north korean supernotes

119 Pages·2014·1.43 MB·English

NORTH KOREAN SUPERNOTES:
NUCLEAR ARMS FINANCED
BY COUNTERFEIT
CURRENCY

MICHAEL YATSKIEVYCH

Intelligence and National Security Studies

APPROVED:

Larry A. Valero, Ph.D., Chair
Damien Van Puyvelde, Ph.D.
Alexandra Luce, Ph.D.

Bess Sirmon-Taylor, Ph.D.
Interim Dean of the Graduate School
Copyright ©

by
Michael Yatskievych
2014
NORTH KOREAN SUPERNOTES:
NUCLEAR ARMS FINANCED
BY COUNTERFEIT
CURRENCY
By
MICHAEL YATSKIEVYCH, B.A., B.S.

THESIS

Presented to the Faculty of the Graduate School of
The University of Texas at El Paso
in Partial Fulfillment
of the Requirements
for the Degree of

MASTER OF SCIENCE

Intelligence and National Security Studies
THE UNIVERSITY OF TEXAS AT EL PASO
May 2014
TABLE OF CONTENTS
TABLE OF CONTENTS ......................................................................................................... iv
LIST OF TABLES .................................................................................................................. vii
LIST OF FIGURES ............................................................................................................... viii
LIST OF ABBREVIATIONS AND ACRONYMS ................................................................ ix
CHAPTER 1: INTRODUCTION ..............................................................................................2
1.1 Background ................................................................................................................2
1.2 Research Area of Study ..............................................................................................3
1.3 Research Aim and Objectives ....................................................................................4
1.4 Assumptions, Preliminary Questions, and Preliminary Hypotheses .........................5
1.5 Framework of Thesis .................................................................................................6
CHAPTER 2: LITERATURE REVIEW ..................................................................................7
2.1 Introduction .................................................................................................................7
2.2 Why Would DPRK Use Supernotes? .........................................................................8
2.3. How are Supernotes Dangerous to the US and the World? .....................................15
2.4. Where and How are Supernotes Made? ...................................................................25
2.5. How the US and the Global Community Addressed Supernotes ............................28
2.6. Perspectives Not Concurrent with the Dominant Paradigm ....................................36
iv
CHAPTER 3: METHODOLOGY ..........................................................................................40
3.1 Research Question, Aim, and Objectives .................................................................40
3.2 Data Collection, Reliability Assessment, and Limitations .......................................41
3.3 The Traditional Method of Intelligence Analysis .....................................................42
3.4 What is ACH? ...........................................................................................................43
3.5 What is Intuitive Analysis? .......................................................................................45
3.6 Three Key Contrasting Elements: ACH vs. Intuitive Analysis ................................48
3.7 Is ACH Methodology Superior to Intuitive Analysis? .............................................49
3.8 Is ACH the Proper Evaluation Tool for Studying Supernotes? ................................56
3.9 The ACH Process ......................................................................................................57
CHAPTER 4: RESULTS .........................................................................................................63
4.1 Data Set One .............................................................................................................65
4.2 Data Set Two.............................................................................................................65
CHAPTER 5: ANALYSIS ......................................................................................................67
5.1 Is North Korea Capable of Producing Supernotes? ..................................................67
5.2. Are Supernotes Responsible for the DPRK’s Nuclear Program? ............................70
v
CHAPTER 6: CONCLUSION ...............................................................................................74
APPENDIX - A: Key Assumption Check – ACH 1 ...............................................................83
APPENDIX - B: Is DPRK Printing Supernotes? – ACH Matrix 1 .........................................85
APPENDIX - C: ACH Inconsistency Score vs Hypothesis, Matrix 1 .....................................87
APPENDIX - D: Is DPRK Printing Supernotes? –Evidence List 1 .......................................88
APPENDIX - E: Key Assumption Check – ACH 2 ...............................................................93
APPENDIX - F: Supernotes Financing DPRK's Nuclear Program -ACH Matrix 2 ..............96
APPENDIX - G: ACH Inconsistency Score vs Hypothesis, Matrix 2 ....................................98
APPENDIX - H: Supernotes Financing DPRK’s Nuclear Program - Evidence List 2 ...........99
BIBLIOGRAPHY ..................................................................................................................106
CURRICULUM VITA ..........................................................................................................110

vi
LIST OF TABLES
Table A.1 : Is DPRK Printing Supernotes? – ACH Matrix 1.1 ................................................... 85
Table A.2: Is DPRK Printing Supernotes? – ACH Matrix 1.2 .................................................... 86
Table A.3: Supernotes Financing DPRK’s Nuclear Program – ACH Matrix 2.1 ....................... 96
Table A.4: Supernotes Financing DPRK’s Nuclear Program – ACH Matrix 2.2 ....................... 97

vii
LIST OF FIGURES
Figure 3-1. Doctor’s Anecdote - Less is More ............................................................................ 54
Figure A.1: Inconsistencies- Is DPRK Printing Supernotes? ....................................................... 87
Figure A.2: Inconsistencies- Supernotes Financing DPRK’s Nuclear Arms Program ................. 98
viii
LIST OF ABBREVIATIONS AND ACRONYMS
A.Q.K. Abdul Qadeer Khan, chief nuclear scientist, Pakistan
BDA Banco Delta Asia
BEP Bureau of Engraving and Printing
CIA Central Intelligence Agency
CBRN Chemical, Biological, Radioactive, Nuclear [weapons/arms]
DPRK Democratic People’s Republic of Korea – North Korea
EO Executive Order
HEU Highly Enriched Uranium
HRES House Resolution
IAEA International Atomic Energy Agency
IAI Illicit Activities Initiative
IRBM Intermediate Range Ballistic Missile
KOMID Korea Mining Development, Trading Corporation
KPA Korean Peoples’ Army
KWP Korean Workers Party
LWR Light Water Reactor
MTCR Missile Technology Control Regime
NIS National Intelligence Service
NGO Non-government organization
NMD National Missile Defense
NPT Non-Proliferation Treaty
OECD Organization for Economic Co-operation and Development
ix
OFAC (US Department of the Treasury) Office of Foreign Assets Control
ROK Republic of Korea – South Korea
TOC Transnational organized crime
UNSCR United Nations Security Council Resolution
USFK United States Forces Korea

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