Analysis: China Freezes N. Korean Accounts
Council on Foreign Relations
July 26, 2006
Prepared by: Esther Pan
Following a U.S.-led crackdown on North Korea’s money laundering, the Bank of China has frozen millions of dollars of North Korean assets (FT) held in its Macau branch. The newly revealed move is surprising, since China had been reluctant to support U.S. and Japanese efforts (McClatchy) to impose UN Security Council sanctions on North Korea after Pyongyang’s July 4 missile tests.
The U.S. efforts have focused on Macau, where the Banco Delta Asia was accused by Washington of laundering counterfeit dollars for North Korea and blacklisted in September 2005 (CNN).
North Korea is reported to have perfected a highly sophisticated counterfeit $100 bill, known as the “supernote,” which is nearly impossible to tell from its legitimate counterpart (NYT Magazine). In addition to U.S. banknotes, Washington says Pyongyang also peddles counterfeit cigarettes and pharmaceuticals and runs an international drug trafficking operation, all of which bring in between $500 million and $1 billion per year in hard currency—money that goes straight to North Korean leader Kim Jong-Il. North Korea’s illegal financial activities are detailed in this Congressional Research Service report (PDF).
The sanctions are causing a bleak picture for Pyongyang on the money front. Japan is considering cutting cash remittances (CNSNews.com) to North Korea from ethnic Koreans in Japan, a move that follows Tokyo’s leadership in pushing through UN Security Council resolution 1695 condemning the July 4 missile tests.
Read the rest of this article on the cfr.org website.
Copyright 2006 by the Council on Foreign Relations. This material is republished on GlobalSecurity.org with specific permission from the cfr.org. Reprint and republication queries for this article should be directed to cfr.org.
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