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| Is your US dollar printed in North Korea? |
| Cars & Trucks, Etc. : Trucks : International |
| 03/15/06 |
Dirty secrets of the Soprano state
Cameron Stewart
March 11, 2006
WHEN a Victorian Supreme Court found four North Korean seamen not guilty of heroin smuggling last Sunday, it was unlikely anyone was cheering louder than the Stalinists working in the notorious "Bureau 39" in Pyongyang.
This drab six-storey concrete edifice in the North Korean capital is the headquarters of that nation's state-sponsored crime network - a criminal operation so big that the US now dubs North Korea the "Soprano state".
From here, Communist Party officials run international crime networks peddling everything from heroin to pirated CDs to fake Viagra, raising at least $US500 million ($675 million) a year in illicit funds for dictator Kim Jong-il.
This week the faceless men of Bureau 39 scored a shock win when a Victorian jury acquitted the captain and three officers of the North Korean freighter Pong Su of aiding the importation of heroin to Australia.
The verdict means the North Korean Government has escaped blame for allegedly executing an operation that became Victoria's biggest heroin bust.
But the Australian and US Governments - privy to information that the Pong Su jurors did not hear - do not believe that the Stalinist regime is so blameless.
Australian Federal Police chief Mick Keelty suggested this week that he still believed the North Korean Government had at least some involvement in the Pong Su.
"Clearly an operation of that size doesn't get under way without some sort of ... significant support not only to get the heroin into North Korea but to get a vessel from that side of the world over to Lorne in Victoria," he said.
The Pong Su was owned by the Pong Su Shipping Company, which the court heard was controlled by the Korean Workers Party.
Shortly before its last voyage its bilge tanks were converted to huge fuel containers with the capacity to make long non-stop sea voyages and a political officer from the North Korean Government was placed among the crew.
The ship sailed from North Korea to Singapore and then along the wild shipwreck coast near Lorne in Victoria, where two crew members tried to land a shipment of heroin.
But waves overturned their rubber dinghy, drowning one man. The next day the AFP swooped, arresting four men who were later convicted. But police also arrested the four most-senior crew members of the Pong Su, including the captain and the political officer. These four were acquitted this week in a verdict that allows North Korea to claim it knew nothing about the heroin.
In the US, the court's decision will leave jaws agape.
The verdict coincides with a Bush administration report arising from a four-year investigation into North Korea's criminal activities. The US found that North Korea now runs the world's biggest state-sponsored criminal network.
"North Korea is the only government in the world today that can be identified as being actively involved in directing crime as a central part of its national economic strategy and foreign policy," says David Asher, head of the US administration's North Korea Working Group.
"In essence, North Korea has become the Soprano state - a government guided by (Korean) Workers Party leaders, whose actions, attitudes and affiliations increasingly resemble those of an organised-crime family more than a normal nation."
The US investigation found that the regime was deeply mired in state-sanctioned crime, from counterfeiting US banknotes and cigarette packages, money-laundering and drug-trafficking.
The North Korean drug trade is fuelled by large-scale poppy production which is processed into heroin and exported.
International incidents similar to the heroin-laden Pong Su are increasingly common. Smaller North Korean vessels, heavily laden with narcotics, have frequently been intercepted and sunk while trying to infiltrate Japanese territorial waters.
Japanese estimates that almost half of the country's illegal drug imports come from North Korea.
Unable to find hard currency from legitimate sources, North Korea has taken to printing its own US dollars.
Bureau 39 is said to have built several hi-tech printing and processing plants to make US dollars. In the 1990s, North Korea even invested $US10million to buy the same model printing press used by the US mint.
In 1999, the US government estimated that Pyongyang was printing at least $US15million a year in counterfeit US bills - a figure which is since believed to have increased sharply.
North Korea has enlisted the help of several financial institutions to place the fake currency into circulation.
Washington claims Pyongyang used a bank in Macau - Banco Delta Asia - "to engage in corrupt financial activities through Macau".
It says the bank agreed to place counterfeit cash into circulation.
US ambassador to South Korea Alexander Vershbow says North Korea is only the world's second state-sponsored counterfeiter after Nazi Germany.
In mid-December, the US Treasury Department issued a formal advisory concerning North Korea's illegal activities and cautioned US financial institutions to take "reasonable steps to guard against the abuses of their financial services by North Korea".
But the regime has recently spread its criminal tentacles to embrace a range of vastly different crime rackets.
Counterfeit cigarettes have become a lucrative black-market industry for North Korea, while bogus drugs including fake Viagra are a popular export.
North Korea has also used its diplomatic service as agents of state-sponsored crime.
In Romania several diplomats have been caught carrying thousands of pirated CDs, and in diplomatic circles North Koreans have long had a reputation for being involved in shady dealings.
The US findings on North Korea's criminal activities have angered the regime, which this week denied the claims. The findings have also become a major stumbling block in the renewal of the six-party nuclear-disarmament talks.
A North Korean Foreign Ministry spokesman said this week drug dealing was "strictly banned by law" because drugs "make people mentally crippled".
The spokesman said the US claims were designed only to "do harm" to North Korea and that the US was the world's biggest drug trafficker.
North Korea's involvement in crime has grown sharply over the past decade to aid its ailing economy, which went into a terminal slide after the collapse of Cold War-ally the Soviet Union.
But despite the US claims the international community has been reluctant to punish Pyongyang, fearing that it would make the rogue state more belligerent over its suspected nuclear weapons program.
Investigators have also found it difficult to prove beyond doubt the role of the North Korean Government in some criminal operations.
In the case of the Pong Su, vital evidence exploring the North Korean Government's long history of international drug smuggling was not allowed to be presented to the jury.
John Campbell, a Korean expert and former Australian diplomat, believes it is inconceivable the Pong Su's drug mission would have been carried out without the support of the North Korean Government.
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