Thaw expected on N Korean funds frozen at Macau bank

PUBLISHED : Tuesday, 27 February, 2007, 12:00am
UPDATED : Tuesday, 27 February, 2007, 12:00am

Millions of dollars linked to North Korea could be unfrozen at a Macau bank within days, according to sources close to talks between Macau and US officials.

While some of the US$24 million frozen at Banco Delta Asia is expected to be kept on ice due to criminal concerns, a significant amount is expected to be released, sources said.

A US delegation headed by Deputy Assistant Treasury Secretary Daniel Glaser yesterday met officials from the Macau Monetary Authority to finalise investigations.

The US$24 million was frozen by the Macau government after the US Treasury Department described Banco Delta as a 'willing pawn' in three decades of state-sponsored criminal activity by North Korea.

Any move to free the funds will ease months of intense pressure on North Korea's international financial arrangements and regional traders doing business with Pyongyang. It will also help speed restructuring of the private family-held Banco Delta, now in the hands of government-appointed receivers. A sale of the bank is one of the options now being considered.

Western and Asian diplomats hope it will also encourage North Korea to meet its latest pledges to end its nuclear ambitions. The six-nation talks ended two weeks ago in Beijing with a fresh agreement - discussions aided by side agreements between Washington and Pyongyang for action over the freeze.

Mr Glaser returned to Hong Kong last night saying he expected progress soon following months of work that included scrutiny of an estimated 300,000 documents. 'All of this work has put us in a position where we can begin to take steps to resolve the BDA matter,' he said.

Mr Glaser refused to speculate on a timetable but said an earlier US pledge of action within 30 days did not need to be extended.

'We do intend to take steps to resolve the matter ... and to do it as soon as possible,' he said.

Mr Glaser sought to justify the freeze, saying: 'Everything we have seen throughout this investigation has confirmed and reinforced the [September 2005] concerns.'

He also praised Macau's anti-money laundering actions since the freeze, saying they had been 'responsible' in creating a tougher system and ending Banco Delta's long links to North Korea.

The chairman of Koryo Asia, a Hong Kong-based investment firm which owns 70 percent of Pyongyang-based Daedong Credit Bank, said he was watching Mr Glaser's mission closely.

'All my research shows that there is no legal basis for this money to be kept frozen and it must be lifted as soon as possible,' said Colin McAskill.

Daedong was reported to have lost access to funds in Banco Delta Asia when the US imposed restricitons on the Macau bank and Mr McAskill said he would be seeking fresh meetings in with monetary authorities in Macau this week.