Counterfeit dollars in NKorea

June 4, 2009

, North Korea June 4 – North Korea continued producing high-quality counterfeit US dollar bills known as "supernotes" even after Washington lifted financial sanctions in 2007, a South Korean newspaper said.

Dong-A Ilbo quoted a source in Washington as saying that a joint probe by Seoul and Washington has been under way since the fake 100 dollar bills surfaced in South Korea\’s southern port city of Busan last November.

The two countries "have been keeping tabs on the case as it is likely to have considerable fallout on US-North Korea and inter-Korean ties," the source was quoted as saying by the conservative daily.

"When the UN Security Council wraps up discussions on imposing sanctions, the North is likely to be hit by tough financial sanctions," the source said.

The five permanent Council members plus Japan and South Korea are negotiating a resolution that could impose new sanctions on the North for its May 25 nuclear test.
Police in Busan confirmed they had arrested four people for smuggling in 9,904 fake 100 dollar bills and had asked Interpol for help to locate their leader, who is believed to live in China.

Agents from the US Secret Service have sought cooperation from South Korean police to track an international ring that circulated the "supernotes," a detective in the city told AFP by phone.

"We don\’t know where the counterfeit money was manufactured or who made it," the detective said on condition of anonymity.

Dong-A quoted a diplomatic source as saying the case showed the communist North kept producing counterfeit dollars despite the lifting of US financial sanctions in 2007.

The US Treasury in September 2005 blacklisted a Macau bank for allegedly helping North Korea to launder money, freezing Pyongyang\’s accounts there.

The accounts were unblocked in 2007 as part of efforts to push ahead with a nuclear disarmament pact.

The daily said South Korean and US intelligence authorities met in Seoul Wednesday to discuss ways to strengthen surveillance and prevent materials for supernote production from entering North Korea.

The National Intelligence Service declined to comment. Yonhap news agency quoted a diplomatic source in Washington as saying that the United States is seeking to tighten the screws on the North over the counterfeiting.

A US delegation that has been touring East Asia to discuss a response to the nuclear test will raise the counterfeiting issue when it visits China Friday, the agency said.

Headed by US Deputy Secretary of State James Steinberg, the team includes Treasury Undersecretary Stuart Levey, who led the action against the Macau bank.


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