PYONGYANG DENIES TIES TO HEROIN-DRUG TRADE

SEOUL, South Korea -- North Korea denied it was involved in an attempt to
smuggle heroin valued at $50 million by ship into Australia last month, as
the Bush administration signaled it was set to take a much tougher line on
Pyongyang's alleged narcotics trade.

U.S. officials have said in recent days that they believe illicit drug
sales by North Korea play a key role in funding dictator Kim Jong Il's
weapons programs. Officials at the U.S. military command in Seoul say
Pyongyang earns $500 million to $1 billion annually from the drug trade.

On Monday, U.S. Secretary of State Colin Powell said the U.S. would deal
with North Korea's narcotics trafficking, along with its missiles and
nuclear weapons, citing the heroin-smuggling case in Australia. Hawks
inside the Bush administration are arguing the U.S. should seek to cordon
off North Korean exports, either through an economic embargo or through the
interdiction of North Korean ships.

The Australian Navy commandeered the 4,480-ton North Korean ship, the Pong
Su, on April 20 and charged its 29 crew members with aiding and abetting
the import of an illegal product into Australia. Australian Foreign
Minister Alexander Downer said a member of North Korea's ruling Worker's
Party was on board the ship, which he said was state-owned.

A North Korean Foreign Ministry spokesman said the drug-trafficking
allegations were a "smear campaign" to pressure North Korea to end the
standoff over its suspected nuclear-weapons programs. The government "has
consistently been opposed to the misuse and smuggling of drug [s] and has
nothing to do with the recent case," the spokesman was quoted as saying by
the North's official Korean Central News Agency.

"We have informed the Australian side that the ship Pong Su is a civilian
trading ship and the ship owner's side has no idea of this at all," the
North Korean spokesman said. The U.S., Japan and Taiwan accuse North Korea
of also being a major supplier of amphetamines in the Asian region.

In a
(http://online.wsj.com/article/0,,SB105106006946882000,00.html?mod=artic
le-outset-box) front-page story in The Wall Street Journal last month,
high-level North Korean defectors and regional intelligence officials said
that Kim Jong Il and his late father, Kim Il Sung, were directly involved
in developing the heroin trade. The leaders saw the opium trade as being a
crucial means to earn hard currency, the article said.

In Australia, the opposition Labor Party on Tuesday called on the nation's
foreign minister to deliver a stern diplomatic rebuke to North Korea if the
government has evidence that North Korean officials were involved in the
drug shipment. "If Mr. Downer has evidence that this vessel was introducing
drugs to Australia on behalf of the North Korean regime, he must expel the
North Korean ambassador, it's as simple as that," said the party's
foreign-affairs spokesman, Kevin Rudd.