North Korean House of Cards

gifts through their place of employment. Every North Korean organization had a
department dedicated to gift-giving. On New Year’s Day and key birthdays, these
departments would receive gifts from Kim Jong-il’s Personal Secretariat for distribution
to its workforce. Presumably, instructions accompanied the gifts indicating to whom
they were to be given. The branch office of the OGD made note of who received
what gift and reported back up the chain of command.
b. Weapons Sales
As noted earlier, Kim Il-sung removed the defense sector from the state
economy in the early 1970s. But instead of becoming a fully independent part of
the North Korean economy, it was integrated into the Party economy under the
KWP MID and the SEC. This apparatus, which runs sales and acquisitions through
a number of companies and trade firms, was tied to the Royal Economy via strong
connections to Offices 38 and 39. As such, a portion of the defense industry’s
foreign currency earnings was redirected to the coffers that supported Kim Jong-il’s
“revolutionary funds.”
Open source reporting suggests that North Korean defense sales fall
largely under the purview of the Second Economic Committee (SEC), which is
largely responsible for the manufacturing side of the defense-industrial complex.
Founded in the early 1970s, the SEC has operated trading companies to represent
state interests in weapons transactions with foreign countries. These organizations,
managed by the External Economic General Bureau, were assigned geographic
responsibilities, such as the Yongaksan Trading Corporation and the Puhung Trading
Corporation, both believed to specialize in the former Soviet Union. 406 Similarly,
the Korean Mining Development Trading Corporation (KOMID) and its many
affiliates were responsible for South Asia and the Middle East. 407 These were the
more well-known parts of the proliferation apparatus that North Korea used to
conduct its weapons sales. This was also the part of the apparatus that the United
guidance officers from this department distributed these gifts throughout the country at special loyaltypledging
ceremonies. The gifts were paid for from a special department account funded by one percent
of the state budget and foreign exchange earnings from over fifty companies managed by the department.
It is highly likely that the Kumsusan Assembly Hall Accounting Department and General Bureau 73 are
different names for the same organization.
406 Yim Ui-Chul, “DPRK Missile Industry, Technology Examined,” Tongil Kyongje, August 1999.
407 KOMID fell under U.S. government sanctions following the discovery of a shipment of
Hwasong-6 missiles to Yemen in 2003.
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