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NORTH KOREA NEWSLETTER NO. 96 (March 4, 2010)
*** TOPIC OF THE WEEK (Part 2)

N. Korea Seems to Have Ceased State-sponsored Drug Trafficking

WASHINGTON (Yonhap) -- North Korea appears to have stopped state-sponsored drug trafficking, but still continues to counterfeit brand cigarettes and remains a large source of phony U.S. currency, the U.S. State Department said on March 1.

   "There is insufficient evidence to say with certainty that state-sponsored trafficking by the Democratic People's Republic of Korea (North Korea) has stopped entirely in 2009," the 2010 International Narcotics Control Strategy Report released by the department said.

   "Nonetheless, the paucity of public reports of drug trafficking with a direct DPRK connection suggest strongly that such high-profile drug trafficking has either ceased, or has been reduced very sharply."

   The annual report said, "No confirmed instances of large-scale drug trafficking involving the DPRK state or its nationals were reported in 2009," noting, "This is the seventh consecutive year that here were no known instances of large-scale methamphetamine or heroin trafficking to either Japan or Taiwan with direct DPRK state institution involvement."

   Numerous instances of narcotics trafficking involving North Koreans, North Korean vessels and military patrol boats have been recorded in Taiwan and Japan over the past decades until 2003, according to the report.

   The report noted that trafficking of methamphetamine along the North Korea-China border continues.

   "There are indications that international drug traffickers can purchase methamphetamine in kilogram quantities in some of the major towns on the Chinese side of the DPRK-China border," it said.

   North Korea, meanwhile, continues counterfeit cigarette and U.S. bills called supernotes, the report said.

   "Press, industry and law enforcement reports of DPRK links to large-scale counterfeit cigarette trafficking in the North Korean Export Processing Zone at Rajin continue," it said. "It is unclear the extent to which DPRK authorities are complicit in this illegal activity, although it is likely that they are aware of it, given the relatively high-profile media reports."

   The report cites examples of supernotes caught across the world in the previous years.

   "Counterfeit $100 U.S. notes called supernotes continue to turn up in various countries, including in the United States," it said. "There are reports, for example, of supernote seizures in San Fransisco and a very large supernote seizure in Busan, South Korea, during 2008 and 2009."

   Supernotes are uniquely associated with North Korea, the report said. "But it is not clear if recent seizures are notes which have been circulating for some time, or they are recently-counterfeited new notes."

   North Korea was not included in the report's "Money Laundering and Financial Crimes" list due to "the absence of a significant financial industry," David Johnson, assistant secretary of state for international narcotics and law enforcement affairs, told reporters while explaining the 2010 narcotics report.

   Turning to South Korea, the report said that South Korea has served as the location for transshipment of narcotics abroad due to its status as a country relatively free of drug abuse problems.

   "Narcotics production or abuse is not a major problem in the Republic of Korea (South Korea)," it said. "Reports continue to indicate, however, that an undetermined quantity of narcotics is smuggled through South Korea en route to the United States and other countries."

   South Korea has become a transshipment location for drug traffickers "due to the country's reputation for not having a drug abuse problem," it said.

   "This, combined with the fact the South Korean port of Busan is one of the region's largest ports, makes South Korea an attractive location for illegal transshipment coming from countries that are more likely to attract a contraband inspection upon arrival in the United States," the report said. "Several large-scale diversions of dual-use precursor chemicals destined for Afghanistan were traced back to South Korea."

  (END)