Although its economy has collapsed, the North Korean state still makes money. Lots of it.. And South Korea’s government doesn’t care.

The National Intelligence Service, in a 1998 report … said North Korea forges and circulates US$100 bank notes worth $15 million a year, and that the counterfeiting is carried out by a firm called February Silver Trading in the suburbs of Pyongyang. The NIS said in reports … the same year and the next that the North operates three banknote forging agencies, and that more than $4.6 million in bogus dollar bills were uncovered in circulation on 13 occasions since 1994. “That North Korea is a dollar counterfeiting country was common knowledge among intelligence officials,” said a former senior NIS official.

Yet suddenly, when the U.S. brings up the question of North Korea’s counterfeiting activities, our government says there is insufficient evidence. That has prompted American officials to accuse our government of lying. The reason for the volte-face is that Seoul is afraid of antagonizing Pyongyang while six-party talks aimed at denuclearizing North Korea hang in the balance. But what if the shoe was on the other foot? If a country hostile to South Korea forged a huge number of our banknotes and circulated them around the world, what should our government do? And if an ostensible ally of ours defended that counterfeiting country, what would we think of that ally? …

And it’s not just the Supernotes, as Nomad points out the North Koreans have also been forging Thai baht, Chinese yuan and other regional currencies.:

One U.S. government official said in an interview, “I read an internal report produced by the U.S. intelligence agency. And you may want to think about why a Thailand diplomat was invited to the symposium on counterfeit currency hosted by the U.S. State Department on December 16.” The symposium on counterfeit currency hosted by the State department was attended by diplomats from countries participating in the six-party talks including South Korea, Japan, China, Russia, some EU member countries, Thailand and Singapore. He added, “If North Korea can forge U.S. dollars, which are known to be the most safeguarded from counterfeiting, perfectly, why wouldn’t it want to do the same for other currencies of neighboring countries.” He made clear that currencies of neighboring countries including Thailand have been counterfeited. To the question, “Does that mean that South Korean won have also been forged?” He answered, “Please, don’t ask more. You can just think about which countries North Korea might feel closer to, and which currencies it would think would be easier to circulate.”

As noted in the originally cited New Economist post, counterfeiting can be considered an act of war. AsiaPundit suggests all offended nations consider it such.

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