The United States says the North Korean government officially sanctions counterfeiting, drug trafficking and other illegal activities abroad.

National Public Radio on Wednesday said 14 federal agencies took part in the probe initiated in 2001 by David Asher, former senior adviser for East Asian and Pacific Affairs at the U.S. State Department.

The report said the North has earned more than 500 million dollars a year by counterfeiting U.S. and Japanese currencies and producing narcotics and fake medicine and cigarettes.

NPR said plenty of evidence show agents and organizations under the North Korean Workers' Party have key roles in the illegal activities.

In Washington, the Bush administration is split over how to deal with the problem.

Moderates urge the use of pressure over the matter as leverage to get the North to drop its nuclear program and join the global community, but hardliners want more pressure to expedite the regime's collapse.