North Korea’s only independent and international law-firm, Hay, Kalb & Associates, is to suspend operations with effect from midnight Monday, a press release seen by the Reuters news agency said.

The firm, which has been operating in Pyongyang since 2004 and is managed by Scottish national Michael Hay, will close amid tightening sanctions and international pressure following North Korea’s fourth nuclear test in January.

“This decision has been taken only after lengthy and thorough deliberation and an examination of the continuing deterioration of inter-regional relations pertaining to the Korean peninsula,” Hay said in a statement seen by Reuters.

“It is not unreasonable to assume that no meaningful change or indicator of change in relations shall occur, if at all, until well after the US presidential inauguration, on January 20, 2017,” the statement continued.

The suspension of the law firm marks the closure of one the few remaining foreign businesses in North Korea, leaving just eight other entities in Pyongyang according to a 2015 telephone directory seen by NK News.

“North Korea is a difficult place to do business because of both domestic and international pressures,” said Andray Abrahamian, an Honorary Fellow at Macquarie University.

“Sanctions may well be hurting business this year, reducing the number of companies who need an English and French speaking lawyer based in Pyongyang,” he added.

Hay told Reuters that “sanctions are hurting legitimate foreign investors,” echoing a position he shared in an interview with NK Pro late last year. “There still is no credible, consistent evidence I see of DPRK companies hurting,” he added.

And though sanctions are not intended to prevent day-to-day economic exchange with the DPRK, the side-effects of increasing scrutiny on North Korea have meant a culture has emerged in which it’s simply safer for companies to stay well away of the country.

“Even if their activities will not be in violation of sanctions, there is … a very great hesitancy on the part of many corporations (to look at the DPRK),” Hay told NK Pro during an interview last year.

“I think that anyone who claims that there is a huge rush into the DPRK at the moment is somehow misplaced in his or her assessment of what’s going on on the ground,” Hay added.

And as a result of recent tensions, Hay said there had been a notable reduction in interest, with a “substantial drop” in “certain countries” approaching him for business in the last three years.

Despite the suspension, Hay told Reuters he would maintain his office in Pyongyang. The office is located within the Pyongyang Hotel, close to North Korea’s central bank.

Main picture: NK News