U.S. Accuses N. Korea in Counterfeit Dollar Scheme The Bush administration on Wednesday accused North Korea of a wide variety of criminal activities, including drug trafficking and counterfeiting U.S. currency. Alex Chadwick discusses the counterfeiting scheme with Bruce Klingner, a North Korea analyst for the Washington, D.C.-based consulting firm The Eurasia Group.

U.S. Accuses N. Korea in Counterfeit Dollar Scheme

U.S. Accuses N. Korea in Counterfeit Dollar Scheme

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The Bush administration on Wednesday accused North Korea of a wide variety of criminal activities, including drug trafficking and counterfeiting U.S. currency. Alex Chadwick discusses the counterfeiting scheme with Bruce Klingner, a North Korea analyst for the Washington, D.C.-based consulting firm The Eurasia Group.

ALEX CHADWICK, host:

From NPR NEWS, it's DAY TO DAY. In Seoul today, South Korean officials are meeting with U.S. diplomats about charges that North Korea is helping support itself through crime, counterfeiting and drug smuggling and such. The Bush administration says, North Korea prints fake hundred dollar bills, a lot of them, and Japanese Yen, and produces heroin and other drugs. Bruce Klingner is a political risk analyst who watches North Korea for a D.C. consulting firm, The Eurasia Group. He joins us from our Washington studios. Mr. Klingner, what is the evidence of counterfeiting by North Korea, and how big a deal could this be, really?

Mr. BRUCE KLINGNER (The Eurasia Group): Well, the evidence is pretty extensive, and actually, North Korean involvement in crime has been an open secret, actually, for decades. They've had over twenty of their diplomats arrested for involvement in either counterfeiting, money laundering, or drug smuggling.

CHADWICK: And how important would this be to the North Koreans? I mean, this is actually a government policy on the part of North Korea to try to support itself through criminal activity?

Mr. KLINGNER: Yes, it does appear to be so. The, first of all, North Korea is such a controlled society, that activities of this magnitude would be unlikely to occur without the government's knowledge, and a number of defectors from North Korea have said that the military, or the Korea Workers Party, or Kim Jong-Il himself is not only aware of this, but is running this operation.

CHADWICK: How much money are you talking about? What are, there are Treasury officials, U.S. Treasury officials who are saying this, how much money do they think the North Korean's are printing?

Mr. KLINGNER: Well, the estimates are that for currency it could run North Korea about a half a billion dollars a year, and a similar amount from drug smuggling. And this is for a country that, its total trade with South Korea on an annual basis, is about a billion dollars, and the same figures approximately for China. So, collectively, criminal activity is a large money making operation for the regime.

CHADWICK: How good are the counterfeit bills that the North Korean's are producing?

Mr. KLINGNER: U.S. officials have said they are of exceptional quality to the degree that they can even fool banks. That the banks even would require specialized equipment to determine that the bills are counterfeit.

CHADWICK: Does the government believe other governments are involved? Other nations involved, as well?

Mr. KLINGNER: I think the, for the North Korean angle it's the North Korean government and then they are operating in conjunction with organized crime units in China, Japan, and Ireland, even.

CHADWICK: You know, as one who doesn't closely follow, not closely enough, I guess, news from North Korea, this just sound completely wacky, you know. I mean doesn't it strike you that way?

Mr. KLINGNER: Well, North Korea has been referred to by the new U.S. Ambassador to South Korea as a criminal regime. Others have called it the Sopranos state, after the cable TV show. And it does seem striking that we have a government that sanctions and abets criminal activity to the degree that North Korea does. And that is the Bush administration's point, and they're not only imposing the sanctions, but in their hesitancy to even negotiate with North Korea, when they point to not only its violations of the 1994 agreed framework, which covered the nuclear weapons program, but also this criminal activity.

CHADWICK: Bruce Klingner, an Asia analyst for The Eurasia Group, a Washington based consulting firm. Bruce, thank you for coming in.

Mr. KLINGNER: My pleasure. Thank you very much.

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