Hana Electronics JVC was a 50/50 joint venture between Phoenix Commercial Ventures Ltd and the trading department of The Ministry of Culture.

Phoenix has no further connection with Hana or any interests (direct or indirect) in its operations.

Sinji JVC was a 50/50 joint venture between Phoenix Commercial Ventures Ltd and the Taegyong Economic Group.

Phoenix’s share in the company was sold to a third party in November 2010.

Sinji (pronounced “shinjee”) was a lieutenant of Tangun, the first king of Korea in around 3,000 BC, and his mission was to relay communications between the king and his people. In the absence of a written script, he invented one. Sinji dates from ancient history, all Koreans will recognise the name. Sinji symbolises the human intellectual, and he can be considered to be the original Korean IT developer.

Sinji’s main areas of operations at the time of disposal were:
• Retail (consumer electronics, household necessities)
• Software (eg the innovative web based e-learning platform, learnwithelsi)
• Artificial flower manufacturing for export
• SKD assembly/retail: Renewable energy products (eg small capacity wind turbine generators)

Phoenix Commercial Ventures Ltd will issue further updates as to the intended future operations and direction of the newly acquired Sinji brand.

Pyongyang/London, January 8th 2013

Phoenix Commercial Ventures Ltd is proud to announce that Ken Frost MA FCA FIPFM, a director of Phoenix and member of the Institute of Chartered Accountants in England & Wales (ICAEW), has been ranked 25th within the Financial Power List 2013: Big Hitters.

The Financial Power List 2013 has been compiled by the British magazine “Accountancy Age”. The list identifies the “Big Hitters”, the top fifty people who the magazine thinks will be the biggest players in accounting and finance during 2013.

Ken ranks with such names as:

– George Osborne (Chancellor of the Exchequer)
– Michel Barnier (commissioner responsible for internal market and services, European Commission)
– Mike Carney (Governor of The Bank of England)
– Paul Beswick (chief accountant, US Securities and Exchange Commission)

Ken is based in the UK and is a chartered accountant with over 25 years’ international experience of FMCG industries, consumer electronics, rough diamond distribution and the internet.

He has worked for; KPMG, Philips Electronics, De Beers and in addition to being on the board of Phoenix and Hana Electronics JVC he runs his own internet company.

The Board of Phoenix Commercial Ventures Ltd would like to congratulate Ken on this notable achievement.

Every year PQ Magazine (a UK based accountancy magazine) holds an annual awards ceremony, rewarding the best and the greatest in the accountancy world.

The foreign-appointed directors on the Board of Daedong Credit Bank have resigned with immediate effect, and have no further interests (financial or fiduciary) in the company.

Outgoing CEO of Daedong Credit Bank, Nigel Cowie noted:

“I am now heavily involved with a second joint venture company in the DPRK, Hana Electronics JVC. Established in 2003, this company has enjoyed solid commercial success and has recently opened its new headquarters building, together with the expansion of its business lines.

The success of both ventures has been such as to necessitate a decision to focus on one or the other, and a commercial decision had to be made.

The bank is continuing to enjoy the commercial success it has seen for the past 16 years, but ironically the decision has been made easier by the general sanctions-laden environment in which financial business here is framed these days.

As to the possibility of ever re-entering the bank, any decision we make will be based purely on commercial considerations.”

Both Hana Electronics and Phoenix Commercial Ventures bank with DCB, and will continue to do so.

About Daedong Credit Bank

Daedong Credit Bank is a joint venture retail bank based in Pyongyang. It was established in 1995 as “Peregrine Daesong Development Bank”. The Bank underwent a change of name and foreign ownership in 2000.

The wealth of experience garnered over Daedong Credit Bank’s 16 years of successful operation is unrivalled.

Daedong Credit Bank was the first, by fifteen years, foreign majority held bank in the DPRK. DCB is proud to be regarded as a flagship successful joint venture in the DPRK, and a key part of the infrastructure needed to assist the foreign-invested joint ventures, which contribute to the country’s economic development.

The bank’s principal function is to offer normal “high street” banking facilities in hard currency to foreign companies, joint ventures, international relief agencies and individuals doing legitimate business in the DPRK.

Daedong Credit Bank was the first bank in the DPRK to introduce, and vigorously implement, a comprehensive set of anti-money laundering procedures. DCB’s anti-money laundering procedure manual was introduced eight years ago, and subsequently updated based on anti-money laundering guidelines provided by the Asian Development Bank. The manual has been sent to, and accepted by, DCB’s international correspondent banks.

