U.S. Investigators Smash Hopes of N.Korea Compromise Unification Minister Clams Up on N.K. Counterfeiting U.S. Urges Seoul to Match N.Korea Sanctions Seoul Maneuvers Itself to the Sidelines on N. Korea Was the U.S. Trying to Force Seoul's Hand? Roh Defiant in Korea-U.S. Tension South Korea Should Heed U.S. Strategy on North U.S. in Sweeping Plan to Strangle N.Korea's Cash Flow Japanese Banks Match U.S. Sanctions on N.Korea KEB Joins U.S.-led Financial Sanctions on N.Korea Bank of China Freezes N.Korean Accounts

The National Intelligence Service, in a 1998 report titled "A New Threat in the 21st Century: Realities of and Responses to International Crimes", 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 to the National Assembly 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?

Safeguarding the safety and integrity of its banknotes is one of the most basic tasks of a country and cannot be relinquished under any circumstances. That is why the U.S. government deals with North Korea's forgery activities as a question of law enforcement and refuses to negotiate. An expert with the U.S. Congressional Research Service said North Korea's attack on the dollar is a “fatal strategic mistake.” If the U.S.’ will to condemn North Korea measured 2 on a 10-point scale five years ago, it is now at 4, he warned. If that rises to 6 or 7, North Korea would find it “unbearable."

Instead of appearing to act as a mouthpiece for North Korea and demanding “100-percent proof” from Washington, our government would be better advised to try and persuade the North just how serious the matter is.