Egypt’s Orascom Telecom Media and Technology (OTMT) Holding S.A. has not received an exemption from the United Nations 1718 Committee to continue operating its joint venture (J/V) Koryolink cellphone network in North Korea, informed sources have told NK News.
OTMT maintains a 75% stake in the network and therefore needs an exemption from the 1718 Committee to avoid violating United Nations Security Council (UNSCR) Resolution 2375, which since January 10 requires all companies to cease J/V operations in North Korea.
But while an OTMT exemption request has apparently been filed with the 1718 Committee by Egypt – the country where the firm’s headquarters are located – no approval has been issued and the situation remains unresolved, informed sources told NK News.
Furthermore, NK News understands that the U.S. mission to the UN put a hold on the request at the 1718 Committee until mid-June, after which there is still no certainty of approval for the Egyptian company.
As the foreign majority backer of North Korea’s only cellphone network – used not only by local citizens but also aid agencies, diplomats and UN country staff – the lack of an exemption could put OTMT in a precarious legal position.
OTMT’s head office in Cairo has been unresponsive to over 20 media requests from NK News for clarity on the issue since January, failing to provide any comment on whether current operations are authorized by the 1718 Committee.
December last year saw company spokesperson Noha Fanous tell NK News: “OTMT has not stopped its telecom operation in DPRK as it started prior to any sanctions and is a utility providing vital service to the people and does not fall under UN sanctions.”
At the time Fanous also said that OTMT would not be “undertaking any new investments in the Democratic People’s Republic of Korea (DPRK).”
However, simply commencing operations prior to UNSC 2375 emerged is alone insufficient to get around measures now requiring all companies to cease J/V operations in North Korea.
“This is a joint venture, and those are banned under UNSCR 2375, paragraph 18,” said Joshua Stanton, a North Korea sanctions expert and author of the One Free Korea blog, also highlighting prior sanctions issues surrounding the firm.
“Don’t forget that Orascom set up a second joint venture, Orabank, in partnership with a sanctioned North Korean bank, the Foreign Trade Bank, no less,” he continued.
“Banking joint ventures were banned even before that, in UNSCR 2270, paragraph 33, and restricted in UNSCR 2094, paragraph 12.”
Egypt’s foreign ministry did not reply to a request on Friday for comment on the issue.
The Netherlands mission to the United Nations – currently presiding over the 1718 Committee – would not confirm any details surrounding the case.
“As far as what this means for Orascom, even assuming that the North Koreans let them repatriate their $585M in trapped revenues at a reasonable exchange rate – which seems less likely than ever now that reports are starting to hint at liquidity problems for the regime – good luck finding a bank willing to clear those payments,” Stanton added.
OTMT has reported major problems with repatriating profits due to issues in calculating exchange rates to move money out of North Korea.
Other companies have sought creative approaches to responding to UNSC 2375.
The World Health Organization-certified PyongSu Pharma joint venture (J/V), for example, employed “drastic measures” to keep operating in North Korea after UNSC 2375 came into effect this year, Managing Director Remy Lardinois told NK News in January.
“Pyongyang Pharmaceutical Factory, our partner, agreed to hold onto NDCP shares until the sanctions are lifted or until PyongSu gets an exemption,” Lardinois explained.
But it is unclear what other companies have done to continue operating in North Korea legally.
Koryolink staff includes four Egyptians working inside North Korea alongside two also based there from OTMT, a November 2017 directory of expats working in Pyongyang seen by NK News showed.
Koryolink has grown steadily in popularity since its launch in 2008 and was earlier in the year reported to have over three million subscribers, just over 10% of the DPRK population.
Tia Han contributed reporting
Edited by Oliver Hotham
Featured image: NK News
Join the influential community of members who rely on NK News original news and in-depth reporting.
Subscribe to read the remaining 680 words of this article.