North Korean Supernotes:

Nuclear Arms Financed By Counterfeit Currency

Thesis Defense prepared for the UTEP Intelligence and National Security Studies

program

Michael Yatskievych - Spring 2014

Introduction Research Question:

Is North Korean production of counterfeit US currency responsible for the advancement of North Korea’s nuclear program?

Relevance:The study of supernotes may aid in retarding or ending North Korea’s atomic mission.

Originality:Specialized academic knowledge of North Korea is limited and subjective.

Methodology & Literature - 1

Intuitive Method (Synthetic Psychological Function, Top-Down/Satisficing,

Qualitative): Simon and Parikh

Analysis of Competing Hypotheses (Structured Analysis, Ground-Up, Quantitative):

Heuer, Gigerenzer, and Jøsang &Pope

Systematic Investigation (Combination of above): Heuer, PARC, Khatri & Ng

Choosi

ng

an

An

aly

tica

l M

eth

od

Methodology & Literature - 2

Hypotheses and Evidence-Less is more, WYSIWYG, GIGO:

Heuer, Gigerenzer, Jøsang &Pope

Why Does North Korea Need Supernotes?-Juche and Songun-Crippled Economy-Sanctions, Humanitarian Aid Failure, and Cash-Only Society

Alternative perspectivesBender, Chanlett-Avery, Elich, Hall, Nanto, SmithIn

form

ati

on M

an

agem

en

t

Summary of Findings and Implications

Supernotes are NOT Re-sponsible for DPRK Nuclear

Arms Program

Supernotes are DIRECTLY Responsible for DPRK Nuclear Arms Program

Supernotes are PARTLY Responsible for DPRK Nu-

clear Arms Program

16.656

4

1

Inconsistencies- Supernotes and DPRK’s Nuclear Arms Program

Weig

hte

d Inconsi

stency S

core

Conclusions ACH is a superior tool, but beware… North Korea is responsible for manufacturing

supernotes and will engage in more illicit activities.

Additional Considerations:- Recent History- Economic Sanctions- Agriculture and Energy Dependency- US-DPRK hetero-norm relationship

Research Obstacles

Table 1. Is DP

RK

Capable of

Producing S

upernotes?

Table 2. Are S

upernotes Responsible

for DP

RK

’s Nuclear P

rogram?

Sources - 1Albright, David. Peddling Peril: How the Secret Nuclear Trade Arms America’s Enemies. Free Press,

Institute for Science and International Security. New York. 2010.

Bender, Klaus W. “Supernotes: Das Geheimnis der gefaelschten Dollarnoten.” Frankfurter Allegemeine. 1 August 2007.

Chanlett-Avery, Emma and Rinehart, Ian E. “North Korea: US Relations, Nuclear Diplomacy, and Internal Situation.” Congressional Research Service. 13 September 2013.

Coe, Andre J. “North Korea’s New Cash Crop.” The Washington Quarterly. Vol. 28, Issue 3. Summer 2005.

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2013).

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Sources - 2Haggard, Stephan and Marcus Noland. “Follow the Money: North Korea’s External Resources and Constraints.” Peterson Institute for International Economics, 2008.

Haggard, Stephan and Marcus Noland. “North Korea’s External Resources and Constraints.” Korea Economic Institute and the Korea International Institute for Economic Policy, (2008), http://www. keia.org/sites/default/files/publications/Haggard_Noland1.pdf (accessed 10 December 2013).

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counterfeiting- charges-against.html (accessed 10 December 2013). Heuer, Richards J. Jr. Improving Intelligence Analysis with ACH. Center for the Study of Intelligence for CIA. 1999. Heuer, Richards J. Jr. Psychology of Intelligence Analysis. Center for Study of Intelligence for CIA. 1999. Jǿsang, Audun and Simon Pope. “Analysis of Competing Hypotheses Using Subjective Logic.” CRC for

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The Use and Counterfeiting of United States Currency Abroad, Part 3. Washington D.C.: Report to Congress from Secretary of the US Department of Treasury, September 2006.

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