Kim's Bad Habit

A confidential report compiled by investigators working for a coalition of major U.S., European and Japanese tobacco companies indicates that North Korea has developed a highly lucrative source of hard currency: counterfeit cigarettes. The 11-page document, a copy of which was obtained by TIME, outlines in unprecedented detail the inner workings of this illicit business and the extent to which it may have led North Korea's rogue regime to ally itself with crime syndicates from mainland China and Taiwan.

Based on information from undercover agents, informants and industry insiders, the report, which is dated June 29, 2005, offers...

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