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North Korean supernotes were made by a former spy

June 27,2016
A North Korean agent arrested by Chinese authorities earlier this month for circulating counterfeit $100 banknotes in Dandong was a former member of the Operations Department responsible for major espionage missions against Seoul, a source with knowledge of North Korea exclusively told the JoongAng Ilbo.

The source said that the information was passed down from a businessman involved in trade with North Korea, adding that the arrested agent was going to pay that businessman for trade goods but could not do so apparently because of his arrest.

According to the source, “That businessman asked North Korean officials where the arrested agent came from and the answer was the Operations Department.”

The revelation came after initial reports last week that the North Korean agent was arrested in the border city of Dandong in Liaoning Province, northeastern China, for having distributed counterfeit U.S. dollars.

It was reported that the agent brought $5 million in cash into China from North Korea in order to make payments for household goods and home appliances.

These goods were supposedly distributed to North Koreans during the April 15 celebration of the birthday of the country’s late founder, Kim Il Sung, as well as during its ruling Workers’ Party’s seventh congress held in early May, the first of its kind in nearly four decades.

But a number of the notes were found to be counterfeit when they were run through banknote counters by bank employees, so Chinese authorities ordered the relevant account frozen and arrested the North Korean agent.

The Operations Department, the agent’s former employer, was responsible for intelligence and espionage operations inside South Korea and in a third country. The special-purpose department is considered by South Korean intelligence to have been responsible for a submarine infiltration near Sokcho in Gangwon in 1998. All nine North Korean agents inside the submarine committed suicide to avoid capture and were all found dead.

The clandestine bureau was later expanded to become the current General Bureau of Reconnaissance run under the Workers’ Party of Korea by merging with the party’s Office No. 35 and the Ministry of People’s Armed Forces’ Reconnaissance Bureau in 2009.

Former North Korean leader Kim Jong-il, the father of incumbent leader Jong-un, once praised the Operations Department as the one bureau that would fight until the end to protect the ruling party.

After years of circulating counterfeit $100 banknotes, North Korea’s so-called supernotes seemed to have disappeared in recent years. Pyongyang’s nearly flawless counterfeit notes were a major source of slush funds for the regime and date back to the 1970s. But a major crackdown by U.S. authorities and new security features on banknotes led to a decline in the trade.

BY KIM HYOUNG-GU, KANG JIN-KYU [kang.jinkyu@joongang.co.kr]


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