North Korea's efforts to earn hard currency have suffered a setback not only due to U.N.

sanctions but also from the financial crisis of Chongryon, a group of pro-Pyongyang residents in Japan, a Washington Post column said Sunday.

As a result, the status and influence of Chongryon, or the General Association of Korean residents in Japan, has markedly decreased in the communist nation, said Max Fisher, the Post's foreign affairs blogger.

"The hermit kingdom has a number of ways to bring in cold, hard cash, but one of its previously most reliable has hit another setback in what appears to be its permanent decline," he said.

Since its founding in the 1950s, Chongryon has focused on three major tasks -- promoting pro-North Korean ideology among Koreans in Japan, raising funds from them for Pyongyang, and running businesses to generate cash for the communist country, Fisher said.

Chongryon reportedly used to send between US$600 million and $1 billion to North Korea each year, most of it for the ruling Kim family. It once claimed around 250,000 members and had its own banking system, wielding huge political clout in North Korea.

Chongryon, which was a "very effective sanctions-busting enterprise," went bust itself last year, going formally broke, Fisher noted.

Chongryon is accused of having prospered in the past on a number of illicit activities like cash-smuggling, bribery, tax evasion and unlicensed gambling businesses.

But the group has come under close public scrutiny amid the unresolved issue of North Korea's abduction of Japanese nationals in the 1970s and the 1980s and Pyongyang's continued nuclear and missile activities.

"This week, in a sign of Chongryon's waning importance to North Korea, the regime in Pyongyang has downgraded it within the all-important halls of power," Fisher said.

He cited a report by Japan's Asahi Shimbun newspaper that Chongryon, previously under the control of a powerful body "Room No. 225," is now overseen by the United Front Department of the Workers' Party.

Room No. 225 is known as a North Korean government organ tasked with handling clandestine money-gathering operations abroad, while the United Front Department deals with inter-Korean relations and Koreans living overseas.

"That might sound like simple bureaucratic shuffling, but it's a big deal in North Korean politics, an indication that Chongryon is no longer the Pyongyang power player and lifeline it once was," Fisher said. (Yonhap News)