Daedong Credit Bank also maintains strict procedures for the detection and rejection of counterfeit bank notes; it uses regularly updated note checking machines, and has personnel with over 15 years of experience of handling notes.

Daedong Credit Bank is strongly positioned in relation to the future economic development of the DPRK, and, being the oldest established foreign invested commercial bank in the DPRK, it is the intention of the bank to capitalise on these advantages.

CanKor is proud of the intellectual stimulus provided by its growing Brain Trust of North Korea experts who contribute a wide variety of viewpoints, perspectives, information, resources, links and papers of their own to expand CanKor’s scope and calibre.

Based in London, UK, Ken is a chartered accountant with over twenty years international experience of FMCG industries, consumer electronics, rough diamond distribution and the Internet. He has worked at KPMG, Philips Electronics, De Beers and runs his own Internet company. He is also on the board of Daedong Credit Bank, a member of Gerson Lehrman Group Councils and an Advisor with Guidepoint Global. In January 2011 Accountancy Age placed him on their Financial Power List for 2011. This list identifies the top 50 who will wield the most influence over the future direction of accounting Ken comments:

“As a business, we leave politics to the politicians. However, I would like to say I have always admired CanKor’s openness in giving voice to opinions reasonably expressed from all points of view.

We run a number of businesses, which are governed by strict compliance procedures and a published code of conduct. Our businesses employ an increasingly large number of local people in manufacturing, the service industry and the financial services sector. Indeed Hana Electronics JVC employs 230 people, as such it recognises and takes its responsibilities as an employer very seriously.

Business enterprises such as ours provide a much needed bridge for better communication and understanding between the international community and the DPRK. Foreign investment conducted according to internationally accepted best practices of good governance has a positive impact on relations between the DPRK and international community, and augurs well for the peaceful development of the Korean Peninsula.”

The Boards of Phoenix Commercial Ventures Ltd and Daedong Credit Bank would like to congratulate Ken on his appointment.

Pyongyang/London, July 8th 2011

Phoenix Commercial Ventures Ltd (www.pcvltd.com) is proud to announce that Hana Electronics JVC (a 50/50 joint venture based in the DPRK) completed and moved into its new headquarters based near the T’ongil Market in Pyongyang in Q1 2011.

Having moved in and set up its production facilities, Hana has now opened a restaurant (“The Restaurant at Hana”) and related leisure facilities (swimming pool, sauna, hairdresser, bar, gym etc) in its headquarters.

 
The restaurant (which comprises a main dining room and several private ones) and leisure facilities are open to locals and foreigners alike. The menu comprises mainly Korean dishes, together with a few Western ones. Food for the restaurant is sourced from local markets.

A video and photos of the restaurant can be viewed on the Phoenix website.

About Phoenix Commercial Ventures Ltd

Phoenix Commercial Ventures Ltd offers investors business and investment opportunities in the Democratic People’s Republic of Korea (DPRK), enabling them to take advantage of the economic reforms that are taking place there.

Phoenix Commercial Ventures Ltd maintains an office in Pyongyang, almost the only European company to do so, and operates with the following specific aims:

• Identify commercially viable investment projects in the DPRK, on a case by case basis

• Identify reliable local partners for all forms of business in the DPRK, either trade or investment

• Seek overseas investment sources for such projects

• Minimise the risk in such projects, by taking responsibility for supervision of the local set-up procedures and management of the projects

About Hana

Hana was established in May 2003. In 2004 it began manufacturing and selling DVD and VCD players, as well as pressing and selling CD’s.

When the company first began operations it employed barely a handful of people. Now it employs over 200 people, and has thus become a major employer with significant social responsibilities which it takes very seriously.

Hana have established a nationwide distribution network throughout the major cities in the DPRK. Whilst they manufactured and marketed CD’s, they had an exclusive long term contract with the Mansudae Arts Centre, which belongs to the Ministry of Culture, one of the partners in the JV, for 300 works including; movies, karaoke and other music.

They now produce and sell a range of DVD players, and will move into other consumer electronics products.

Hana is now ranked as one of the top three best performing joint ventures in DPRK, as assessed by the Ministry of Finance.

Hana is proud to have introduced a number of firsts, which show the evolution of the DPRK to a market economy. These include:

• Advertising – the Hana logo, together with the company’s telephone number, appear on every product and packing case

• Offering a guarantee – Hana has also introduced a six-month, no questions asked, guarantee on all products

• Distribution System – Hana have gradually established, from a zero base, a distribution system covering the whole country. They have set up sales offices – for example, in Chongjin, they now have one main office and 13 sub-branches; in Hamhung, they have one main office and 3 sub-offices, and also have offices in Nampo, Sariwon and Sinuiju. They plan to open more outlets, first in the other provincial cities, then in the smaller county seats

• Hana intends to diversify and expand their range of products.

