The DPRK Court handed down a decision recently allowing a limited amount of compensation for the Chinese investors who have sustained heavy losses in their investments in North Korean development projects.

Many Chinese businessmen have invested significant amounts of money in 5 special economic zones and 21 development projects following the business briefing sessions held in Rukyung Hotel in April 2016. Since then, these projects suffered a lot of damage due to natural disasters, border lockdowns during the COVID pandemic, international sanction policy, and other reasons. Some of the investors filed protests and sought legal remedies. However, insurance companies and the court dismissed their protests citing that the government could not be held responsible for losses incurred by natural disasters. Consequently, foreign investors disappeared from the scene, jeopardizing the development effort altogether.

According to Mr. Chang, a Chinese businessman involved in the Wonsan-Galma project, a seaside tourist area, DPRK is re-opening the talks with the Chinese businessmen who requested compensation and expressed investment withdrawal.

Freedom Chosun’s source in Pyongyang relayed that the court sided with the Chinese businessmen and foreign investors who sued the construction firms and insurance companies for damages resulting from the massive storm in 2018. The court awarded a portion of the compensation sought by the Chinese investors.

Mr. Chang said he received $34,000 from BukGeukSung insurance company. He invested $5.4 million in a tourist hotel entity in the Wonsan-Galma tourist complex in 2016 in exchange for his right to operate a hotel for 20 years.

According to the source, DPRK authorities appear to be trying to win back Chinese investors by compensating them for the damages, though partially.

Jang Se-yul

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