BEIJING – North Korea is financing illicit activities by printing up bogus U.S. $100 bills and passing them abroad to banking centers such as Macau, the former Portuguese colony now under China’s control, a senior U.S. Treasury official charged Friday.

The counterfeit bills are of such good quality that they’ve come to be called “super notes,” said Stuart Levey, the Treasury under secretary for terrorism and financial intelligence.

Washington has fingered Pyongyang as counterfeiting American currency for more than a decade, but its accusations have become increasingly specific. Last month, U.S. officials accused Macau’s Banco Delta Asia of a range of offenses, including passing fake American currency for North Korea. The bank denies the charges.

On Oct. 7, authorities in Belfast, Northern Ireland, arrested an Irish nationalist, Sean Garland, after a U.S. indictment said that he and six others helped North Korea move more than $1 million in fake American currency through a number of European countries.

Levey charged that efforts by North Korea to counterfeit U.S. $100 bills finance and underpin a variety of activities, including development of its nuclear weapons program.

“It is sort of an astonishing act to have a government counterfeiting the currency of another. It’s also the case that the quality of this particular counterfeit currency is quite good,” Levey said at a news conference.

North Korea denies that it prints fake American money. In a commentary on its official state news service last week, North Korea decried what it called a “smear campaign” and said it “is nothing but a clumsy and base political farce intended to impair the image” of the isolated Stalinist nation.

Despite publicity over the counterfeit “super notes,” North Korea continues to print the bogus bills, Levey said.

“There’s been a super note that’s been created in North Korea recently, quite recently,” he said, offering no further details. “I don’t want to comment exactly on the evidence.”

Levey declined to say how North Korea obtained the technology to produce high-quality fake U.S. currency or how much it has attempted to pass abroad.

Since 1996, when currency featuring larger portraits of American forefathers appeared, the bills use special optically variable ink, embedded security threads, specialized paper and micro printing to combat counterfeiting.

The Sept. 30 federal indictment of Garland, the 71-year-old head of the Workers’ Party, an offshoot of the Irish Republican Army, outlined how U.S. agents think the counterfeiting enterprise began. It said Garland first met with North Korean agents in Warsaw, Poland, in October 1997.

Between late 1997 and mid-2000, Garland and his colleagues operated in Ireland, the United Kingdom, Russia, Belarus, Poland, Denmark, the Czech Republic and Germany, arranging to buy the “super notes” from North Koreans, transporting them and passing them off or selling them, the indictment charges.

It says many of the transactions with North Koreans occurred in Minsk, Belarus, and that Garland acted to make his colleagues “believe the source of the super notes was in Russia,” rather than in North Korea.

The indictment says the fake bills were printed in North Korea under government auspices and that people acting as its agents delivered the bills around the world.

In mid-September, the Bush administration focused on Macau, a thriving gambling and financial center near Hong Kong, accusing one of the banks there of acting on North Korea’s behalf to launder money and pass on counterfeit American currency.

Under provisions of the USA Patriot Act, Levey said, Washington could stop the Banco Delta Asia from accessing U.S. financial markets.

Levey, who visited Macau before arriving in Beijing, said a decision was pending on what sanctions would be imposed, but that Chinese authorities seemed to be approaching the matter seriously.

Levey dismissed any linkage between the charges against North Korea on counterfeiting and ongoing six-nation talks to persuade Pyongyang to dismantle its nuclear weapons programs. The talks are likely to renew in Beijing next month.

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