More than four decades after selling 1,000 Volvos to North Korea, Sweden is still trying to get paid for the cars.
The vehicles were part of a delivered to North Korea in 1974, during a period of openness. But Pyongyang never paid anything on the deal, leaving a debt that has now accumulated with interest to $328 million, according to the Swedish Foreign Ministry.
Still going strong. One of the Volvo%27s from yr 1974 still unpaid for by DPRK. Running as taxi in Chongjin w almost half million km on odo!
North Korea owes millions elsewhere in Europe from purchases made during the early 1970s, when Pyongyang was expanding economic relations with the West.
"Volvo Car Corporation sold approximately 1,000 of our 144 sedan(s) to North Korea in 1974," said Per-Åke Fröberg of Volvo Heritage in the company's press office in Sweden, who added that he did not know what else was included in the deal. The Swedish government was also unable to say what else was included.
Fröberg said the sale of the Volvos was insured through the Swedish Export Credit Agency, or EKN. "When North Korea failed to pay for the cars, EKN stepped in, meaning that Volvo Cars did not suffer financially," he said. "The deal was closed from our point of view."
But not for EKN, which twice a year reminds North Korea of its outstanding balance.
"For the most part, we get no response," Carina Kemp, the EKN press manager, told . However, "EKN's position is that claims will be recovered."
Many of the Volvos remain in service, as shown by an October 2016 in Pyongyang describing "one of the Volvo's from yr 1974 still unpaid for by DPRK."
Sweden and North Korea have a long-standing relationship. It was the first Western European nation to establish diplomatic relations with Pyongyang; two years later, in 1975, it was the first to set up an .
At the time, North Korea was expanding economic relations with the West. "In 1972-1973, before the global oil crisis, the prices of gold, silver, lead, zinc and other export items of North Korea were rising and Pyongyang must have been confident of its payment capabilities," said Yang Moon-soo, professor of North Korean economy at the University of North Korea Studies, in the March 2012 issue of the , which is published by the Korea Development Institute, a think tank run by the South Korean government.
North Korea, after noting South Korea's economic development through introduction of Western technologies, decided "to spur development with large-scale buildup of manufacturing plants with Western equipment and financing," he said.
Of the 16 countries that owe a total of $729 billion to Sweden, North Korea's share accounts for 45 percent, according to the . Cuba, which is the next largest debtor, owes $225 billion as of December 2016 and began making payments that year, the EKN report shows.
Experts on sovereign debt told VOA there aren't many ways for nations to recover what they are owed by cash-strapped North Korea.
"No payment has been made since 1989," Katarina Byrenius Roslund, deputy director of the Swedish Foreign Ministry's press office, told VOA in an email.
"This is the largest claim that Sweden has on a single country," Roslund wrote. "Responsibility for the claim now lies with the Swedish Export Credits Guarantee Board, which sends a reminder to North Korea every six months."
Roslund said the Volvos "are no longer a common sight on Pyongyang's streets, but the odd Volvo 144 is still rolling down the country roads, often as a taxi."
Volvo's Fröberg said he did not know whether the original deal included spare parts for the cars. But because the model purchased in bulk by North Korea, the 144, "was sold all over the world, they might have had their ways to get hold of parts through various channels."
North Korea owes money elsewhere in Europe. The Swiss government reports it has claims for $241 million as of December 2016. North Korea owes Finland and private Finnish businesses more than $35 million, according to a . Pyongyang "ordered paper machines and other assorted equipment" in the 1970s, according to YLE.
Isabel Herkommer, media spokeswoman at Switzerland's State Secretariat for Economic Affairs (SECO), told VOA via email that "Swiss Export Risk Insurance (SERV) has an agreement with North Korea, which exempts the country from payment at the moment."