North Korea Warns Of Nuclear War

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North Korea Warns of Nuclear War

http://news.yahoo.com/s/ap/20060128/ap_on_re_as/nkorea_us_1

Sat Jan 28, 11:06 AM ET

SEOUL, South Korea - North Korea warned of nuclear war Saturday and vowed to strengthen its deterrent forces as it demanded that Washington show evidence backing its allegation that the communist regime is counterfeiting U.S. money.

"Dark clouds of a nuclear war are hanging low over the Korean Peninsula," the North's official Rodong Sinmun newspaper said in a commentary carried by state-run Korean Central News Agency.

"The ever-more frantic moves of the U.S. to ignite a new war against (North Korea) would only compel it ... to bolster its deterrent for self-defense in every way."

The North repeatedly has accused the United States of planning to attack. Washington has denied any such intention.

The North's comments Saturday follow a South Korea-U.S. agreement this month giving American troops more flexibility in the South.

The North said the pact was aimed at preparing for war.

Also Saturday, the North dismissed U.S. accusations of counterfeiting and other illicit activities like drug trafficking.

"The nature and mission of (North Korea) do not allow such things as bad treatment of the people, counterfeiting and drug trafficking to happen in it," KCNA said.

A pro-North Korean newspaper in Japan also urged Washington to prove its allegation that North Korea is counterfeiting U.S. currency.

"If there is suspicion and clear evidence as claimed by the United States, (the U.S.) can present it and prove (it)," the Choson Sinbo newspaper said.

The United States "continues to leak plausible information but the reality is that there is nothing to confirm the fact objectively," it said.

The newspaper sometimes acts as an unofficial mouthpiece for the reclusive, communist North.

North Korea has recently stepped up criticism of the United States for imposing sanctions over its alleged illicit activities.

In September, Washington slapped restrictions on a bank in the Chinese territory of Macau, saying it had helped the North distribute counterfeit money and engage in smuggling.

A month later, Washington imposed sanctions on eight North Korean companies it said were fronts for proliferating weapons of mass destruction.

The North has refused to return to international talks on its nuclear weapons program until Washington lifts the sanctions.

The United States has dismissed the threat, saying the sanctions are unrelated to the nuclear issue.

On Friday, South Korean Foreign Minister Ban Ki-moon said there were indications that the six-country negotiations over the North's nuclear programs could resume in February.

The last session of the talks — involving the two Koreas, the United States, Japan, China and Russia — was held in November.

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"The nature and mission of (North Korea) do not allow such things as bad treatment of the people, counterfeiting and drug trafficking to happen in it"

That's propaganda on the part of the North Korean Government, but the U.S. has essentially been called out.

[Gold9472]

North Korean Counterfeiting Complicates Nuclear Crisis

http://www.nytimes.com/2006/01/29/international/asia/29korea.html?ex=1296190800&en=92409fb5ba506343&ei=5088&partner=rssnyt&emc=rss

By MARTIN FACKLER
Published: January 29, 2006

SEOUL, South Korea, Jan. 26 — It has all the makings of a James Bond movie: an isolated authoritarian regime running a secret counterfeiting network with tentacles reaching into foreign banks, the Irish Republican Army and Chinese underworld gangs dealing in narcotics and antiaircraft missiles.

This is the picture of North Korea that former American officials and analysts say Washington has pieced together in recent years as it has investigated the appearance around the world of bogus $100 bills so perfect that they have been called "supernotes."

Using government printing presses to run off another country's currency, possibly in an effort to destabilize that currency, would appear to be the sort of criminal act that demands tough international penalties. But Washington's effort to press its case has become mired in the tricky politics of an even larger and more serious problem: nuclear proliferation.

[Late in the week, the North Korean government vehemently denied any hand in counterfeiting and vowed to resist pressure from the United States over the matter. In one commentary carried by the state-run Korean Central News Agency on Saturday, The Associated Press reported, Pyongyang declared that it does "not allow such things as bad treatment of the people, counterfeiting and drug trafficking." North Korea also warned, The A.P. said, that a new military pact between Seoul and Washington meant that "dark clouds of a nuclear war are hanging low over the Korean Peninsula."]

South Korea, an important United States ally in the region, apparently fears that pushing the counterfeiting issue could derail efforts to persuade North Korea to give up its nuclear ambitions.

"The counterfeiting issue has become just a card in the bigger game of getting North Korea to disarm," said Kim Sung Han, a researcher at the Institute of Foreign Affairs and National Security, a government policy research group.

That is why when a delegation from the Treasury Department arrived here this week to ask for South Korea's cooperation to stop the counterfeiting, the Americans got a chilly — and slightly puzzling — response.

