Room 39

Central Committee Bureau of the Korean Workers’ Party

Room 39 (officially Central Committee Bureau 39 of the Korean Workers’ Party, also referred to as Bureau 39, Division 39, or Office 39) is a secretive North Korean party organization that seeks ways to maintain the foreign currency slush fund for the country’s leaders, initially Kim Il-sung, then, in progression, Kim Jong-il and Kim Jong-un.

The organization is estimated to bring in between $500 million and $1 billion per year or more[4] and may be involved in illegal activities, such as counterfeiting $100 bills (see Superdollar), producing controlled substances (including the synthesis of methamphetamine and the conversion of morphine-containing opium into pure opiates like heroin), and international insurance fraud.

Although the seclusion of the North Korean state makes it difficult to evaluate this kind of information, many claim that Room 39 is critical to Kim Jong-un’s continued power, enabling him to buy political support and help fund North Korea’s nuclear weapons program.

Room 39 is believed to be located inside a ruling Workers’ Party building in Pyongyang, not far from one of the North Korean leader’s residences.

Room 39 was established by Kim Il-sung in the late 1970s. It has been described as the lynchpin of the North’s so-called “court economy” centered on the dynastic Kim family. The origin of Room 39’s name remains unknown.

In early 2010, South Korea’s Yonhap news agency reported that Kim Dong-un, head of the department, was replaced by his deputy, Jon Il-chun.

The Chosun Ilbo reported that Room 38, led by Kim Jong-il, was merged into Room 39 in late 2009, though the two were split again in 2010 due to difficulties in obtaining foreign currency.


 

Purpose & Activities

Room 39 is also involved in the management of foreign currency earnings from foreigners’ hotels in Pyongyang, gold and zinc mining, and agricultural and fisheries exports. Companies believed to be controlled by Room 39 include Zokwang Trading and Taesong Bank.

A 2007 report published by the Millennium Project of the World Federation of United Nations Associations said North Korea makes an estimated $500 million to $1 billion annually from criminal enterprises.

In 2009, a Washington Post report outlined a global insurance fraud scheme by the North Korean government. The state-owned Korea National Insurance Corp (KNIC) sought reinsurance contracts with international reinsurers and then submitted fraudulent claims; the contracts were governed by North Korean law and legal challenges were fruitless.

Room 39 is also believed to be operating the overseas North Korean restaurant chain called Pyongyang.

In 2015, the European Union placed the KNIC under sanctions and added that the KNIC had links to Office 39.  The KNIC (which had offices in Hamburg, Germany and London, UK) was reported to have had assets of UK£ 787 million in 2014 and had been involved in scamming insurance markets and making investments in property and foreign exchange. Thae Yong-ho a North Korean diplomat who defected in 2016 said that North Korea earned each year “tens of millions of dollars” with insurance fraud.

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