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Cigarette firms find major counterfeiting operation in North Korea: WSJ
Yonhap News (South Korea) ^ | January 27, 2005

Posted on 01/30/2006 2:17:53 AM PST by HAL9000

WASHINGTON, Jan. 27 (Yonhap) -- North Korea has established itself as the leading counterfeiter of brand-name cigarettes, circulating more than two billion packs a year worldwide from Taiwan to Belize, the Wall Street Journal reported Friday.

Cigarette maker Philip Morris was tracking down the source of fake Marlboros, and a year later in 2005, the company connected them to North Korea, the paper said.

Cigarette companies have hired former intelligence officials to crack down on the operation and even sent agents into North Korea, and what they discovered was an ongoing lucrative business in the hermit state, sanctioned by the government, it said.

At least one of the knock-off cigarette factories is allegedly controlled by North Korea's security service, while another is linked to a group of elites in the country's Communist Party leadership, said the daily.

An undercover agent hired by Philip Morris went into North Korea, disguised as a buyer looking for bogus cigarettes, according to papers filed in federal court in Washington last year.

The agent was shown a cigarette plant on the east coast of North Korea and was also offered fake U.S. currency, according to the paper.

North Koreans received some US$400,000 for bogus cigarettes and counterfeit American dollars, it said, and Philip Morris notified the U.S. Secret Service of the agent's discovery.

In a separate case from 2004, three Asian men admitted to smuggling counterfeit goods and currency into the U.S, including fake cigarettes, fake $100 bills and fake Cialis, a male-impotency drug; the cigarettes were traced to North Korea, the daily said.

North Korea's distribution network is believed to be global in scale, involving major organized crime rings. Fake cigarettes originating from the communist nation were confiscated in Taiwan, the Philippines, Vietnam and Belize, it said.

"Much more dangerous things than cigarettes can flow along these same routes," a Bush administration official was quoted as saying.

"The North Koreans could import technology and export strategic goods and weapons. It's a big deal."

North Korea has been able to build the counterfeit cigarette business after major tobacco manufacturers, sued by the European Union and others for allegedly supplying smugglers with cigarettes to circumvent taxes, moved their products out of the criminals' hands, the paper said.

Also, counterfeiters decided to hide in North Korea after China began to crack down on cigarette counterfeiting, it said.



TOPICS: Foreign Affairs; News/Current Events
KEYWORDS: cialis; cigarettes; counterfeit; counterfeiting; currency; korea; marlboro; northkorea; philipmorris

1 posted on 01/30/2006 2:17:56 AM PST by HAL9000
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To: HAL9000
"Much more dangerous things than cigarettes can flow along these same routes," a Bush administration official was quoted as saying.

Ya think the (ha ha ha) "BORDER" might have issues too, prez?

2 posted on 01/30/2006 2:19:23 AM PST by HiTech RedNeck
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To: HiTech RedNeck
I wonder if we can ship large quantities of cigarettes to NK as our contribution to humanitarian aid. Hmmmm
3 posted on 01/30/2006 2:23:00 AM PST by jecIIny (You faithful, let us pray for the Catechumens! Lord Have Mercy)
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To: HiTech RedNeck

I want to know several things, note I'm not doubting the accuracy of this story.

1. How are North Koreans producing enough tobacco of sufficient quality to pass as Marlboros? North Korea isn't exactly the geographical equivilent of Virgina, Kentucky and the Carolinas. If tobacco doesn't thrive in places like Ohio, Illinois or Minnesota how can it thrive in North Korea?

2. My godparents son in law is a quality assurance supervisor for RJR and the way he's described their operation to me from a product manufacturing perspective I'm very impressed at how cigarettes are mass produced. It's not really that simple to produce two billion packs of smokes.

From printing the cartons and packs, yeah, that's easy to do. Producing cigarette paper, also not difficult. However when you throw in the quality of tobacco with mass market production? That can't be all that easy to replicate.

If all this tobacco is being grown in greenhouses imagine the resources that would be needed to be diverted from a construction, labor and resources standpoint.

It seems like they're spending far too much on the operation compared to the profits they can reap.

Same guy told me that RJR makes a carton of cigarettes for roughly $3.70 or 37 cents a pack. So how much are these knockoffs going for? You can still buy Marlboros in Eastern Europe for $1.something or less.

I don't see how this is tremendously profitable. Oh wait, I'm assuming they pay the workers making cigarettes anything.

LOL


4 posted on 01/30/2006 2:29:52 AM PST by PittsburghAfterDark
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To: PittsburghAfterDark

Isn't NK/SK a jungle zone. Virtually anything grows there and overnight.


5 posted on 01/30/2006 2:32:58 AM PST by HiTech RedNeck
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To: HAL9000

Counterfeit cigarettes. Now there's an idea whose time has come.


