Monday, April 02, 2007

Bank threatens to sue over NK funds

Source: CNN.

HONG KONG, China (AP) -- A majority foreign-owned North Korean bank has threatened legal action if money it holds in a Macau bank is transferred to China, a report said Tuesday.

Such a move threatens to derail a U.S.-North Korean deal that was crucial in getting the North to agree to start shutting down its nuclear program.

Meanwhile, a senior U.S. Treasury Department official has met with North Korean officials to try to resolve the financial dispute, his spokeswoman said Tuesday.

Daniel Glaser, deputy assistant secretary for terrorist financing and financial crimes, met with officials from the North Korean embassy in Beijing on Monday, his spokeswoman Molly Millerwise said.

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

The fund transfer was supposed to occur last week but was delayed for reasons that haven't been fully explained.

On Tuesday, the International Herald Tribune reported that a British businessman, Colin McAskill, has threatened legal action by the Pyongyang-based Daedong Credit Bank if $7 million of the funds is moved to the Bank of China account. McAskill has agreed to buy Daedong Credit Bank, which is majority foreign-owned, and is representing it in discussions with Macau authorities, the report said.

McAskill told The Associated Press that the report was accurate but declined to comment further on the record.

The $25 million was frozen in September 2005 after the U.S. accused the Macau bank, 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.

But McAskill said the $7 million that belongs to Daedong Credit Bank was earned from legitimate joint ventures between foreign companies and North Korea, the report said.

"Daedong's money must be separated from the political arena," it quoted him as saying. "We wish to leave the money in Macau until we can make arrangements to transfer it to one of our normal correspondent banks."

The U.S. has decided to cut off Banco Delta Asia from the American financial system. Once this becomes effective in mid April, it will be difficult for the Macau lender to move money out of U.S. currency accounts because most U.S. dollar transfers are processed in the U.S., the report said.

McAskill said Daedong Credit Bank wanted to beat the deadline by getting permission to move its money to a temporary account in another Macau bank, the report said.

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