U.S. officials say they have concluded that counterfeit dollars seized by South Korean police last year were printed in North Korea. That appears to contradict recent statements by South Korean officials, who have said Seoul has no evidence of North Korean counterfeiting after 1998. South Korean authorities have been reluctant to support U.S. accusations on the sensitive issue.

U.S. officials say that North Korea has recently engaged in counterfeiting - and South Korea has seen evidence of it.

One official at the U.S. Embassy in Seoul says they have shown South Korean authorities notes from a 2001 and 2003 series of $100 bill forgeries. Washington says its investigations have concluded the notes were manufactured in North Korea.

The embassy official, who would not allow his name to be used, says U.S. investigators also determined some notes the South Korean police seized last April were forged in North Korea.

U.S. Treasury officials visited Seoul in late January to discuss the North's counterfeiting and other issues. However, South Korean lawmakers say the government has told them it has no evidence North Korea has produced counterfeit bills since 1998.

Roh Moo-hyun

The administration of South Korean President Roh Moo-hyun pursues a policy of economic engagement and reconciliation with North Korea. Lee Jang-hie, a legal scholar at Hanguk University of Foreign Studies, says Seoul is reluctant to accuse the North of criminal activity to avoid angering Pyongyang.

"The South Korean government should not mention about it," Lee said. "This is a very sensitive issue. When we mention the sensitive issues - human rights, or counterfeiting money - North Korea stops all the channels with South Korea."

South Korean officials have not explicitly supported U.S. accusations of North Korean counterfeiting, but they have expressed concern over them. They say they are working closely on the issue with the United States.

The U.S. ambassador in South Korea has said Pyongyang is feeling the effect of U.S. sanctions imposed against a handful of North Korean companies because of alleged money laundering and other criminal activity. He says North Korea should provide concrete evidence it has stopped counterfeiting.

North Korea denies the accusations and says it will not return to multinational negotiations on ending its nuclear weapons programs until the U.S. sanctions are lifted. Washington says it views the counterfeiting as a law enforcement issue separate from the nuclear talks.