telecommunications sector also once supplied North Korea.

According to the Nautilus Institute of the United States and the North Korean analysis site "38 North," Chinese giant technology company Huawei was visited by the late Kim Jong Il in 2006 after being visited by Kim Jong Un's father. It is said that it was supplying North Korea with 3G network equipment.

The US Department of Commerce has been investigating Huawei since 2016, and there is information that it is verifying whether the company violates export control rules in connection with sanctions against North Korea.

Last year, ZTE agreed to pay a $ 1 billion fine for violating US sanctions, including shipping telecommunications equipment to Iran and North Korea.

Reuters asked Huawei and ZTE for comment, but did not get a response.

(Translation: Acrelen)

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