• Hana moved into its newly constructed building, next to the T’ongil Market, in Q1 2011.

• Hana has also opened a restaurant (“The Restaurant at Hana”) and leisure facilities (including a swimming pool) in its new building. The restaurant and leisure facilities are open to locals and foreigners alike.

CONTACT INFORMATION:

Phoenix Commercial Ventures Ltd office address in Pyongyang is:

Phoenix Commercial Ventures Limited
No. 901
International House of Culture
Ryonhwa-dong
Central District
Pyongyang
Democratic People’s Republic of Korea

Corporate Website www.pcvltd.com

North Korea Government Agencies’ and Front Companies’ Involvement in Illicit Financial Activities

Daedong Credit Bank would like to take this opportunity to strongly emphasise the following:

• Its role is to provide banking facilities for non Korean nationals (such as businesses and aid and relief agencies) working with the DPRK.

• All transactions are subject to rigorous checks and procedures.

• Daedong Credit Bank has in place rigorous anti money laundering procedures. These procedures have been disseminated to every member of the bank’s staff via the procedures manual; the procedures are followed, and audited as being followed, for all transactions. Copies of the procedures can be obtained by contacting the bank.

• Daedong Credit Bank does not support in any way the financing of illegal activities.

Daedong Credit Bank has a special position as the oldest foreign-invested JV bank in the DPRK, and provides banking services to all the major foreign-invested JVs; it therefore stands on its solid reputation, and part of this is being the leader in the adoption of internationally accepted best practices in every field.

In this regard, and as one of the most creditworthy banks in the DPRK, it is especially important that Daedong Credit Bank is completely open with correspondents and regulators.

Daedong Credit Bank is concerned that the dissemination of news stories based on innuendo and rumour, appear to be deliberately designed to damage the reputation of the Daedong Credit Bank and its clients. Daedong Credit Bank, whilst not being able to comment of financial transactions not under its control, would like to emphasise the following:

• Daedong Credit bank has, on occasions, detected and impounded the so-called “superdollar” fake notes. The fact that DCB were able to detect fake notes undermines the story perpetrated by the media, and some other organisations, that the notes are undetectable.

• DCB is a not a state-owned institution.

• DCB is incorporated in the DPRK as a majority foreign-owned and managed institution, under the DPRK’s laws on independent foreign-invested joint ventures

• DCB provides banking services for non-state-owned customers carrying out legitimate business.

• DCB has strict anti money laundering procedures in place, details of which can be viewed on the Daedong Credit Bank website (www.daedongcreditbank.com)

• Daedong Credit Bank is happy to provide detailed background information as to the rationale for legitimate financial transactions, in respect of the DPRK, being heavily reliant on the use of cash.

The Daedong Credit Bank looks forward to playing a significant part in facilitating normal commercial relationships between the DPRK and the international business community.

About Daedong Credit Bank

Daedong Credit Bank is a joint venture retail bank based in Pyongyang. It was established in 1995 as “Peregrine Daesong Development Bank”. The Bank underwent a change of name and foreign ownership in 2000.

Daedong Credit Bank is the first, by thirteen years, foreign majority held bank in the DPRK. DCB considers itself a flagship successful joint venture in the DPRK, and a key part of the infrastructure needed to assist the foreign-invested ventures, which drive the country’s economic reforms.

The bank’s principal function is to offer normal “high street” banking facilities in hard currency to; foreign companies, joint ventures, international relief agencies and individuals doing legitimate business in the DPRK.

Daedong Credit Bank was the first bank in the DPRK to introduce, and vigorously implement, a comprehensive set of anti-money laundering procedures. DCB’s anti-money laundering procedure manual was introduced three years ago, and subsequently updated based on anti-money laundering guidelines provided by the Asian Development Bank.  The manual has been sent to, and accepted by, DCB’s international correspondent banks.

Daedong Credit Bank also maintains strict procedures for the detection and rejection of counterfeit bank notes; it uses regularly updated note checking machines, and has personnel with over 13 years’ of experience of handling notes. DCB have encountered and impounded the so-called ‘superdollar’ notes, proving that these notes (despite media misconceptions) are not undetectable.

The wealth of experience garnered over Daedong Credit Bank’s 10 years of successful operation is unrivalled.

