Western law company suspends its operations in North Korea

It’s not a surprise: after a difficult period, North Korea’s first and only law firm set up by a foreigner, Hay, Kalb & Associates, will suspend operations, the firm’s principal said in a statement on Monday, as the country grows increasingly isolated.

The firm is a joint venture between the North Korean state and British-French citizen Michael Hay, who has represented foreign clients in the capital, Pyongyang, for 12 years.

Hay said he had made the decision based on “business and geopolitical principles”.

“This decision has been taken only after lengthy and thorough deliberation and an examination of the continuing deterioration of inter-regional relations pertaining to the Korean peninsula,” Hay said in a statement.

The statement is below:

It is with regret that Hay, Kalb & Associates (HK&A), announces its decision to suspend all of its activities inside the DPRK, more commonly known as North Korea. This suspension, as a practical matter, takes immediate effect as of midnight, Monday, August 1, 2016, Pyongyang Standard Time (PST). Officially, however, the suspension operates as of August 14, 2016, marking 12 years exactly since HK&A was established.

This decision has been take only after lengthy and thorough deliberation and an examination of the continuing deterioration of inter-regional relations pertaining to the Korea Peninsula. Specifically, this involved examination of developments over the 5- 6 years, notably, and various events occurring in the first several months of this year.

This decision is by no means taken lightly, as HK&A has so far maintained a positive view of the overall Korean situation, despite the numerous challenges. The decision is made on a hard assessment of both business and geopolitical principles. It is not unreasonable to assume that no meaningful change or indicator of change in relations shall occur, if at all, until well after the United States Presidential Inauguration, on January 20, 2017.

In the absence of any unexpected breakthrough – however, defined — HK&A shall therefore not resume operations until after that date. Should there be a material breakthrough, then HK&A will re-examine the situation.

HK&A does not here, and shall not make any comment on the foreign policy decisions taken by the various countries and entities directly involved in the Korean issue.

Client with cases still to be completed may contact HK&A at the separate email address provided to them when they first became clients.

Although operations are suspended, the offices of HKA is not shutting down its Pyongyang offices.

HK&A sincerely thanks all its clients, friends and contacts for their continued support and encouragement, ever since 2004.”

“It is not unreasonable to assume that no meaningful change or indicator of change in relations shall occur, if at all, until well after the United States Presidential Inauguration, on January 20, 2017,” Hay said in the statement.

North Korea has come under growing diplomatic pressure since its January nuclear test and a long-range rocket launch in February, which led to a new UN Security Council resolution in March that tightened sanctions against Pyongyang.

The majority of Hay’s clients are foreign investors, many of whom have been negatively affected by the sanctions, Hay told Reuters.

“Sanctions are hurting legitimate foreign investors. There still is no credible, consistent evidence I see of DPRK companies hurting,” Hay said. DPRK stands for Democratic People’s Republic of Korea, the North’s official title.

Very few foreigners live or work in North Korea. Those who do are usually members of the diplomatic or NGO community, although a small group of foreign investors have maintained a quiet and steady presence inside the country.

The suspension takes effect from midnight on Monday, Hay said, with an official suspension scheduled for August 14, the firm’s 12-year anniversary.

Hay, who bills his firm as the only foreign-invested firm in North Korea, said he will still maintain an office in Pyongyang.

North Korea has more than 8,000 law graduates, according to an official 2008 census, half of whom are based in Pyongyang. Most are employed by the state.

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