$25 Million Going Back to Kim Jong-Il's North Korea

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April 10, 2007 3:39 PM

The United States has approved a bank's release of $25 million to the North Korean government it believes was a part of a broader criminal effort by that country that included counterfeiting U.S. currency and other illicit activities.
The move, apparently part of a broader negotiation to entice the North Korean government to curb its nuclear ambitions, comes less than a month after the U. S. Treasury Department slammed the Macau-based Banco Delta Asia for involvement in illicit activities on behalf of the North Korean government.
A recent Treasury investigation found the money held by the controversial bank was tied to illicit activities by North Korea, including the counterfeiting of U.S. currency. But in a statement released today, the Treasury Department said, "Based on previous discussions with Chinese, Macanese, and DPRK (Democratic People's Republic of Korea) officials, as well as understandings reached with the DPRK on the use of these funds, the United States would support a decision by the Macau authorities to unblock the accounts in question."

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Treasury officials said they endorsed the move today by Macau authorities to order the release of the $25 million dollars from the the bank. The frozen funds were the key sticking point in getting North Korea to implement a recent agreement to shut down its nuclear activities. U.S. negotiators say they hope the return of the money will persuade North Korea to meet a Saturday deadline to shut down its nuclear reactor in Yongbyon.
Just last month, the Treasury Department announced it would block U.S. firms from doing business with Banco Delta Asia because of "the gamut of illicit activities the bank has facilitated on behalf of North Korean-related activities." According to Stuart Levey, Under Secretary for Terrorism and Financial Intelligence, many North Korean account holders "had connections to entities involved in North Korea's trade in counterfeit U.S. currency, counterfeit cigarettes, and narcotics."
The U.S. government's efforts to facilitate the release of the frozen North Korean funds has been sharply criticized by U.S. Representative Ed Royce (R-CA). Royce, a senior Member of the House Foreign Affairs and Financial Services Committee said, "Pyongyang shouldn't be handed back $25 million - much of it criminally gained, including counterfeiting U.S. currency - in exchange for a North Korean pledge that it will be used for humanitarian purposes. This is a regime that has shown zero respect for the plight of North Koreans. I'm wondering what mechanisms are in place to ensure that $25 million isn't just going back in Kim Jong-Il's pocket?"