South Korea, a longtime partner of Washington against North Korea, went to lengths to distance itself from the American accusations, even to the point of denying that the United States had sought its support.

On Tuesday, the United States Embassy issued a bland statement saying that Treasury officials had "urged" South Korea to take unspecified steps against counterfeiting. On Wednesday, a spokesman for the South Korean Foreign Ministry, Choo Kyu Ho, said the embassy had "exaggerated" the content of the discussions.

The Treasury delegation "did not urge us either officially or unofficially to take measures," Mr. Choo said in a statement.

The issue escalated further when South Korean President Roh Moo Hyun warned Washington in a nationally televised news conference that taking too tough a stance against North Korea could cause "friction and disagreement between South Korea and the United States."

On Thursday in Washington, President Bush vowed to press North Korea to stop counterfeiting.

"If someone is cheating on us, we need to stop them," Mr. Bush said. The United States says it has found $45 million in supernotes, which it says North Korea has used to prop up its decrepit economy and keep its leaders in luxury.

In part, the rift between the allies reflects a widening gap in their strategies for dealing with North Korea. While Washington favors a harder line, Seoul hopes a gentler approach may one day lead to a reunification of the two Koreas, specialists say.

South Korea also seems to share concerns that the counterfeiting issue is threatening six-nation talks aimed at peacefully ending North Korea's nuclear weapons program. In November, North Korea's envoy walked out of the negotiations after the United States imposed penalties on Banco Delta Asia, a bank in the former Portuguese colony of Macau that it says North Korean diplomats used to launder briefcases full of bogus dollars.

American officials have tried to separate counterfeiting from nuclear talks. On Wednesday, Daniel Glaser, a deputy assistant Treasury secretary and the leader of the United States delegation, told reporters that Washington does not regard the counterfeiting issue "to be in any way related to the six-party talks," the Associated Press reported.

China, which independently confirmed the counterfeiting allegations, has emphasized to North Korea that the issue should not be seized upon as a pretext for avoiding the talks, which Beijing would like to see resume by mid-February.

South Korea and other nations have deeper concerns that hard-liners in the Bush administration may be using the issue to drive a tougher bargain with North Korea, or to derail the talks.

In particular, many wonder why the United States has chosen to raise the counterfeiting issue now, after remaining virtually silent for more than a decade. American officials first suspected North Korea in the late 1980's, when supernotes started appearing in East Asia and the Middle East. But Washington did not take action until the penalties against Banco Delta Asia in September.

Critics point out that the penalties, which outraged North Korea, were imposed suspiciously close to an apparent breakthrough in the six-party nuclear talks on Sept. 19, when North Korea agreed to abandon its nuclear program in exchange for aid and security guarantees.

"The timing could have been poor coordination" between law enforcement officials and negotiators, said Peter Beck, director of Northeast Asia at the International Crisis Group, a nongovernment organization that researches security issues. "Or it could have been sabotage by those who still want regime change."

David L. Asher, a former State Department official who oversaw the investigation into North Korean counterfeiting, offered a different explanation. He said the Bush administration ordered the inquiry soon after taking power in 2001, and it took 150 federal officials four years of sleuthing to assemble the evidence, much of which has not been made public.

"The timing is just a coincidence," said Mr. Asher, who was coordinator of the department's North Korea working group until last year. "The administration wanted us to prove this. They didn't want this to end up like Iraqi W.M.D.s," referring to the so-called weapons of mass destruction that the Bush administration never found in Iraq.

In particular, Mr. Asher said, the administration waited until September to give the Federal Bureau of Investigation and other law enforcement agencies time to finish two elaborate undercover operations focusing on members of China's notorious Triad criminal syndicates. The operations, which ended in August, netted $4 million worth of supernotes with narcotics and counterfeit versions of name brand cigarettes.

The operations, called Royal Charm and Smoking Dragon, arrested 59 people suspected of being gang members, including some lured into the United States when federal agents posing as organized crime figures invited them to a staged wedding. Before they were arrested, some of the suspects even offered to sell federal agents shoulder-fired antiaircraft missiles, Mr. Asher said.

He said he did not know if the missiles had been made in North Korea.

Other details of North Korea's counterfeiting operation trickled out in October after the arrest in Northern Ireland of Sean Garland, a leading member of a faction of the Irish Republican Army, on charges he circulated more than $1 million worth of fake $100 notes in Britain and Eastern Europe.

"North Korea has been using all the immunities and technical abilities that only governments have" to counterfeit United States currency, Mr. Asher said. "The whole world has tolerated North Korea's illegal sources of income too long."