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N.K.'s counterfeit U.S. bills still showing up: Treasury

All Headlines 01:13 April 02, 2008

WASHINGTON, April 1 (Yonhap) -- North Korea's counterfeit American dollars continue to surface, and the U.S. Secret Service has an ongoing investigation into the case, the U.S. Treasury Undersecretary Stuart Levey said Tuesday.

Testifying before the Senate Finance Committee, Levey said the Treasury is working closely with the Secret Service on the matter to counteract North Korea.

"The Secret Service is continuing to investigate North Korea's counterfeiting activities and the high-quality counterfeit bills produced by North Korea, known as the 'supernote,' continue to surface," he said.

The U.S. believes the North is engaged in an extensive counterfeiting business, including American brand cigarettes and pharmaceuticals, as well as currency.

The bogus $100 bills are called "supernotes" because of their close resemblance to the real notes.

Pyongyang's suspected illicit financial transactions, including circulation of bogus American bills, led to the Treasury's punitive actions against Banco Delta Asia (BDA), a small Macanese bank, in September 2005. Financial institutions all over the world were warned of the bank's shady business dealings with the North, starting a run of clients and other banks that severed ties with the BDA.

Levey, who heads the office of terrorism and financial intelligence, said the Macanese bank knowingly allowed its North Korean clients to use the bank to facilitate illicit conduct.

The sanctions idled the six-party talks, a forum aimed at denuclearizing the Korean Peninsula, for over a year as Pyongyang protested and demanded the return of some US$25 million of its money frozen at the BDA as a result of the Treasury's actions. The entire sum was later returned to the North.

Levey said the private sector's reaction to the BDA case was "dramatic."

"Since the information pointed to the North Korean regime's involvement in the illicit conduct, many of the world's private financial institutions terminated their business relationships not only with designated entities, but also with North Korean clients altogether," the undersecretary said.

"Banks in China, Japan, Vietnam, Mongolia, Singapore and across Europe decided that the risks associated with this business far outweighed any benefit."

The Treasury's actions proved valuable in both securing the integrity of the international financial system "and in providing the State Department with leverage in its diplomacy with North Korea," Levey said.


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