North Korea warned its overseas companies to check for fake dollar bills

North Korea warned its overseas state-run enterprises to take measures to prevent counterfeiting–of U.S. dollars–which the companies use to send “loyalty payments” to Pyongyang, an internal document obtained by Radio Free Asia revealed.

The document was provided to RFA Korean by the Seoul-based human rights group Voice of One Calling. 

RFA staff showed it to former senior North Korean diplomats, who said it looked authentic, and that it had likely been issued on May 8, 2020, at the height of the COVID-19 pandemic through the North Korean consulate in Shenyang, China. 

The memo directs North Korean businesses in China to meticulously keep a record of the serial numbers of every US$100 and US$50 bill paid to North Korea. That way, should any counterfeit bills be found, it would be easy to trace which company had used them. 

The reason, it said, was because two counterfeit U.S. dollar bills had been found in previous payments.

Dollars preferred

Despite its enmity for the United States, North Korea prefers U.S. dollars because they are relatively stable and are accepted almost everywhere. 

North Korea’s overseas enterprises are tasked with generating desperately needed foreign cash that can help the one-party state remain solvent, or be diverted into the leadership’s slush funds.

The order is somewhat ironic in that North Korea itself is widely believed to be involved in counterfeiting dollar bills.

Those operations began in the 1970s, and by the 1990s Pyongyang was one of many entities able to make “superdollars,” which is what U.S. law enforcement calls extremely high-quality fake $100 bills. 

This, and other high-quality counterfeits led the United States to redesign the note.

RFA Korean reported in March that the North Korean government was cracking down on counterfeit dollars because they were being widely circulated in the country. RFA Korean also reported in 2016 that North Koreans preferred the most recently issued $100 bills over previous issues because they were harder to counterfeit.

Double payment

According to the 2020 internal document, if a company were to not include a note listing all the serial numbers in a payment, and any fake currency was found, the company would have to make the payment again.

Two former North Korean diplomats told RFA that the practice of writing serial numbers for U.S. bills has been policy for a long time, but some trade units were not diligently following orders. 

Ri Il Gyu, who was once a North Korean diplomat in Cuba, told RFA on Tuesday that bills smaller than $50 do not require serial number documentation. 

“There have been cases of counterfeit money being mixed in with loyalty funds,” Ri said, explaining that sometimes this is not deliberate and the payer was unaware that they had counterfeit cash. “There is no severe punishment for this, but the person responsible must pay compensation.”

But sometimes the diplomats and company officials know the money they are sending to Pyongyang is not legitimate, Ryu Hyun-woo, who was once acting ambassador to Kuwait, told RFA. 

“People can buy a counterfeit $100 bill for $20,” he said. “When I was short like $200, I would put in fake bills.”

He said that internal counterfeiting was discovered internally in 2015 and 2016, when sanctions against North Korea were getting more stringent. 

Though North Korea may have been the origin of high-quality fakes of the $100 bill, Ryu thinks that that’s not the case today. 

“It is questionable whether North Korea can currently secure the appropriate materials to produce counterfeit money,” he said.

Translated by Claire S. Lee. Edited by Eugene Whong and Malcolm Foster.