CONTACT INFORMATION:

Daedong Credit Bank
401, Potonggang Hotel
Ansan-dong
Pyongchon District
Pyongyang
Democratic People’s Republic of Korea

The displays included machine tools, electronics, vehicles, medicines, petrochemical products, consumer goods and foodstuffs.

Representatives from Phoenix Commercial Ventures attended the fair and manned a stand representing member companies of the European Business Association in Pyongyang, together with members of the management team from Sinji JVC and Hana Electronics JVC (joint venture companies formed with Phoenix) and Daedong Credit Bank – Phoenix’s banking partner in the DPRK – (since 2000 Daedong Credit Bank has been 70% owned and managed by a company run by professional fund managers. The remaining 30% is held by Korea Daesong Bank).

Nigel Cowie (who is CEO of Phoenix, General Manager and CEO of Daedong Credit Bank and Vice President of the European Business Association) said:

“The trade fair provides an ideal venue and opportunity for companies to showcase their products and services, as well as providing an excellent networking opportunity. Phoenix Commercial Ventures and Daedong Credit Bank are proud to have participated in this regular event, which provides a springboard for economic development and growth.

Although the fair provides the opportunity for participants to establish new contacts for trade relationships, we also wanted to emphasise investment opportunities. Something that is often overlooked is that it is perfectly possible to create and run successful joint ventures in the DPRK. We have shown this with Daedong Credit Bank, which has been operating successfully for 13 years, and with Hana Electronics, which has been doing the same for five years, and are in the process of repeating the process with Sinji JVC, our youngest joint venture.”

Nigel Cowie (CEO Phoenix) attending the trade fair lunch at the German Embassy Pyongyang hosted by Dr Thomas Schaefer, German Ambassador (left of centre of picture), also seated Kim Il Ryong, Vice Chairman, Korea Committee for the Promotion of International Trade (KCPIT), O Il Hun, Vice President, KCPIT International Exhibition Corporation, Ryu Jong On, President, KCPIT Jonlam Trading Corporation, Professor Eckhard Rohkamm, President, German Asia-Pacific Business Association, Jon Yong Guk, Director, Korea International Exhibition Corporation
 

For additional information, contact Phoenix Commercial Ventures Ltd.

About Phoenix Commercial Ventures Ltd

Phoenix Commercial Ventures Ltd offers investors business and investment opportunities in the Democratic People’s Republic of Korea (DPRK), enabling them to take advantage of the economic reforms that are taking place there.

Phoenix Commercial Ventures Ltd maintains an office in Pyongyang, almost the only European company to do so, and operates with the following specific aims:

● Identify commercially viable investment projects in the DPRK, on a case by case basis

● Identify reliable local partners for all forms of business in the DPRK, either trade or investment

● Seek overseas investment sources for such projects

● Minimise the risk in such projects, by taking responsibility for supervision of the local set-up procedures and management of the projects

CONTACT INFORMATION:

Phoenix Commercial Ventures Ltd office address in Pyongyang is:

Phoenix Commercial Ventures Limited
No. 901
International House of Culture
Ryonhwa-dong
Central District
Pyongyang
Democratic People’s Republic of Korea

On the 21st of February 2006, DCB’s designated couriers transported a cash deposit to Mongolia. This consisted of USD1 million and JPY20 million; the couriers were met, as previously agreed, by Golomt Bank officials together with local police at Ulaanbaatar International Airport. The couriers were then detained by Mongolian intelligence agents who took them, and the cash, to the Bank of Mongolia (central bank); the couriers were accused of importing counterfeit currency.

DCB’s couriers were detained outside the Bank of Mongolia overnight, whilst the Mongolian intelligence agents claimed to be checking the authenticity of the cash. The next day the Mongolian intelligence agents alleged that approximately USD70,000 was suspected to be counterfeit; the alleged fakes were sent, together with two additional notes randomly taken from each remaining USD10,000 bundle of cash, for further examination at an unspecified location.

On the 22^nd of February the Mongolian press carried false reports, based on a leak, that “North Korean diplomats had been intercepted smuggling USD1 million and JPY200 million (not JPY20 million) into Mongolia”. These reports were subsequently carried by international news agencies.

DCB dispatched its Treasurer, and subsequently General Manager (Nigel Cowie – who is also a director of Phoenix Commercial Ventures Ltd www.pcvltd.com), to Mongolia to protest this action and demand the return of its funds.

On the 6^th of March, after holding the cash for 13 days claiming they were still checking it, Mongolian intelligence officials in a meeting with DCB representatives finally conceded that all the notes were genuine; the cash was released. The money was deposited with the Golomt Bank of Mongolia on the 10^th of March, as had originally been intended.

