North Korea selling off gold reserves

Korea Herald
12/27/2006

North Korea, desperate for foreign currency under U.S.-imposed sanctions, has started to sell its gold reserves on international markets, a Japanese newspaper said Tuesday.

The United States last year blacklisted a Pyongyang-linked bank in Macau, infuriating the communist regime which walked out of disarmament talks for 13 months during which it tested an atom bomb.

Since the US crackdown on the bank, North Korea has earned 28 million dollars in foreign cash by exporting gold to Thailand, which had not imported gold from Pyongyang for the previous five years, the Yomiuri Shimbun said.

North Korea exported 500 kilograms of bullion to Thailand in April and another 800 kilograms a month later, the conservative Japanese daily said without identifying its sources.

North Korea’s central bank, Choson Central Bank was also re-listed on May 12 for trading on the London Bullion Market, said the newspaper, quoting a spokesman for the London market.

The North Korean central bank, which can issue currency, joined the London gold market in 1976 but was de-listed in June 2004 due to inactive trading, the newspaper said.

The Yomiuri, citing South Korean data, said North Korea was estimated to have between 1,000 and 2,000 tons of gold reserves.

The United States blacklisted Macau’s Banco Delta Asia in September 2005, saying it suspected that 24 million dollars in North Korean accounts were linked to counterfeiting or money-laundering.

The accounts have been frozen and other Asian banks have taken similar moves.

The financial sanctions were a main topic during six-nation talks, aimed at persuading North Korea to end its nuclear program, which ended in deadlock last week in Beijing.

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One Response to “North Korea selling off gold reserves”

  1. […] What have we given up for those dubious benefits?  A chance to gain everything that Kim Jong Il will never give us, including a lasting peace, by ending Kim Jong Il’s misrule.  Treasury’s pressure on North Korea’s money laundering was reported to have “dealt a severe blow to [North Korea’s] economy,” “dried up its financial system,” “brought [its] foreign trade virtually to an end,” and had a “snowballing … avalanche effect” that created “huge pressure” on the regime.  The Banco Delta action and Treasury’s implicit threats to take similar actions elsewhere cost Kim Jong Il financial relationships not just in Macau, but in China, Japan, Singapore, Vietnam, and South Korea.  Eventually, Kim was forced to start selling off his gold reserves, and even reportedly confided in Chinese President Hu Jintao that he feared the collapse of his government.  Without question, that pressure was also our best hope of getting a disarmament deal on favorable and verifiable terms, if we’d only had the courage to insist on them. […]