North Korea's Kim Dynasty Reshuffles Its Secret Treasury Keepers

North Korea is a peculiar nation that divides its economy into three separate tracks. The people's economy under Cabinet jurisdiction handles the civilian sector, the military economy serves as the armed forces' funding base, and the party economy functions as the Workers' Party's financial pipeline—each operating independently.

The core mission of the party economy system is securing and managing ruling funds for the Kim dynasty, from Kim Il-sung to Kim Jong-un. To this end, the Party Secretariat's "Office 89" (formerly the 5th Economic Management Department of Kumsusan) and "Office 38" and "Office 39" under the Party Central Committee have served as successive treasury keepers. An even more secretive private vault function is reportedly performed by "Bureau 36" under the State Affairs Commission.

Office 39, the foreign currency-earning organization, was established in 1974 under orders from Kim Jong-il, father of current leader Kim Jong-un. The directorship has been held successively by Choe Bong-man, Kim Dong-un, Jon Il-chun, and Sin Ryong-man. Office 39 controls some 120 enterprises including Daesong General Bureau and Kumsung Bank, maintaining a facade of legitimate business operations. Its actual revenue sources are illicit activities: drug and weapons smuggling, counterfeit dollar production and distribution, insurance fraud, and financial institution hacking. It generates at least several trillion won worth of dollars annually. Since Office 39 also operates gold and silver mines within North Korea, its total managed assets could exceed tens of trillions of won.

Office 38, which procures the Kim family's private funds, was established in the 1980s within the Party Light Industry Department under Kim Il-sung's orders. After taking power in 1994, Kim Jong-il installed his close associate Rim Sang-jong, a former deputy director of Office 39, as head of Office 38 in 1996. Following Rim's death in 2007, Office 38 was merged into Office 39 during 2008-2009. It was later revived in May 2010 in response to international sanctions against North Korea, then reintegrated into Office 39 around 2014.

Sin Ryong-man, who has headed Office 39 since 2018, was recently replaced. Han Sang-man, a newly appointed candidate member of the Party Central Committee, is mentioned as a potential successor. The reasons behind the dismissal remain unclear. Kim Jong-un may have replaced the treasury keeper as part of generational succession to secure slush funds needed to establish his daughter Ju-ae as heir apparent.

The money earned by Office 39 and related entities is a primary funding source for nuclear and missile development. Even if the South Korean government pursues conciliatory policies toward the North, it must strengthen international cooperation to cut off the Kim family's slush fund pipeline. Only then can we block North Korea's nuclear buildup that threatens South Korea and the United States.