AMERICAN CONCERNS ABOUT BANKING COOPERATION BETWEEN ROK AND DPRK MAY BE WELL FOUNDED

North Korean map of Korean Peninsula

There have been reports that The US Department of the Treasury contacted seven South Korean banks recently, warning them that their efforts to open relationships with North Korean financial institutions would not only violate international sanctions, such acts might provide an opening for the DPRK to sabotage the economy of South Korea, or even the US.

As a part of South Korea's very public efforts to create closer ties to North Korea, purportedly resulting in denuclearization of the Korean Peninsula, the ROK Government has encouraged the establishment of financial connections. North Korea has a long history of efforts to destabilize the South, including its economy, and there are concerns that it may seek to disrupt consumers' faith in their banks and government through financial crime, or possibly reach the US economy.

One of the major issues is the Supernote, the USD$100 bill, of which there are large quantities in storage on both sides of the 38th parallel. in the South, a powerful Korean organized crime syndicate has possessed the notes, in bulk and in secure warehouses, and since it acquired them from the DPRK, it is believed to be closely linked to its leadership. The syndicate, which has allegedly long held links to certain ROK government officials, is believed to have some sort of immunity from prosecution for that reason.

 If the world economy was again flooded with counterfeit notes, but this time very good fakes, foreign holders of US currency, which is deemed by them to be a hedge against the loss in value of their own national currencies, might dump their extensive holdings upon the global market, and actually disrupt the value of Dollar in international trade. Whether Treasury is successful in denying DPRK access to South Korean banks remains an open question.