Sale of N. Korean money investigated, police warn such transactions could be punished

Korea Herald

09-05-2025

Bringing North Korean money or goods into country could result in jail term
South Korean police recently closed a case related to the online sale of North Korean won, noting that while this particular case went unpunished, one could be prosecuted for bringing in the currency of the hostile state.
The seller posted a 2,000 won and 5,000 won bill issued by the Pyongyang government on the second-hand marketplace platform Karrot Sunday, claiming that the bills were acquired from a trade with an actual North Korean at a Chinese airport. The bills were on sale for 15,000 South Korean won ($11).
According to the Jeju Provincial Police Agency, officers launched an investigation for potential violation of the Inter-Korean Exchange and Cooperation Act, which states that unauthorized civilian trade between residents of the two Koreas is illegal.
Investigators found that the seller had lied about buying the North Korean bills from a resident of the communist state, and had in fact received it as a gift from an acquaintance in China. It was discovered that the seller had not actually met a North Korean, and the police closed the case.
Jeju police told local media outlets that the unauthorized import of bills or products from North Korea could be subject to legal punishment depending on the severity of the situation, even if the items were bought as simple souvenirs.
Unauthorized trade of North Korean goods a grave issue here
The aforementioned law on exchange between the Koreas states that the minister of unification must sign off on any contact with North Koreans or items brought in from the communist state.
Violation of the law could result in a prison sentence of up to three years or a 30 million won fine. South Korea implements a strict no unauthorized contact rule on its citizens against the North, as the 1950-53 Korean War ended in an armistice, not a peace treaty, meaning the two sides technically remain at war.
The Seoul government does not recognize Pyongyang as an official state. Its Constitution states that the territory of the Republic of Korea, the official name for South Korea, consists of the entire Korean Peninsula and attached islands. This means that according to South Korean law, residents and territory currently under rule of the North Korean government are under the South's authority, even though de-facto state-level exchange between the Koreas has occurred in past administrations.
As such, most of what would be considered diplomatic dealings related to the North were primarily handled by the Unification Ministry during more amicable periods on the peninsula, with the Ministry of National defense handling military matters.
North Korea is also under a series of economic sanctions from the international community due to its pursuit of ballistic missile and nuclear test programs, and its official trade with the rest of the world remains minimal. However, the US dollar is thought to be widely used in the country, due to the unstable monetary status of North Korea's finances and currency.
The North Korean government set the official exchange rate between its currency and the US dollar at 105.9 won to the dollar as of 2021, according to the Ministry of Unification. Pyongyang had implemented a ratio of around 2.2 won to the dollar prior to 2003, but overhauled this in 2003 for a more realistic reflection of the two currencies.
The actual market value of the North Korean won is far less; it is among the world's poorest countries and its currency is vulnerable to extreme levels of inflation. The South Korean government estimates that the actual North Korean won-to-dollar ratio has fluctuated between 8,000 won to 4,000 won 2012 and 2021, and has been hovering above 8,000 won since September of 2022.