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Iran purchases missles from DPRK

Monday, May 1st, 2006

From Al-Jazeera (YES! My first Al Jazeera post!)

Iran bought 18 long-range missiles from North Korea, a German newspaper said, citing an inelligence report.

“Iran has bought 18 disassembled BM-25 missiles from North Korea with a range of 2,500 kilometers (1,553 miles),” Bild newspaper said, quoting a report by the foreign intelligence service BND.

The report said Iran bought the mobile missiles from Pyongyang in the form of kit sets.

The newspaper added that the missiles are based on the Russian SS-N-6 missile for submarine launch and that Iran’s President MAHMOUD AHMADINEJAD wants to have the range of the missiles “extended to 3,500 kilometers”.

Posted in Arms shipment, International trade | Comments Closed

Counterfitting of [Your Product Here] Case Continues to Build

Wednesday, April 26th, 2006

The US Secret Service, which is part of the Treasury Department, has the responsibility to track down counterfit US currency, and becuase of a quirk of history, also protects the President of the USA.

According to Yonhap, the Secret Service has collected up to $50 million of “supernotes,” first discovered sixteen years ago and believed to come from North Korea….

But the latest trend shows the communist regime depends heavily on counterfeiting cigarettes for major income, smuggling at least one 40-foot container every month into the U.S., they said.

Testifying before the Senate in the first Congressional hearing on Pyongyang’s illicit financial activities, Michael Merritt, deputy assistant director of the U.S. Secret Service, gave statistics gathered from a global investigation.

There were more than 170 arrests involving more than 130 countries since the supernote was first detected in 1989 by a Central Bank cash handler in the Philippines, he said.

“Our investigation has revealed that the supernote continues to be produced and distributed from sources operating out of North Korea,” he said.

The amount seized, he acknowledged, is low compared to other types of counterfeit currency, such as over $380 million produced in Colombia.

But the high quality of the supernotes, not the quantity circulated, is the primary concern, he stressed.

“These sophisticated counterfeits range from older series $100 notes which bear the smaller portrait, to counterfeits of more recently redesigned ‘big head’ notes, to include the latest version of the 2003 series,” said Merritt.

“These new versions show corrections or improvements in the flaws which are used by banking and law enforcement to detect them,” he said.

“A major source of income to the regime and its leadership, we believe, is the counterfeiting of cigarettes,” he said.

“From 2002 through September 2005, DPRK-sourced counterfeit Marlboro cigarettes were identified in 1,300 incidents in the United States,” he said.

“Recently filed federal indictments allege that for several years criminal gangs have arranged for one 40-foot container of DPRK-sourced counterfeit cigarettes per month to enter the United States for illicit sale over several years,” Prahar said.

The U.S. government is seeking $5 million in criminal forfeitures in several of these indictments, according to the official.

I was told on my last visit to the DPRK that Marlboro Reds were popular in the DPRK and many astute smokers could taste the difference between the American and European versions–and prefered the American product.

Posted in Counterfeiting, Illicit activities, International trade, Tobacco, USA | Comments Closed

If the Glove Doesn’t Fit…?

Wednesday, April 26th, 2006

According to Yonhap, the US State Department has reported to the US Senate (who controls its funding) that it does not have “sufficient information to designate North Korean individuals or organizations under the Kingpin Act, a legislation that denies foreign drug traffickers access to American financial institutions.”

According to the Article:

Peter Prahar, a director at the [State] [D]epartment’s bureau for international narcotics and law enforcement, told a Senate hearing that the U.S. does not yet have sufficient information to designate North Korean individuals or organizations under the Kingpin Act, a legislation that denies foreign drug traffickers access to American financial institutions.

He said indictments are unlikely at this point, since they require “a certain level of evidence that I don’t believe exists,” he said.

Asked if North Korea might be put on the major drug trafficker nation list, Prahar said it is something his department considers “on a regular basis.” But he cited inability to confirm reports of massive opium cultivation in North Korea, or find evidence that the country’s drug transiting is impacting the U.S.

“But this is something…that we consider regularly within the Department of State, and if we have information that will substantiate that finding, that is a recommendation we are going to make,” Prahar said.

Kim Seong-min, a former North Korean director, claimed it is certain that Pyongyang continues to produce opium. “Youngsters are used to collect extract from opium,” he told the hearing. As much as 70 percent of three North Korean counties are set aside to cultivate poppy seeds, totaling some 30,000 hectares, he claimed.

Prahar also stressed alarm at North Korea’s counterfeiting of pharmaceuticals which is “still sketchy” so its magnitude cannot be measured.

Posted in Counterfeiting, Drug smuggling, Illicit activities, International trade, USA | Comments Closed

Are US economic restrictions hurting the DPRK?

Friday, April 21st, 2006

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.

Posted in Bureau 39, Counterfeiting, International trade | Comments Closed

Are US Sanctions Affecting DPRK regime?

Monday, April 3rd, 2006

From Chosun Ilbo:

U.S. Treasury Department Under Secretary Stuart Levy said its ongoing financial sanctions against North Korea put “huge pressure” on the regime that could have a “snowballing … avalanche effect.

