Are US economic restrictions hurting the DPRK?

From the BBC:

A recent report for the US Congress estimated that $45m of the notes are in circulation worldwide. South Korean police this month uncovered a haul of 700 fake $100 bills. “They’re about 95% identical to the real thing,” said Suh Tae-suk, South Korea’s leading expert on counterfeit currency, “but there’s a slight difference in the texture of the paper and the make-up of the chemicals, so experts can still spot them.”

Most of the notes are brought in from China; and organised crime networks are reported to be distributing them in Asia, and through Russia into Europe. American officials say they have no doubt the notes are manufactured in North Korea.   High-level North Korean defectors back up some of Washington’s claims that Pyongyang is involved in counterfeiting and other illicit activities.

One former North Korean diplomat painted a picture of cash-strapped embassies that are expected to finance themselves, and of diplomats racking their brains for new ways to raise money. He asked not to be identified because he had left family behind in Pyongyang, who he now considers hostages of the regime. “We were each given a quota of foreign currency that we had to raise each year to show our loyalty to the state,” he explained. “I was expected to produce $100,000 a year and remit it to a bank in China”.

The former diplomat, who has lived in Seoul since his defection, said a superior once handed him fake US bank notes, mixed in with the real thing, to conduct a trade deal in South East Asia. He said he raised money from kick-backs on trade deals, but would also smuggle gold and “currency by the kilogramme” in diplomatic bags.

And there were other scams: Trading in tax-free cars, smuggling liquor into Islamic countries, and trafficking horns and ivory out of Africa to sell to Chinese businessmen.

At the centre of much of the trade is North Korea’s top-secret Bureau 39, which defectors say was set up in the 1970s to create a personal slush fund for Kim Jong-il.

“Bureau 39 has a monopoly on earning foreign currency,” said Kim Dok-hong, who worked for 17 years alongside the bureau’s agents at the North Korean Workers’ Party Central Committee.   “Bureau 39 has a monopoly of trade in high-quality agricultural products like pine mushrooms and red ginseng. They also control the drug trade. Opium is produced across the country and then refined into heroin. Their other main role was distributing the supernotes,” he said.

North Korea denies the charges of counterfeiting.  It accuses the US of counterfitting its own currency and trying to blame the DPRK. 

North Korea has also asked the government of Switzerland to investigate the authenticity of a U.S. claim that Pyongyang secretly keeps US$4 billion in Swiss bank accounts, and then release a report on its findings.

The North Korean embassy in Switzerland sent a statement to Yonhap News Agency, branding the U.S. allegation a “conventional scheme to damage the image of our republic.”
North Korea has “made an official request to the Swiss government to investigate this matter and release the results of the probe on purpose to guarantee objectivity,” the statement said.


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