No Consensus on Counterfeiting Charges

South Korea, North Korea and the U.S. are responding differently to allegations of North Korean counterfeiting.

U.S. Ambassador to Korea Alexander Vershbow said he had credible evidence that North Korea’s national institutions were involved in issuing counterfeit notes in an interview on the SBS program “Han Su-jin’s Sunday Click,” which will be broadcast on December 25. This statement, following the remark by U.S. Assistant Secretary of State Christopher Hill on December 20 that he personally saw counterfeited “supernotes” (hundred dollar bills), has increased the pressure on North Korea,

North Korea argues that the counterfeiting allegations are an invention of the U.S., however. On the other hand, South Korea is taking a precautious attitude, saying that if the allegation is true, it is a serious crime, but that there is no strong evidence that will tell the truth.

The U.S. is approaching the counterfeiting issue as a matter of national security. It argues that counterfeiting and circulating U.S. dollars, the key currency of the world, is a crime that disrupts the international economic order and stability of the U.S. and, thus, cannot be politically negotiated.

Some argue that the U.S. is raising the counterfeiting issue and threatening economic sanctions on North Korea to resolve the North Korean nuclear issue by raising pressure on North Korea. They argue that the U.S. responded to the North Korean request for a light water reactor, which came just after the fourth round of six-party talks last September, with the issue of counterfeit notes, which can win the consensus of the international community.

The fact that hardliners in the U.S. administration are having a stronger say recently seems to be related to America’s response.

North Korea is denying the counterfeiting allegations because, unlike the nuclear issue that involves subtle and complicated international dynamics, the issue of counterfeit notes is destined to put North Korea under international pressure. Some analysts believe that counterfeited money is one of the North Korean regime’s main sources of financing, along with narcotics and smuggling.

The major concern of the South Korean government is that this issue might trigger an endless truth game between the U.S. and North Korea, which may have a negative impact on the six-party talks. That is why the South Korean government is demanding that the U.S. have clearer evidence on counterfeit notes while being careful not to provoke or sanction North Korea without solid evidence.

Jong-Koo Yoon jkmas@donga.com