Washington identified Macao-based Banco Delta Asia as Pyongyang’s “primary money-laundering concern” last September. since then the bank has folded. According to Newsweek, “In today’s interconnected financial world, an official U.S. move to blacklist a foreign bank would be the kiss of death, since any financial institution doing business in dollars needs to hold accounts in correspondent U.S. banks in order to complete transactions.” Washington believes it has finally found a strategy that is putting real pressure on the regime — going after its sources of cash, all across the world.

Kim Jong il is reported to have told Chinese President Hu Jintao during a visit to China in January that his regime might collapse due to the U.S. crackdown on its financial transactions. [but this could be a bargaining chip to use aginast China…help us, or the US gets the peninsula].

“Numerous U.S. government agencies, including the FBI, Treasury, State Department and CIA, have been working for three years to curtail Pyongyang’s vast network of black-market activities” and “to cut off the financial conduits by which the proceeds are laundered.”

North Korea complains the sanctions imposed by the U.S. made its legitimate financial transactions impossible, and is boycotting six-party talks on its nuclear program as a result.

Posted in Counterfeiting, International trade, USA | Comments Closed

N Korean report raises Pong Su compo claim

Wednesday, March 29th, 2006

Australia Broadcasting Corporation (Reuters)
3/29/2006

North Korea hinted at seeking compensation from Australia for seizing and sinking the Pong Su, that was used to transport drugs, according to a state media report.

Last week, two Australian fighter jets bombed and sank the impounded North Korean cargo ship in what Foreign Minister Alexander Downer said was a strong message to Pyongyang about its suspected involvement in drug running.

The official KCNA news agency cited a relatively obscure pro-North Korean group as saying Australia needs to compensate North Korea.

“The Australian authorities should make an honest apology to it according to the results of the trial and compensate to the ship and its crewmen for the human, material and mental damage done to them,” KCNA reported the Federation of Koreans in the United States as saying in a commentary.

There was no official demand for compensation from North Korea but analysts have noted that since the government controls the media, it only permits approved comments to appear.

The 4,000-tonne ship the Pong Su had been impounded since 2003, when it led the Australian navy on a 1,100 kilometre chase off the south-eastern coast after being spotted unloading part of a 150 kilogram shipment of heroin at a secluded beach.

Eight crew members were charged with drug smuggling.

The captain and three officers were sent back to North Korea earlier this month after being found not guilty of aiding the drug operation. Four other men have been found guilty of drugs charges relate to the case.

The United States has said it suspects North Korea of engaging in illicit activities such as counterfeiting and drug trafficking as a way to secure funds for its anaemic economy.

Posted in Australia, Drug smuggling, Illicit activities, International trade, Sea shipping | Comments Closed

N Korean heroin ship sunk by jet

Thursday, March 23rd, 2006

BBC
3/23/2006

Video of the ship’s destruction on Youtube

A North Korean cargo ship that was used to smuggle heroin into Australia has been sunk by an Australian fighter jet.

An F-111 aircraft bombed the Pong Su during target practice on Thursday at a secret location offshore, police said.

Australian troops seized the ship in 2003 after spotting it unloading part of a huge heroin shipment at a beach.

The Australian government said the bombing was a warning to North Korea to halt its involvement in drug smuggling – an allegation Pyongyang rejects.

“It is appropriate that we publicly demonstrate our outrage at what has happened by sinking this ship,” Foreign Minister Alexander Downer said.

Captain cleared

“We are concerned about possible links between the North Korean ship and the North Korean government.”

The Pong Su’s cargo of heroin, worth about US$115 million (£66 million), would have provided four million hits of the drug on Australian streets, Mr Downer said.

Earlier this month, an Australian jury cleared the captain of the Pong Su and three officers of involvement in an international drug ring.

But four crew members who were involved in transporting the heroin from ship to shore pleaded guilty to drug charges.

Two have been sentenced to 22 and 23 years in prison and the other two are awaiting sentence.

The 3,500-tonne Pong Su was used to smuggle in more than 125 kilograms of heroin.

High-sea chase

It had anchored off the town of Lorne in Victoria state while the cargo was carried ashore by dinghy.

It was seized in April 2003 after a four-day chase by the Australian navy.

Earlier this week, the freighter was towed out of Sydney Harbour to a location 140km (90 miles) off the coast of eastern Australia, the Australian Federal Police said.

The fighter jet then dropped the bomb that sank the ship, the police added.

Although North Korea has denied any link to the smuggling operation, Mr Downer said it was hard to imagine a shipping company acting on its own in Pyongyang’s Stalinist-style economy.

“I mean this isn’t, after all, a private sector economy where private companies are doing things on their own accord,” Mr Downer said.

“North Korea has been involved in illicit drug trade, North Korea has been involved in illicit financial dealings, and North Korea has been involved in the illicit trade in WMD (weapons of mass destruction) technology over quite some years,” he added.

Australia and the United States have said the case of the Pong Su strengthens their suspicions that Pyongyang deals in drugs to help support its failing economy.

Posted in Australia, Drug smuggling, Illicit activities | Comments Closed

Looks Like the Answer is “no”

Thursday, March 23rd, 2006

North Korea does not get its drugs/ship back.

From the BBC:

A North Korean cargo ship that was used to smuggle heroin into Australia has been sunk by an Australian fighter jet.