From fake Viagra to contraband cigarettes and heroin, and from mock US postage stamps to crisp counterfeit US dollar bills, North Korea is allegedly milking millions of dollars from the US through state-sponsored smuggling.
And the US says it wants to stop this -- perhaps even at the expense of North Korea holding on to its nuclear weapons.
The US has imposed financial sanctions on Pyongyang over alleged counterfeiting and money laundering activities, causing North Korea to boycott crucial multilateral talks aimed at disbanding its atomic weapons.
no compromise
Washington estimates that Kim Jong-il's regime pockets up to US$1 billion a year from counterfeiting of US greenbacks, trafficking illicit narcotics, smuggling contraband smokes and even peddling knockoff Viagra.
US President George W. Bush said on Thursday that the US would not compromise its bid to end North Korea's alleged counterfeiting activities in order to seek a resolution to Pyongyang's nuclear weapons drive.
"It is economic warfare," said Peter Brookes, a former Pentagon official who has done extensive studies on the Stalinist regime's alleged smuggling activities.
"It is the first government known to produce `Monopoly money' since the Nazis, and is the world's premier counterfeiter of US currency," he charged.
The North Korean fake US$100 bill, he said, was known as the "supernote" due to its quality, which far surpassed the paper that came out of the Latin American and Eastern European crime syndicates.
North Korea rejects counterfeiting charges. Its foreign ministry said last week US evidence to justify financial sanctions on North Korea was "baseless" fiction.
The US State Department said it was prepared to brief North Korean officials on the evidence it had accumulated on Pyongyang's "illicit" activities, but that Pyong-yang refused to take up the offer.
The Wall Street Journal, in a report today, quoted tobacco companies as saying that North Korea had the capacity to churn out more than two billion packs of fake cigarettes a year.
"Supplying counterfeit cigarettes has also cemented North Korea's ties to global organized-crime groups, giving the country access to a vast smuggling network that could allow it to covertly move almost anything -- from forged US banknotes to weapons -- in or out of the isolated state, US officials told the newspaper.
Over the past several years, the report said, Philip Morris USA discovered North Korean-made knockoffs of its Marlboro brand in more than 1,300 places, from New York to Oklahoma City, Fort Worth, Seattle and Los Angeles.
It was a recent jump in the inflow of fakes from North Korea to the US that triggered alarm bells in Washington, said Brookes, whose latest book, A Devil's Triangle: Terrorism, WMD and Rogue States, dwells partly on the "illicit" activities of North Korea.
Previously, he said, much of North Korea's contraband went to neighboring nations, such as Japan and South Korea.
diplomats involved
A US government sting operation last summer uncovered the extent of Pyongyang's reach into the US' contraband market, Brookes said.
Pyongyang used state trading firms, embassy diplomatic pouches and commercial cargo to run these "crime-for-profit" schemes, he said.
At least 50 drug seizures in over 20 countries since 1990 have involved North Korean diplomats and trade officials, says a study by the research arm of the US Congress.
The US Treasury in September labelled a Macau-based bank, Banco Delta Asia, a "primary money-laundering concern" and blacklisted eight North Korean companies in connection with the bank that it said were involved in spreading weapons of mass destruction.
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