South Korea is making it more difficult for defectors to send money to their families

Yalu River Iron Bridge in Dandong, China. In the distance, across the river, North Korea is visible. (Apik, Courtesy of Shutterstock, Inc.)

“I once cried and swore all night, praying the broker who stole my money would die. I lost all I had. After that, I borrowed money to send to my father. It broke me to think about him being ill and dying because he was penniless.” 

The woman, who fled as a teenager in 2009, was telling how she worked to send money to the family members she had left behind and how that process has now become more difficult. 

At first, she felt guilty and wanted to atone for leaving her sick father. At that time, she was studying. She worked in a factory in Gyeonggi Province during vacations. To earn extra money, after morning classes, she washed dishes in restaurants.

She finally saved enough to send home. She did this in 2011 through a broker in South Korea. 

She didn’t trust the person, so sent just a small amount at first. The commission was 20 percent. The problems came with the second, third, and fourth times she sent money. None of it reached her father. 

“When I found out I had been scammed, I really lost the will to live. The broker here feigned ignorance and said the Chinese go-between didn’t deliver it properly. They probably kept it for themselves,” she said. In all, she lost over 20 million won (US$15,000).

She reported it to the police officer who, as with other defectors, was personally assigned to protect and help her for the first five years. But he told her there was no legal way to get the money back. 

She found more reliable brokers and was eventually able to send enough so that her family members could eat and stay warm and live relatively comfortably.

Her concern now is that it is becoming more difficult because of the government. 

Sending money to North Korea is illegal under the Foreign Exchange Transaction Act. But authorities long turned a blind eye on humanitarian grounds and because the amounts were not significant. 

“No one raised the issue of remittances to North Korea for decades,” said a defector named Kim. “The reason I can endure such loneliness in South Korea is that I get to hear the words, ‘My family received the money.’” 

But then last July police began investigating defector remittances. Some media suggested the police were bent on proving themselves before the new year when the right to investigate anti-communist cases was to be transferred to them from the National Intelligence Service. 

Defectors are now anxious that the police may enforce an outright ban. 

Generally, brokers in the South are themselves defectors. With won remittances, they deduct a fee (around 50 percent now) and transfer the rest to Chinese brokers who forward the remitted amount in yuan to North Korean brokers, who then deliver the funds. 

The government is cracking down on the grounds that the brokers are in violation of the rule that requires foreign exchange transactions to go through banks. The problem for defectors is that, with Chinese traders who deal legitimately with North Korea not willing to take the obvious risk of sending money through formal channels, there are no other options.

One of their arguments is to point out that remittances to North Korea serve a greater purpose as far as South Korean interests are concerned than economic support. They have the effect of guaranteeing the ‘right to know’ of North Koreans.

“Banning remittances to North Korea is like killing a chicken to scare monkeys,” said Choi, a defector in her 20s who has been living in Seoul for six years. 

She contrasted it with funds remitted to families by North Korea’s overseas laborers. “Foreign workers send money earned abroad without proper tax compliance. This is clearly illegal,” she said.

“I understand why people here might see remittances to North Korea as a problem, but they should think more broadly. This flow of money helps us get information about North Korea. But, there is something more important. When I was in the North and received money from my mother who was in the South, it sparked in me a longing to go and taught me something basic about capitalism. This led to my defection.”

Choi said that South Korea even learned of the existence of some previously unknown prisons and changed locations of others through the process of defectors sending remittances to their families. 

“It is evident that allowing remittances for humanitarian reasons has had the effect of bringing in information about current conditions in North Korea, including its market economy. Blocking remittances to North Korea is not desirable even from a national security standpoint,” she said.

Lee Jia

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