North Korea of Kim Jong-un still owes Bangladesh’s Sonali Bank Ltd at least US$11.62 million for goods imported under a barter agreement 26 years ago.
Under the Barter 5 agreement, North Korea bought goods worth $6.14 million from Bangladesh, but it did not pay for the purchase. The entire arrears of Barter 5 were then transferred to Barter 6, which was signed on September 12, 1994, standing at $6.26 million. On March 31, 1995, the Barter 6 agreement expired without any transactions.
Since then, the Bangladeshi embassy in Beijing has approached the North Korean embassy in China several times to ask them to pay the dues, but there has been no response.
Now, state-owned Sonali Bank Ltd has sought the intervention of the Financial Institutions Division (FID) to take proper initiatives for securing the bill through the Ministry of Commerce.
Sonali Bank Managing Director and CEO Ataur Rahman Prodhan told, “This is a very old incident and I don’t properly recall the information about this at the moment.”
However, other sources from Sonali Bank and the Commerce Ministry said the first barter agreement between Bangladesh and North Korea was signed on August 12, 1977.
Under the agreement, Sonali Bank was nominated on behalf of Bangladesh and Foreign Trade Bank was nominated on behalf of North Korea for performing banking activities.
Both banks also signed an agreement to perform banking functions on behalf of their respective nations after the signing of Barter 6 in 1994. This interbank agreement included a provision of charging interest at the three months USD LIBOR rate.
In the letter sent to the FID, Ataur Rahman Prodhan wrote that in the wake of repeated pleas, the Foreign Trade Bank of North Korea had confirmed Sonali Bank’s debt of $10.04 million on June 30, 2012 through a SWIFT message.
Although the North Korean bank has repeatedly been asked to pay the dues, they are not paying at all, he added in the letter.
By 2014, the debt had increased to $11.62 million. That year, the Ministry of Commerce sent a letter to the commercial counsellor of the Bangladesh Embassy in China to take proper initiatives so that Sonali Bank could get its dues.
After that, the Bangladesh Embassy wrote a letter to the North Korean Embassy in China requesting payment of the bill but to no avail.
Sonali Bank has not been able to provide the final sum of debt it is owed by the Democratic People’s Republic of Korea.
Under the barter agreements, North Korea imported: rice, cement, jute and jute goods, urea fertilizer, tea, animal hide and skin, leather and leather goods, soap, detergent, toiletries, glycerin from Bangladesh.