The Marmot’s Hole

UPDATE:  I could be wrong about Cowie, if what some say about his bank (see comments section) is true and he only does business with foreign-owned firms.  The fact that he seems to deal in relative chump change is also a point in his favor.  He may in fact be only a very small and unimportant cog in Pyongyang’s rickety economic machine.  Of course, this does nothing to shake the sap theory.  Only Thae Yong Nam knows for sure.  If none of this makes any sense, read the original post. 

ORIGINAL POST:  First it was China, now Pyongyang’s money laundry scheme has been driven out of Vietnam (Yonhap):

Vietnamese banks have already closed down North Korean accounts over the past few weeks, most likely forcing Pyongyang to move its money to its last remaining haven, Russia, said Peter Beck, head of the International Crisis Group’s Seoul office, on Tuesday.

Beck said Nigel Cowie, general manager of North Korea’s Daedong Credit Bank in Pyongyang, e-mailed him last week and said Vietnamese banks have shut down Daedong’s and other North Korea-held accounts.

It’s a fair cop, but it seems that Johnny was one step of The Man on this one:

Daedong expected such a move by Vietnam after U.S. Treasury Undersecretary Stuart Levey visited Hanoi early last month, and had moved its funds elsewhere, Cowie said in the e-mail.

(Note to the Treasury Department:  Try to be a little more low-key next time.) 

So where will Kim Jong-il launder his counterfeiting and drug money?  One guess:

He did not say where the money was moved to, but Beck said it’s most likely Russia.

“The only financial window they (North Koreans) have left now is Russia, I am told,” Beck said at a roundtable on North Korea hosted by the Mansfield Foundation.

It is a pretty interesting piece, so check it out before Yonhap folds it up.

More here.

Who is Nigel Cowie? (keep reading to find out)

This is good news but I am left wondering; who is Kim Jong-il’s white-monkey-money-man?  A few quick clicks give us some intel on one Mr. Nigel Cowie.

This piece from the Wall Street Journal (2000) says that Cowie came to Pyongyang in 1995 to organize “joint ventures” in North Korea.  His Daedong Credit Bank (DCB) is the only bank in the DPRK with a foreign general manager according to this profile by the European Business Association of Pyongyang.  That profile includes this little morsel:

As a responsible member of the international financial community, and as a service to its customers, DCB takes very seriously its obligations with regard to money laundering.  It was the first bank in the DPRK with a written anti-money laundering procedure manual circulated to all staff and accepted by its overseas correspondent banks.

The site also links to a DCB press release in which Cowie denies the his bank engages in money laundering.  It covers a lot of interesting material and is well worth the read.  Among other things, we discover that Cowie is also the head of Phoenix Commercial Ventures Ltd (PCV), which specializes in joint ventures in the workers paradise.

Cowie’s partners at PCV are:

• Ken Frost, AKA: “The Living Brand” (No, I did not make that up.)  Guess what, he blogs.
• Oliver Roux, whose resume includes: ”Over thirty years international experience in technology transfer, construction, industry and project management.”  (emphasis is mine) Exciting.  (UPDATE:  Actually, I do not think it is exciting.  I do not think the xenophobes in Pyongyang would trust a white boy with any exciting technology transfers.)
• Thae Yong Nam is the only North Korean on the board, which means he is the only one with real pull in the bunch.  There is little about him on the Internet.  From the PCV site we know that he a director of the Korea Committee for the Promotion of External Economic Co-operation (CPEEC) a DPRK government organ.

So are Nigel Cowie and his European buddies in Pyongyang…

1. ‘little Eichmanns’ (to use Ward Churchill’s imfamous term) who are knowingly making a profit by being the final wash cycle of Pyongyang’s money laundering and thereby helping prop up that despotic regime,
2. cutting-edge capitalist who are helping North Korea reform its economy or
3. simple saps who think they are cutting-edge capitalist who are helping North Korea reform its economy?

Only Thae Yong Nam knows for sure but my guess would be #3.  Ten years is hardly enough time for a foreigner to be truly trusted by the Kim Jong-il and his xenophobic assistants.  No, I suspect that Cowie is the financial equivalent of a drug mule unknowingly serving Kim Jong-il’s illegal activities. 

This bit that Cowie wrote in an essay for the Nautilus Institute strengthens that hunch in my mind:

Now, the way most of these customers get paid by local buyers is in cash. They bring the cash to the bank, we check the cash for counterfeits and credit it to their accounts with us. Then at the end of the month or whenever, we remit the funds out to their suppliers overseas. But because they are mainly importing, we tend to accumulate cash here in Pyongyang, and sometimes have to physically deliver it to banks overseas. There is nothing in any way tainted with this cash, and it is not counterfeit, it represents funds from legitimate business activities by legitimate customers, and the only reason it comes in cash is because of the peculiar circumstances in the DPRK.

What I suspect is happening here is that the Norks are distributing their counterfeit dollars through Chinese gangs and overseas diplomatic posts.  They then combine that money with dollars from Geumgangsan (which only takes dollars) and dollars and yen from drug running.  The final step is to ship that money out through DCB (among other sources). 

So when Cowie says his customers mostly handle imports, of course that is true.  Do you think the Norks would trust him with their drug and counterfeiting export businesses?

In an ideal world, the money trail would be stopped before it reaches Cowie.  But, since American investigators cannot get into North Korea to do that, putting the squeeze on DCB and Pyongyang’s other final cycle launderers is the next best thing.