The Koreas | Economy | East Asia

North Korea Earns Foreign Currency Through a Shadow IT Industry

“We get most of our work from North America and South America,” a cadre involved in the efforts said.

North Korea Earns Foreign Currency Through a Shadow IT Industry
Credit: Illustration by Catherine Putz

The South Korean government recently announced a warning regarding North Korea IT personnel with the goal of preventing North Korea from earning foreign currency through cyberspace. North Korean IT personnel reportedly account for a growing portion of the country’s effort to secure cash for its nuclear and missile programs. So, what are these IT experts doing? And how are they living?

In December 2022, Daily NK interviewed Mr. A, a cadre who monitors North Korean IT personnel in China.

He is tasked with surveilling the movements of North Korean IT personnel, who operate in small groups of 10 to 20, as well as those of the cadres who manage them, and reporting his findings up the chain of command.

Since Mr. A regularly watches over how they live, he could tell Daily NK in detail how North Korean IT personnel in China are earning foreign currency, what their living environment is like, and which difficulties they must contend with.

According to him, North Korean IT personnel currently dispatched to China live like prisoners, lodging communally in narrow apartments or office spaces. He said they work long days of 18 hours or more, earning up to $20,000 a month collectively in foreign currency.

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

North Korean IT personnel are civilians, but they are dispatched overseas after applying to recruitment drives for overseas workers by major state agencies such as the Munitions Industry Department, Ministry of Defense, Reconnaissance General Bureau, Ministry of State Security or Central Committee, or after being recommended by one of these agencies.

All these agencies dispatch and manage IT personnel to earn foreign currency, but the workers’ duties differ slightly from agency to agency, since each organization uses them for slightly different goals.

For example, personnel belonging to the Munitions Industry Department or Ministry of Defense focus on illegal activities that can net big scores such as robbing or hacking cryptocurrency because they must gather money for munitions — something called “January 8 funds” — to send to the Workers’ Party.

On the other hand, personnel with the Reconnaissance General Bureau or Ministry of State Security often earn relatively small amounts of foreign currency to send as party funds while performing their chief duty, the collection of intelligence.

Most North Korean IT personnel are concentrated in China, where they can freely use the internet while staying close to North Korea.

The Chinese provinces of Liaoning and Jilin reportedly host the most North Korean IT personnel.

Mr. A told Daily NK that because personnel can carry out their duties anywhere there is functioning internet – and because dispatching and managing personnel far from home can prove challenging – North Korean IT workers dispatched overseas make areas along the border with North Korea their chief place of operations.

The following is the full text of the interview with Mr. A.

Daily NK (DNK): How do North Korean IT personnel dispatched to China usually make foreign currency?

Mr. A: They receive money for completing orders from the U.S., Canada, and South American countries to make computer programs, build websites and develop different apps for mobile phones. They also build all the programs for e-commerce sites. They get a lot of orders because they do the work for lower prices. However, incomes differ wildly between individuals since orders demand different specs and skills differ a bit person-to-person.

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

Recently, the South Korean government said that North Korean IT workers could be faking their nationality or identities to get work from South Korean companies and issued a warning about this state of affairs. Did you know about this? And what kind of impact will a warning like this have on the activities of North Korea’s IT personnel?

I watch South Korean news every day. Naturally, I know about news that has to do with us. However, our usual area of operations isn’t South Korea. I said this a bit earlier, but we get most of our work from North America and South America.

In the computer industries of other countries, few companies check which country you are from or your identity before giving you work. They just give work to whoever does it the cheapest. If we match the conditions they are looking for, we do the work. Anyway, we’re trying to make money here, and since we weren’t making much money that way from South Korea to begin with, it won’t have a direct impact on us no matter what they do to stop us.

We’re curious how much income individual IT workers make. And does the state take party funds from that income?

Everyone overseas pays party funds. However, the contributions differ group to group. Every CEO who manages a group submits a plan that says how much they will pay in party funds in a given year. We can say we’ll send $200,000 this year, or that we’ll send $150,000. Each worker makes a different amount of money. Those who select their jobs well and get a lot of work earn $3,000 to $5,000 a month. You can’t make that kind of money all the time, but you can when there’s lots of work.

However, some guys earn maybe about $500 when, like nowadays, the economy is bad and it’s hard to get work. Things are rough now because there’s no work.

Even if you earn a lot, if you make much more than you did the previous year, you have to pay more to the party, too. So, you have to earn more than that if you want to bring a lot of money home.

What is the toughest thing North Korean IT personnel must endure while working in China? What difficulties do they face?

The most difficult thing is that they can’t go out. They didn’t really wander around outside before, either, but because of COVID-19 over the past three years, they’ve gone out even less. They need to spend 24 hours a day together in small offices or apartments, sitting in front of their computers day and night, except for maybe three or four hours a day. Before, they sometimes went out to look around the markets, but because of COVID-19, they can’t go out anymore. It’s tough for boys in their 20s to stay cooped up and in front of their computers all the time.

Nevertheless, from the state’s position, it has no choice but to send them overseas because they make so much more than laborers. It seems [the IT workers] are putting up with it because they’ll be allowed to return to North Korea next year.

This article first appeared on Daily NK, which contacts multiple sources inside and outside North Korea to verify information. The Diplomat was not able to verify the claims independently.