Central Intelligence Agency, 'Weekly Summary,' November 5, 1976

Central Intelligence Agency

Weekly Summary

Secret

CI WS 76-045

No. 0045/76

November 5, 1976

[...]

NORTH KOREA

The North Korean regime is trying to limit the damage from the recent highly publicized expulsions of its diplomats from the Nordic countries for trafficking in drugs, duty-free liquor, and cigarettes. Since the issue came to the surface in mid-October, North Korea has:

• Acknowledged privately that some of its representatives were engaged in illegal activities.

• Withdrawn ambassadors and staff members as requested without a major public protest-an implicit admission of guilt.

• Avoided any retaliatory acts against Scandinavian officials in Pyongyang.

• Moved quickly to replace the ousted diplomats.

The North Koreans are anxious to forestall any move to use the smuggling scandal as a pretext for terminating several incomplete and financially troubled industrial development projects in North Korea. The Danes and Japanese are jointly constructing a large cement plant, the Swedes are building an ore-processing facility, and the Finns have supplied equipment for a paper mill.

The illegal actions in Scandinavia were part of a systematic effort by the North Koreans to exploit their diplomatic status for profit. Similar activities-although not on the same scale-have been reported in Burma, Nepal, Malaysia, Switzerland, Egypt, and Argentina.

The illegally acquired funds are used to help defray operating expenses for North Korea's embassies and trade missions as well as to finance intelligence and propaganda activities abroad. Plagued with an acute shortage of foreign exchange, North Korea in the past year or so has been cutting back some of its larger overseas staffs in an apparent effort to reduce expenses.

So far, none of the countries in which North Korea abused its diplomatic privileges has indicated it will break diplomatic relations. The Scandinavian countries, for example, all have noted that they do not wish the expulsions to disrupt relations with Pyongyang further, and none of them has yet ordered the closure of a North Korean mission [redacted 25X1].

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