BBC NEWS | Asia-Pacific | US moves to release N Korea funds

BBC NEWS | Asia-Pacific | US moves to release N Korea funds

US moves to release N Korea funds
The US has announced steps that could give North Korea access to funds frozen in a Macau bank, one of its key demands for dismantling its nuclear programme.

The US Treasury has barred American banks from dealings with Banco Delta Asia (BDA), whom it accused of a role in North Korea-linked money laundering.

North Korean accounts worth $25m (£13m) have been frozen there since 2005.

But the move formally ends the US probe and could allow officials in Macau to release some of Pyongyang's money.

Last month, North Korea agreed to end its nuclear programme in return for large quantities of foreign aid.

Under the 13 February deal, Pyongyang has 60 days to shut and seal its Yongbyon nuclear reactor.

But one of its key demands has been the release of its funds from BDA.

'Illicit activity'

In September 2005 the US accused the bank of acting as a conduit for money earned by Pyongyang from counterfeit currency and drug smuggling.

Soon afterwards the Macau authorities took control of the bank and froze North Korea's accounts.


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Under earlier 2005 deal, N Korea agreed to end nuclear programme and return to non-proliferation treaty
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US Treasury Under-Secretary Stuart Levey, announcing the US action, said that the 18-month probe had confirmed BDA's "willingness to turn a blind eye to illicit activity, notably by its North Korean-related clients".

The measures mean US banks and companies must sever all ties with the Macau-based institution.

But now, says the BBC's Jonathan Beale in Washington, it is up to the Macau authorities whether any of North Korea's assets can be released.

The US is expected to issue guidance to financial regulators to identify high-risk accounts.

That could pave the way for North Korea to gain access to some of its money.

But, our correspondent says, it is still not clear how North Korea will react to this announcement and what effect it might have on last month's deal.

The move came as the head of the UN nuclear watchdog, Mohamed ElBaradei, said North Korea was still "fully committed" to giving up its nuclear programme.

The IAEA leader was speaking in Beijing after holding talks in Pyongyang, which he described as "quite useful".

Delegates from the six countries involved in the multilateral talks on North Korea's nuclear programme will meet in Beijing next week for further discussions on implementing the 13 February deal.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/asia-pacific/6452189.stm

Published: 2007/03/14 23:58:17 GMT

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