Inside The Soprano State

This BBC report on North Korean counterfeiting also shows an assortment of other things North Korea does illegally

North Korea denies the charges of counterfeiting and has been boycotting talks on its nuclear weapons programme in protest against the US financial squeeze.

It says it will step up the production of its nuclear “deterrent” unless the US lifts its sanctions.

High-level North Korean defectors back up some of Washington’s claims that Pyongyang is involved in counterfeiting and other illicit activities.

They say that going after the money will strike a painful blow at the leader Kim Jong-il and could weaken his grip on power.

One former North Korean diplomat painted a picture of cash-strapped embassies that are expected to finance themselves, and of diplomats wracking 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.

So is this how to get Muslims and environmentalists to support North Korean human rights? Then it talks about North Korea’s Department of Illegal Activities.

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.

Mr Kim was accompanied by two plainclothes police when we met. He has been under constant guard since his high profile defection in 1997.

“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.

Mr Kim’s own role was to proselytise North Korea’s ultra-nationalist philosophy of Juche.

He was sent to Beijing to pose as the head of a trading company, where he was also expected to raise money for Kim Jong-il.

He came up with a lucrative scheme to arrange meetings between rich South Koreans and family members in North Korea.

I’m surprised the North Koreans have not tried selling pirated DVD’s in Chinese markets. Too much competition I guess.