McClatchy Newspapers
Kevin Hall
5/22/2007
Swiss police who closely monitor the circulation of counterfeit currency have challenged the Bush administration’s assertions that North Korea is manufacturing fake American $100 bills.
President Bush has accused North Korea of making and circulating the false bills, so perfect they’re called supernotes, and in late 2005 the U.S. Treasury took measures to block that country’s access to international banking. North Korea subsequently halted negotiations over dismantling its nuclear weapons program, a process that remains in limbo because of the dispute.
The Swiss federal criminal police, in a report released Monday, expresses serious doubt that North Korea is capable of manufacturing the fake bills, which it said were superior to real ones.
The Swiss report includes color enlargements that show the differences between genuine bills and counterfeit supernotes. The supernotes are identical to U.S. banknotes except for added distinguishing marks, which can be detected only with a magnifying glass. In addition, under ultraviolet or infrared light, stripes appear or the serial numbers disappear on the supernotes.
The Bundeskriminalpolizei didn’t hazard a guess as to who’s been manufacturing the supernotes, but said experts agreed that the counterfeits weren’t the work of an individual but of a government or governmental organization.
The U.S. Secret Service, the lead federal agency in combating counterfeiters, declined to provide details or respond to the Swiss report. But spokesman Eric Zahren said the agency stood by its allegations against Pyongyang.
“Our investigation has identified definitive connections between these highly deceptive counterfeit notes and the North Koreans,” Zahren said. “Our investigation has revealed that the supernotes continue to be produced and distributed by sources operating out of North Korea.”
The Swiss report says the Secret Service has refused to provide any information about its investigations. It notes that if the United States produced concrete evidence to back up its allegations, “it would have a basis for going to war.” Under international law, counterfeiting another country’s currency is considered a cause for war.
But if the U.S. has a reason to go to war, against whom?
The Swiss police noted that before charging North Korea with counterfeiting, U.S. officials had mentioned Iran, Syria and East Germany as possible manufacturers. North Korea’s capacity for printing banknotes is extremely limited, because its banknote printing press dates from the 1970s. Its own currency is of “such poor quality that one automatically wonders whether this country would even be in a position to manufacture the high-quality `supernotes,’ ” the report says.
For years, analysts have wondered why the supernotes – which are detectable only with sophisticated, expensive technology – appear to have been produced in quantities less than it would cost to acquire the sophisticated machinery needed to make them. The paper and ink used to make U.S. currency are made through exclusive contract and aren’t available on the open marketplace. The machinery involved is highly regulated.
In theory, if North Korea were producing the notes, it could print $50 million worth of them within a few hours – as much as has been seized in nearly two decades, the report said.
“What defies logic is the limited, or even controlled, amount of `exclusive’ fakes that have appeared over the years. The organization could easily circulate tenfold that amount without raising suspicions,” says the Swiss police report, which also says Switzerland has seized 5 percent of all known supernotes.
Moreover, it noted that the manufacturer of the supernotes had issued 19 different versions, an “enormous effort” that only a criminal organization or state could undertake. The updates closely tracked the changes in U.S. currency issued by the Federal Reserve Bank.
The fact that the Swiss are questioning the veracity of the U.S. allegations against North Korea carries special weight in the insular world of banknote printing.
“The producers of the most sophisticated products used in banknote printing are Swiss or at least of Swiss origin. That goes for the (specialty) inks and that goes for the machines,” said Klaus Bender, a German foreign correspondent and the author of “Moneymakers: The Secret World of Banknote Printing.”
“Can the North Koreans do it, are they doing it? The answer is couched in diplomatic language, (but) the answer is clearly no,” Bender said.
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EXCERPT FROM THE REPORT:
“According to the US Secret Service, $50 million worth of `super-fakes’ were confiscated worldwide over the past 16 years, only a small portion of them within the United States. Measured against the US annual counterfeit damage of $200 million, the damage from $50 million worth of `super-fakes’ is not that significant. The Federal Reserve Bank produces genuine $100 dollar bills mainly for the foreign market. On their return to the U.S., the issuing bank after examination can easily distinguish the `supernotes’ from originals using banknote testing equipment, due to altered infrared characteristics. For this reason, the United States over the years has hardly suffered economic damage due to the `super dollar.’
“A (banknote) printing press like the one in North Korea can produce $50 million worth of bills in a few hours. Using its printing presses dating back to the 1970’s, North Korea is today printing its own currency in such poor quality that one automatically wonders whether this country would even be in a position to manufacture the high-quality `supernotes.’ The enormous effort put into the making of the 19 different `super-fakes’ that we know of is unusual. Only a (criminal) governmental organization can afford such an effort. What defies logic is the limited or even controlled amount of `exclusive’ fakes that have appeared over the years. The organization could easily circulate tenfold that amount without raising suspicions.”
