Kim Jong Il Unplugged, Part 4: Smoke ‘em While You’ve Got ‘em.

Several months ago, some misguided BBC staffer asked me to fight above my weight and debate former Ambassador Donald Gregg about the allegation that British American Tobacco was secretly making cigarettes in North Korea. (The debate was for a pilot program and never aired.) At the time, I argued that the decision to grow or import tobacco should also be viewed as a decision not to grow or import food. Amb. Gregg, now president of the Korea Society, is a strong proponent of “engaging” North Korea. His argument was that smoking is bad. I saw that argument as having marginal moral relevance, a dodge of the question of whether this kind of engagement was really good for North Korea or the world. Amb. Gregg also touted his Society’s exchange programs with North Korea. On further investigating their Web site, I learned that the Korea Society’s contribution to North Korea opening itself to legitimate commerce consisted, in part, of teaching the North Koreans digital watermarking (useful for counterfeiting intellectual property) and secure fax technology. I’d love to show you, but that page later disappeared from the Korea Society site.

[Update: Here is a link to the paper, entitled “Bilateral Research Collaboration Between Kim Chaek University of Technology (DPRK) and Syracuse University (US) in the Area of Integrated Information Technology.” Among the signatories on the front cover are “Donald P. Gregg and Frederick F. Carriere, The Korea Society, Han Song Ryol and An Song Nam, Permanent Mission of the Democratic People’s Republic of Korea.” Ah, Han Song Ryol. Remember him? Here is the relevant passage, which appears on Page 3:

At the invitation of KUT, SU sent a delegation to Pyongyang in mid-June 2002. During this time, SU researchers met again with their KUT counterparts and were given tours of research labs and facilities and provided an overview of KUT research priorities in information technology. Areas of particular interest included a secure fax program (this is now being marketed through a Japanese company), machine translation programs, digital copyright and watermarking programs, and graphics communication via personal digital assistants.

I don’t claim to know what technology was actually transferred, nor do I claim to be an expert on digital copyright or watermarking programs, beyond having found that it’s designed to protect intellectual property. If you can fill us all in on the legitimate and other uses of this technology, please drop us a comment. Thanks much to The Oriental Redneck and his wayback machine.]

One of the reasons BAT kept that business relationship secret was the effect it had on one of BAT’s executives, who was running for the leadership of Britain’s Conservative Party. Another was the likely fear of litigation by BAT’s competitors, who might want to know where the North Koreans acquired the specialized knowledge to make so much money by counterfeiting their top-selling brands:

North Korea is believed to earn between US$500 million and $700 million a year by making and selling fake U.S. and Japanese cigarettes, a U.S. radio station reported Wednesday, quoting a former U.S. official.

“Counterfeit tobaccos are one of the largest, probably the largest single source of income for the North Korean regime,” David Asher said in an interview with the Washington-based Radio Free Asia.

Asher, who until July 2005 had served under former Assistant Secretary of State for East Asia and Pacific Affairs James Kelly, said the North’s communist regime operates as many as 10 plants to make fake U.S. and Japanese cigarettes.

Those plants are scattered throughout North Korea, including its capital, Pyongyang, and its eastern industrial zone, Rajin, he said.

The counterfeit cigarettes, Asher said, are usually packed and sent in containers to China and then to other Asian countries for sale.

The largest source of income? Staggering.

It would be interesting to see which tobacco companies would try to sue the North Koreans for counterfeiting their brands. Since the Foreign Sovereign Immunities Act wouldn’t seem to offer much protection for their commercial activities, the next question is whether they’d even make an appearance to contest the suit. My bet is that they wouldn’t, meaning that we’re looking at a potential default judgment and the attachment of their assets, wherever they can be found. This presumes, of course, that the tobacco companies can get the evidence to meet the “preponderance” standard, and that the North Korean pocket is in fact deep enough to justify litigation. The frozen North Korean assets identified by the U.S. Treasury Department should be sufficient to pay the lawyers. And although I’d prefer to see that money go for North Korea’s reconstruction, a new RJR Headquarters is probably still a better use than propagating Kim Jong Il’s racketeering tyranny.

This revelation also fuels my suggestion that we lower the PATRIOT 311 boom on them, in addition to whatever other sanctions Rep. Dana Rohrabacher thinks we’re about to impose.

“We are going to discuss with the regional leaders here and determine what is appropriate (as a sanction) but we’ll make sure that North Korea realizes that if they do launch missiles (again) they will be shot down by the U.S.,” Rep. Dana Rohrabacher told Yonhap News Agency in an interview.

The Republican from California declined to disclose the nature of the new sanctions being considered by the U.S. government but said there will be in addition to financial sanctions clamped down on the communist country last year.

With so much of the wrong kind of attention focused on North Korea’s cigarette counterfeiting, don’t expect it to go on long. After all, the Japanese are reporting that they’ve shut down most of North Korea’s ampetamine racket there.

(Kyodo) _ The amount of illegal amphetamines seized by Japanese police in the first half of this year marked an 85.6-percent year-on-year decrease to a record-low 13.1 kilograms as the police have targeted key trafficking routes from North Korea, the National Police Agency said Thursday.

In particular, a crackdown on sea routes contributed to the decrease, with NPA officials saying the amount of amphetamines seized during the period was the smallest since 1991, when they began keeping half-year tallies.

The police plan to use sting operations to stop drug couriers flying to Japan with amphetamines hidden in their luggage, the officials said.

According to the NPA’s survey, 6,319 people were arrested or sent papers during the period on suspicion of being involved in stimulant drug cases, down 1.6 percent from a year earlier. Of the total, 54 percent, or 3,413, up 3.1 percent, were gangsters or those close to crime syndicates in Japan, it indicated.

The survey also showed fewer people in their 20s or younger were involved in illegal drug cases in the January-June period, but the number involving people of all other ages increased.

Due to the supply shortage, the black-market price of amphetamines has risen to about 60,000-65,000 yen per gram, the officials said.

How serious is the United States about stopping North Korean counterfeiting? This serious:

The White House accused North Korea on Thursday of counterfeiting dollars to support terrorism and said the United States would continue to try to stem such illicit activity as well as Pyongyang’s nuclear ambitions.

Well, it would be nice if Mr. Snow would give us some details of his allegation, and if Reuters would report them. Surely this can’t be it:

“The North Koreans have walked away because they are doing money laundering to finance global terror. We don’t want them to have money to finance global terror, sorry, period,” Snow said.

“We don’t think it’s in our interest to allow them to be selling weapons that could be used to destroy innocent human lives,” he said.

That’s it? Well, I don’t think it’s accurate to say “finance global terror” is the same thing as “support terrorism” without more details that this report doesn’t contain. Conventional weapons like the Taepodong II, after all, can create a state of “global terror,” particularly given who North Korea’s customers are. The North Korean connection to the Hezbollah and the Bekaa Valley goes way, way back, of course. I’d like more details. And of course, Snow was talking about dollars, not Marlboros, but if the issue is what North Korea buys with its ill-gotten gains, it’s really a distinction without a difference.