Warning: Counterfeit dollars from N. Korea
Treasury Department says the country could use financial deception to get around sanctions.
NEW YORK (CNNMoney.com) -- The Treasury Department warned U.S. financial institutions Thursday that the North Korean government may resort to "deceptive financial practices" to get around economic sanctions.
The advisory from the Treasury's Financial Crimes Enforcement Network comes as the Obama Administration steps up its efforts to prevent North Korea from furthering its nuclear weapons program.
The government said it remains concerned about "high-quality" counterfeit U.S. currency being passed from North Korea and urged banks to scrutinize attempts by North Korean customers to make large cash transactions.
Banks should be wary of attempts to suppress the identity or origin of transactions made by North Korean clients, the advisory said. Money transfers made via third parties, and repeated transfers that appear to have "no legitimate purpose" should also raise red flags.
North Korea drew international criticism in May for conducting a nuclear test and firing several ballistic missiles into the sea.
In June, the United Nations Security Council adopted a resolution that called for stricter measures to prevent Pyongyang from obtaining financial assets that could contribute to the communist regime's nuclear weapons activities.
The resolution also banned financial transactions related to the sale of arms from North Korea and broadened a ban on the import of weapons.
The reclusive nation has a history of evading sanctions and engaging in illicit activities such as counterfeiting, drug running and insurance fraud, said Michael O'Hanlon, a senior fellow at the Brookings Institution who studies North Korea.
He said North Korea will "definitely try" to avoid the current restrictions. "It's consistent with their past behavior and they certainly don't consider it beneath their dignity," he said. "They'll find some new way to cheat."
However, he added that any money gained by skirting sanctions is likely to be minimal.
"They don't need to be that successful, because they're only trying to prop-up a small financial elite," he said.
Meanwhile, the U.S. military is tracking a North Korean ship believed to be carrying illicit weapons or technology.
In accordance with the recent U.N. resolution, the U.S. will request permission to search the ship or press any port the ship docks in to inspect it for illegal materials, Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, told reporters at a news conference Thursday.
However, the United States nor any other navy will forcibly board a North Korean ship without permission, Mullen said. North Korea has warned that any effort to stop one of its ships would be considered an act of war. 
