The Ashikaga Bank, a remittance window in Japan to North Korea headquartered in Utsunomiya, Tochiki Prefecture announced on March 27 it will suspend remittances to Pyongyang beginning mid-April, as a means of rationalizing its management.
The Ashikaga Bank has remitted money to North Korea under business arrangements with its North Korean counterparts - Joint (North) Korea Bank and (North) Korea Trade Bank.
With the suspicion running high in recent months that Chosen (Korea) Trust, a financial institution affiliated with the pro-Pyongyang General Association of (North) Korean Residents in Japan, better known as Chosensoren, has remitted money to North Korea, Ashikaga Bank has been criticized as being a Chosensoren patron. Since they received remittances from the Japanese bank in 2000, North Korean authorities have extended preferences to the remittance route of the Ashikaga Bank by, for instance, paying the recipient of a yen remittance in full in the Japanese currency. This practice sharply contrasts with their issuance of currency to recipients of remittances made from Canada and the United States, which had high handling charges.
Once Ashikaga Bank's remittance window to North Korea is closed, Korean residents in Japan having families in the North and Pyongyang's business partners in Japan are expected to remit money through couriers using the Mangyong-ho ferry plying between Chongjin, North Korea, and Nigata, Japan. The sentiment that "receiving money through a courier is more convenient because secrecy can be maintained" is said to be gaining force among prospective recipients of remittances from Japan.
The forthcoming suspension of remittances to North Korea by the bank will deal Pyongyang a practical blow as well as a symbolic loss in that it will lose one of its major Japanese patrons, observed Seoul officials. "Because the Chosen Trust is a feeble financial institution disqualified to engage in the overseas credit business, North Korea needs backup from a general bank like Ashikaga to conduct normal remittance business with Japan," commented a Ministry of Economy and Finance official.
Ashikaga launched financial business with North Korea in 1974, when the North defaulted on large quantities of facilities it imported from European countries and Japan. With Pyongyang-Tokyo trade virtually stopped, Chosensoren resumed this. Perhaps influenced by the popular theory that Takauchi Ashikaga, an early 14th-century tribal lord of Japan, came from Korea, the Ashikaga region is said to have been vaguely friendly toward the Korean Peninsula. It is also pointed out that the Ashikaga Bank played its role out of the pragmatic gain of monopolizing remittance commissions in Japan.
Under a sweeping financial restructuring drive, Japan has recently put into effect the payoff system capping the protection of depositors at Y10 million yen. Ashikaga Bank has also been taking a number of steps to improve its financial status. In 1994 the bank was pressured by the United States into suspending dollar remittances to North Korea. The bank also appears to have found it difficult to extricate itself from the recently aggravated public opinion toward Pyongyang as a result of North Korea's abduction of a number of Japanese citizens.
(Kim Mi-young, miyoung@chosun.com)