6 posted on 01/30/2006 2:33:05 AM PST by Past Your Eyes (Criticize me if you will, but just don't circumsize me any more. -Kinky Friedman)
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To: HiTech RedNeck
No The Korean Peninsula is not tropical. Your thinking of Vietnam.
7 posted on 01/30/2006 2:38:05 AM PST by jecIIny (You faithful, let us pray for the Catechumens! Lord Have Mercy)
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To: HiTech RedNeck

NK is largely nasty mountains and worse weather. SK has more arable land, but still has the brutal winters and scorching summers. Neither is someplace I'd want to start a farm.


8 posted on 01/30/2006 3:34:13 AM PST by Riley ("What color is the boathouse at Hereford?")
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To: HAL9000
even sent agents into North Korea, and what they discovered was an ongoing lucrative business in the hermit state,

But the government can't find out what the hell is going on with both the N. Korean and Iranian WMD programs. I really don't get this. I sure hope they are lying to us when they say stuff like they were taken by surprise by N. Korea's weapons. If not, the CIA is truly and dangerously incompetent. Perhaps the humint function should be turned over to private industry!

9 posted on 01/30/2006 3:45:24 AM PST by Northern Alliance
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To: PittsburghAfterDark
I agree with you counterfeiting cigarettes is expensive. Phillip Morris makes their money because they are almost 100% automated and replace their equipment every few years.

circulating more than two billion packs a year worldwide from Taiwan to Belize, the Wall Street Journal reported Friday.

Back in the mid 80's when our company was owned by Phillip Morris their three U.S. plants set a record and produced 1 Billion units in a single day. So 2 Billion is weak.
10 posted on 01/30/2006 3:49:01 AM PST by Recon Dad (Force Recon Dad)
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To: PittsburghAfterDark

You're assuming the North Koreans grow their own tobacco. They could import it from any number of countries, including some the Arab countries they are so cozy with.


11 posted on 01/30/2006 3:53:06 AM PST by Junior (Identical fecal matter, alternate diurnal period)
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To: Junior

Also assuming it's real tobacco.


12 posted on 01/30/2006 4:18:54 AM PST by AndrewB
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To: HAL9000

Now they went and did it. They got Mayor Bloomberg pissed at little Kim now. Look out. < / sarcasm >


13 posted on 01/30/2006 4:24:04 AM PST by Ditto ( No trees were killed in sending this message, but billions of electrons were inconvenienced.)
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To: HAL9000

Are the states going to sue DPRK for distributing tobacco products knowing that they kill people?!


14 posted on 01/30/2006 4:58:26 AM PST by GeorgefromGeorgia
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To: PittsburghAfterDark
They buy the tobacco.

They don't care about the quality.

They counterfeit tax stamps and sell the cigs at a high profit margin. Many countries have even higher taxes than we do.
15 posted on 01/30/2006 4:59:33 AM PST by SampleMan
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To: HAL9000

They've already threatened to nuke us if We continue to accuse them of counterfitting Ben Franklins. What's next? Toiletpaper?


16 posted on 01/30/2006 5:06:14 AM PST by wolfcreek
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To: HAL9000

They've already threatened to nuke us if We continue to accuse them of counterfitting Ben Franklins. What's next? Toiletpaper?


17 posted on 01/30/2006 5:06:15 AM PST by wolfcreek
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To: PittsburghAfterDark
You can still buy Marlboros in Eastern Europe for $1.something or less.

When I was in Europe recently and in the Middle East in 2004 I smoked Marlboro Reds (as my preferred brand of Marlboro Medium 100s were hard to come by). In both cases they looked like regular Marlboros except that the "Kings" were sold in a hard pack and they were a little longer than hard pack Marlboros stateside. They were as long and had the same length filter as soft pack Marlboros here. They were also just a little lighter in taste.

I noticed that in both cases these Marlboros were licensed from a distributor in Switzerland.

After smoking these "Reds" for six months I grew to like them. Upon returning to the States I purchased a hard pack of Marlboro Reds and practically choked on my first puff they were so strong!

I also liked the price. $10/carton in Dubai and about $0.70/pack in Ukraine.

18 posted on 01/30/2006 5:16:36 AM PST by Drew68
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To: HAL9000

Possibly they are imprinting other, pre made cigarettes.


19 posted on 01/30/2006 5:19:05 AM PST by The Red Zone
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To: Drew68

When I was stationed in Turkey in 1967-8, Marlboros were a hot item on the gray market. There were also counterfeit Marlboros out there. Pretty good packaging, but the cigarettes were typical Turkish tobacco. Horrible things. I don't know what the point was, except to get a higher price. A lot of Turks smoked Marlboros, and I suspect that a lot of them were fakes. It was a sort of status symbol, really.


20 posted on 01/30/2006 6:23:52 AM PST by MineralMan (godless atheist)
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To: MineralMan
"It was a sort of status symbol, really."

You bet! Back in my smoking days I tried every cigarette imaginable. I tried all the American brands and a lot of the trendy European brands. In my opinion Marlboro was the best cigarette on the face of the earth. I don't think I (or any other committed smoker) could get burned more than once on the fake Marlboro's because I would recognize in a second that I wasn't smoking the real thing. Nobody is going to pay extra for Marlboros they know aren't real Marlboros.

21 posted on 01/30/2006 6:33:53 AM PST by joebuck
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