U.S. Ready To Release Disputed North Korean Money

Wednesday, March 14th 2007, 9:57 am
By: News On 6

WASHINGTON (AP) _ The Bush administration is taking steps that could enable the release of North Korean assets frozen in a Macau bank _ an action sought by Pyongyang as part of a nuclear arms deal.

In a two-step decision, the Treasury is severing ties between Banco Delta Asia and the U.S. financial system because of its alleged money laundering for North Korea, a government official said Wednesday. The official spoke on condition of anonymity because the official announcement has not yet been made.

At the same time, however, the department is expected to provide guidance to help overseas regulators identify highest-risk and lower-risk account holders. This risk assessment in turn could be used by Macau to release some North Korean money that has been frozen and is being held by the bank.

Treasury planned a news conference later Wednesday.

Banco Delta Asia holds $24 million in frozen North Korean assets. The frozen accounts have been a major sore spot for the North Korean government and so angered Pyongyang that it had refused to participate in six-nation nuclear arms talks for more than a year.

The North did return to disarmament talks in December. A deal was struck Feb. 13, in part because of an agreement to resolve the dispute over the frozen funds within 30 days.

The United States has spent 18 months investigating the bank.

The Associated Press has reported that $8 million to $12 million could be unfrozen by authorities in Macau, a semiautonomous territory of China, following the department's action. It could take weeks to release any money.

At the State Department, deputy spokesman Tom Casey had no comment on the planned Treasury announcement except to note that the U.S. officials had promised North Korea that they would ``resolve or produce a final ruling'' on the financial sanctions by mid-month.

``Everyone's got obligations. Everyone intends to meet their obligations. At least we do,'' Casey said.

The chief U.N. nuclear inspector on Wednesday said North Korea was ``fully committed'' to an agreement that requires it to shutter its main nuclear reactor and let in inspectors as soon as the U.S. drops financial sanctions.

Mohamed ElBaradei, head of the Vienna-based International Atomic Energy Agency, described the talks on how North Korea will close its main atomic reactor at Yongbyon as ``quite useful.''

``They said they are fully committed to the Feb. 13 agreement, that they are ready to work with the agency to make sure that we monitor and verify the shutdown of the Yongbyon facility,'' he said. He added that officials in Pyongyang also ``reiterated they are committed to the denuclearization of the Korean peninsula.''

The U.S. government first took action against Banco Delta Asia in September 2005, calling it a ``willing pawn for the North Korean government to engage in corrupt financial activities.''

At that time, the Treasury Department put the bank on the U.S. government's money-laundering blacklist for what the department determined were lax money-laundering controls. The department also proposed cutting off the bank from the U.S. financial system, a power provided by the USA Patriot Act. The U.S. alleged the bank help North Korea distribute counterfeit currency, smuggling, and other crimes.

Banco Delta Asia has said money might have been laundered at the bank but there was no evidence that the institution was aware it was being used for that purpose.