Overview of the Legal Structure of Foreign Investment in the DPRK

Abstract

Since 1984 North Korea has been undergoing a relatively brisk legal overhaul. However, changes made thus far have not been adequate enough to erase the distrust foreign investors still feel toward the DPRK on account of the leaderships past behavior. Though it is difficult to say that the North has turned itself around, it is obvious that the North is well aware of its need to do so. Steps seen so far show a leadership that is willing to change yet overly concerned with losing power. This and the unique relationship the DPRK has with its neighbors have resulted in a series of patchwork legal structures that often overlap, contradict, or fail to adequately cover matters of concern. On the other hand, if one

takes into account the late stage at which the DPRK embraced foreign investment, then this is a relatively new concept for Pyongyang, and the pace at which it has expanded its legal structures to meet the needs and demands of foreign enterprises and individual investors is commendable. Looking at the improvements in North Korea, from Rajin-Sonbong to Kaesong, Mt. Kumgang and Sinuiju, one can see that Pyongyang has learned from its failures and is willing, at least on a small scale, to relinquish some legal authority over economic matters in order to provide an internationally competitive investment atmosphere. There are still many risks associated with investment in North Korea, some of which could be alleviated by more legislation or the revision or abolition of other legislation. There are several areas of investment in which it is unnecessarily vague which set of laws takes precedence, or under what circumstances this could change. Continued cooperation and increasing investment will bring these items more to the forefront where it will fall on the collective shoulders of the DPRKs Supreme Peoples Assembly to continue to improve the legal framework that

provides an environment conducive to foreign investment.