North Korea revives 'Office 38' in effort to boost Kim Jong-il's coffers

Published on Monday 14 February 2011 15:53

North Korea has revived its shadowy "Office 38", the party bureau that manages the funds of its ailing leader Kim Jong-il and his ruling elites, South Korea said yesterday, as sanctions squeeze the secretive state's finances.

Office 38 mainly oversees transactions involving foreign currency, hotels and trade, a unification ministry official told reporters in Seoul, according to Yonhap news agency.

The official said the bureau was merged in 2009 with the ruling party entity code-named "Office 39", which oversees illicit economic activity, such as drugs smuggling and arms trading, to support the government.

The offices are known as Kim's "personal safes" for raising and managing secret funds and procuring luxury goods.

Yonhap said the spin-off suggests that Pyongyang has been experiencing difficulties in earning foreign currency since merging the two offices.

North Korea is currently under UN sanctions for conducting nuclear and missile tests in 2009. It was subjected to more sanctions last year for the sinking of the South's Cheonan warship. The North denies it sank the vessel.