Daedong Credit Bank is concerned that the seizure of the funds, and the subsequent leaking of false information and innuendo to the media, damaged the reputation of both Daedong Credit Bank and the Golomt Bank of Mongolia; Daedong Credit Bank wishes to ensure that the false and misleading reports over this incident are corrected without delay.

Daedong Credit Bank would also note that that the designated couriers carry diplomatic passports, as arranged separately by the Democratic People’s Republic of Korea (DPRK) authorities, as an added security measure. Any other inference drawn from this is false and misleading.

Daedong Credit Bank also emphasises that, having been checked by the Mongolian authorities, the notes were proven to be genuine. The funds were the proceeds of legitimate business activities by DCB’s known foreign customers, and DCB followed all the laws and procedures required by Mongolian authorities for such cash deposits.

Daedong Credit Bank is concerned that such incidents, and the dissemination of news stories based on innuendo and rumour, appear to be deliberately designed to damage the reputation of the Daedong Credit Bank and its clients. Daedong Credit Bank, whilst not being able to comment of financial transactions not under its control, would like to emphasise the following:

• Daedong Credit bank has, on occasions, detected and impounded the so-called “superdollar” fake notes. The fact that DCB were able to detect fake notes undermines the story perpetrated by the media, and some other organisations, that the notes are undetectable

• DCB is a not a state-owned institution

• DCB is incorporated in the DPRK as a majority foreign-owned and managed institution, under the DPRK’s laws on independent foreign-invested joint ventures

• DCB provides banking services for non-state-owned customers carrying out legitimate business

• DCB has strict anti money laundering procedures in place, details of which can be viewed on the Daedong Credit Bank section of the Phoenix Commercial Ventures website (www.pcvltd.com)

Daedong Credit Bank is happy to provide detailed background information as to the rationale for legitimate financial transactions, in respect of the DPRK, being heavily reliant on the use of cash.

Daedong Credit Bank is also happy to give its views on the freezing of its balances with Banco Delta Asia.

The Daedong Credit Bank looks forward to playing a significant part in facilitating normal commercial relationships between the DPRK and the international business community.

About Daedong Credit Bank

Daedong Credit Bank is a joint venture retail bank based in Pyongyang. It was established in 1995 as “Peregrine Daesong Development Bank”. The Bank underwent a change of name and foreign ownership in 2000. DCB anticipates an important announcement, in the first half of 2006, concerning it ownership; once that has been finalised it will proudly celebrate its tenth anniversary.

Daedong Credit Bank is the first, by ten years, foreign majority held bank in the DPRK. DCB considers itself a flagship successful joint venture in the DPRK, and a key part of the infrastructure needed to assist the foreign-invested ventures, which drive the country’s economic reforms.

The bank’s principal function is to offer normal “high street” banking facilities in hard currency to; foreign companies, joint ventures, international relief agencies and individuals doing legitimate business in the DPRK.

Daedong Credit Bank was the first bank in the DPRK to introduce, and vigorously implement, a comprehensive set of anti-money laundering procedures. DCB’s anti-money laundering procedure manual was introduced three years ago, and subsequently updated based on anti-money laundering guidelines provided by the Asian Development Bank.  The manual has been sent to, and accepted by, DCB’s international correspondent banks.

Daedong Credit Bank also maintains strict procedures for the detection and rejection of counterfeit bank notes; it uses regularly updated note checking machines, and has personnel with over 10 years’ of experience of handling notes. DCB have encountered and impounded the so-called ‘superdollar’ notes, proving that these notes (despite media misconceptions) are not undetectable.

The wealth of experience garnered over Daedong Credit Bank’s 10 years of successful operation is unrivalled.

Subsequent to the designation by the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) division of the Banco Delta Asia SARL Macau (one of DCB’s main correspondent banks) as being a “primary money laundering concern”, DCB opened new accounts with other correspondent banks, including the Golomt Bank of Mongolia.

A copy of DCB’s anti-money laundering procedure manual was provided to Golomt Bank of Mongolia, together with other documentation, relating to logistics and security procedures for handling cash. These matters, together with customs clearance declarations, were discussed at length and agreed with them.

Daedong Credit Bank has a significantly strong position in relation to the future economic development of the DPRK and, being the oldest established foreign invested commercial bank in the DPRK, it is the intention of the bank to capitalise on these advantages.

CONTACT INFORMATION:

Daedong Credit Bank
401, Potonggang Hotel
Ansan-dong
Pyongchon District
Pyongyang
Democratic People’s Republic of Korea