Bank Threatens Legal Actions If Frozen North Korean Funds Moved

Tuesday, March 27th 2007, 8:13 am

By: News On 6

HONG KONG (AP) _ A British investor who is buying a North Korean bank said Tuesday he is trying to block the transfer of money it holds in a Macau bank in a move that might complicate a deal with the North to shut down its nuclear programs.

North Korea refused last week to return to nuclear disarmament talks until about $25 million of its funds frozen at a Macau bank is transferred to the Bank of China.

The transfer was supposed to occur last week, but was delayed for reasons that have not been fully explained.

The British investor, Colin McAskill, told The Associated Press he ``would take whatever steps necessary'' to stop the unauthorized transfer of $7 million of the funds held in Macau's Banco Delta Asia. He said he has written twice to the territory's bank regulator, the Macau Monetary Authority, without receiving a reply.

McAskill has agreed to buy North Korea's Daedong Credit Bank, which is majority foreign-owned, and is representing it in discussions with Macau authorities.

He denied a report that he threatened legal action but said that is an option.

Asked whether the money came from legitimate ventures, McAskill said in an e-mail, ``I have answered this question many times and been widely quoted as saying, Yes it is.''

The $25 million was frozen in September 2005 after the U.S. accused Banco Delta Asia of helping North Korea launder money and handle counterfeit U.S. currency.

The move enraged the North Koreans, who boycotted the nuclear talks for more than a year. They recently returned to the negotiations after the U.S. agreed to settle the banking issue. The funds were to be transferred to a North Korean-owned account at the Bank of China to be used for humanitarian purposes in North Korea.

McAskill said Daedong wants to be allowed to move the money to a temporary account at another Macau bank and later move it one of Daedong's correspondent banks.

The U.S. has decided to cut off Banco Delta Asia from the American financial system, and McAskill said Daedong wants to move its money before that ban takes effect in mid-April, making it difficult to transfer money out of U.S. dollar accounts.

On Monday, a senior Treasury Department official held talks with Chinese officials to try untangle the dispute over North Korea's frozen funds.

Daniel Glaser, deputy assistant secretary for terrorist financing and financial crimes, met officials from China's Foreign Ministry to discuss the money held at Banco Delta Asia, said Glaser's spokeswoman, Molly Millerwise.

Glaser's meeting was ``positive and cordial,'' with officials focused on ``solutions to the implementation matters and our common interest in addressing this issue as quickly as possible,'' Millerwise said in an e-mail.

A statement from the U.S. Embassy in Beijing said Glaser met with officials from the People's Bank of China and the China Banking Regulatory Commission, but it gave no details.

The U.S. agreed to let the money be transferred to a North Korean account at the Bank of China in Beijing, but the release was delayed by the Chinese bank's concerns about accepting money that had been linked to counterfeiting and money-laundering.