North seeks Russian or Italian home for its funds

Joon Ang Daily
Brian Lee
5/1/2007

Still seeking access to the international financial system, Pyongyang has asked Macao authorities to transfer $25 million in funds to unnamed banks in Russia and Italy, signaling some progress in the deadlock over money held in a Macao bank.

Chinese Deputy Foreign Minister Wu Dawei told Japanese lawmakers visiting Beijing that North Korea broached the idea, the Kyodo News Agency reported. Wu said that Macao authorities are trying to determine whether the move is possible.

South Korean government officials held out hope that the news could be a catalyst in finally resolving an issue that has been dragging on for weeks. “We are ready at anytime to move on; we are just waiting for the clouds to clear,” said one official. Italy was the first European country to open diplomatic ties with Pyongyang in 2000.

The dispute over the money led the North to miss the April 14 deadline for shutting down its main nuclear reactor.

In what was viewed as a major concession, Washington announced on April 10 that it supported measures by Macao to unblock the North Korean funds held in Banco Delta Asia. The U.S. had said the money was the result of illegal activities.

However, other than saying that it has taken notice of such measures, Pyongyang has delayed withdrawing the money. Instead, through state media, the North said it was looking to integrate itself into the international financial system rather than just retrieve the money.

With China and Macao entering the labor day holiday starting today, it could be a few days before any transfer takes place, the government official in Seoul conceded.

A source said that Pyongyang had also asked banks in Singapore, Vietnam and Mongolia to agree to a transfer but was rebuffed.

Washington has endorsed measures to unfreeze the funds, but it has not withdrawn its designation of Banco Delta Asia as a confirmed money launderer.

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