U.S. Nears End Of Probe Of Macau Bank Holding North Korean Assets

Monday, March 12th 2007, 2:37 pm
By: News On 6

WASHINGTON (AP) _ The United States is wrapping up its investigation of a Macau bank that holds $24 million in North Korean assets, a development that could lead to the release of some of the funds.

The frozen accounts have been a sore spot for the North Korean government.

The Treasury Department is expected to make an announcement this week that could help overseas regulators identify highest-risk and lower-risk account holders, a government official said Monday. This risk assessment in turn could be used by Macau to release money that has been frozen. The official spoke on condition of anonymity because of the sensitivity of the matter.

Some $24 million in North Korean accounts at the U.S.-blacklisted bank, Banco Delta Asia, has been frozen by the Macau, a semiautonomous territory of China. The Associated Press has reported that $8 million to $12 million could be unfrozen following the department's action.

``We're working hard to resolve the BDA matter and will do so in the very near future,'' said Molly Millerwise, a Treasury Department spokeswoman.

Kim Kye Gwan, the North's envoy to the nuclear disarmament talks, said Saturday that the United States had promised to end sanctions against the bank. If Washington fails to do so, he said, North Korea ``will be forced to take corresponding steps.'' Kim spoke to reporters in Beijing.

The U.S. government moved against Banco Delta Asia in 2005, putting the bank on its money-laundering blacklist for lax controls. The U.S. alleged the bank helped North Korea distribute counterfeit currency and engage in other illicit activities. The U.S. action prompted Macau to freeze the $24 million. Banks around the world, meanwhile, severed ties with North Korea for fear of losing access to the U.S. financial system.

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.

The department has been investigating Banco Delta Asia for 18 months.

``The investigation has only confirmed the ongoing illicit activity at BDA, including the bank's willingness to facilitate illicit transactions on behalf of their North Korean-related clients,'' Millerwise said.

The department has proposed cutting the bank off from the U.S. financial system.

The financial clampdown on North Korea had so angered Pyongyang that it had kept away from six-nation nuclear arms talks for more than a year. The financial restrictions were still a sore spot when the North did return to disarmament talks in December. An agreement to resolve the financial matter within 30 days was key to a potential breakthough deal that the North struck Feb. 13 with the United States and four other nations.