North Korean House of Cards

endeavor. Regardless of Jang’s motives, Kim Jong-un most likely viewed his uncle’s
actions as dangerous to his own control of the regime. 486
d. Restructuring the Royal Economy
The removal of Jang Song-taek from the leadership was the first move in
what appears to be a major revamping of the command and control structure of
the Royal Economy. The new structure is still unclear and assessments of who
controls what are based on rumors emerging from various defector networks. 487
In the days after Jang’s execution, Kim Jong-un reportedly issued orders on
the reorganization of the regime’s foreign currency earning apparatus. Notably, the
parts of the apparatus that were tied to the KWP Administrative Department were
dissolved and reintegrated into the KWP OGD.
• Department 54, which had been at the center of Jang’s growing
“empire,” was placed under Office 39.
• Office 39 was removed from the KWP FAD and transferred to the
KWP OGD.
• Daesong Bank was separated from Office 39.
• Department 44, which oversees the military’s foreign currency earnings,
was reportedly moved from the GSD to the GPB. 488
• Approximately thirty trade companies, which had been moved to the
Cabinet by Jang Song-taek, were returned to the military. 489
486 As a final indignity in November 2013, soon after Jang Song-taek’s arrest, Kim Jong-un
was informed of a debt of $38 million that Department 54 had incurred in China as a result of several
agreements with Chinese trade organizations and companies that were allegedly tied to Chinese security
organizations. According to sources in Seoul and Beijing familiar with the issue, Kim Jong-un tasked
Office 39 with repaying the debt.
487 “Kim Jong-un Orders Agents Overseas to Return Home to Achieve Generational Change,”
Sankei Shimbun, December 22, 2014. According to recent regional reporting, Kim Jong-un has issued
orders calling for the return to North Korea of agents, smugglers, and other officials assigned to longterm
overseas duties. Some suggest that this could be tied to a generational turnover. It, however, could
undermine some of the on-going hard currency operations since it would interfere with transaction networks
based on personal connections with those in local underground communities necessary for foreign
currency trading.
488 Choe Ryong-hae, who was the Director of the GPB at the time, allegedly tried to persuade
Kim Jong-un to put Department 54 under the GPB.
489 “Kim Jong Un Reorganizes North Korea’s Foreign Currency Earning System; Kim Yo-jong to
Oversee Party’s Foreign Currency Earnings,” NK Intellectuals Solidarity, January 10, 2014.
Ken E. Gause
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