Crime Nets North $500 Million Per Year

The Los Angeles Times on December 12 quoted a U.S. government official as saying, “North Korea earns as much as $500 million (about 500 billion won) annually from criminal activities such as counterfeiting currency, producing knock-off pharmaceuticals, and selling illicit weapons.” However, the newspaper did not mention how it came up with the $500 million figure.

David L. Asher said that the U.S. administration has made a strategic decision to press the issue of North Korea’s producing counterfeit $100 bills, even if by doing so, it will affect the delicate six-party talks aimed at getting North Korea to give up its nuclear arms. The administration made a determination early on that irrespective of what happened in diplomacy, this economic war should not be tolerated. Asher served as the advisor for James Kelly, former Assistant Secretary of the State Department for East Asian and Pacific Affairs, and headed, until June this year, the administration’s North Korea Working Group for Criminal Activities Eradication which encompasses the State Department, the Treasury Department, and intelligence authorities.

The U.S.’ determination comes from the information that North Korea is counterfeiting more sophisticated currency in larger quantities than before and besides currency counterfeiting, North Korea smuggles weapons and knock-off pharmaceuticals into the U.S.

The U.S. authorities said that North Korea smuggled counterfeit currencies into the U.S. in connection with international criminal organizations, and by using that “channel,” North Korea is highly likely to smuggle weapons of mass destruction (WMD).

The newspaper quoted a North Korean defector, K (56), who is living in South Korea, as saying that the currency counterfeiting plants are located on hills in the outskirts of Pyongyang, and that Japanese machines, papers made in Hong Kong, and French ink were used in producing the “super notes.”

However, an official of South Korean intelligence authorities said, “K, who was quoted in the newspaper, never worked in a currency agency in North Korea, and K once admitted that what he had said to a media was not true in 2004.” The official added, “No one among the other North Korean defectors was involved in counterfeiting currency.”

Seung-Ryun Kim Myoung-Gun Lee srkim@donga.com gun43@donga.com