Bank of China says no comment on report of alleged illicit financial links to North Korea

  • Business
  • Thursday, 08 Sep 2005

SHANGHAI, China (AP) - The Bank of China declined to comment Thursday on a report it is being investigated by U.S. authorities for alleged connections to an illicit North Korean network believed to raise funds for Pyongyang's nuclear programme. 

The Asian Wall Street Journal reported Thursday that the state-run Bank of China and two banks based in the former Portuguese enclave of Macau were believed to have links to North Korean syndicates producing narcotics, counterfeit U.S. currency and fake cigarettes. 

"If the case was like what you said, I have to say I have no comment at present. We need to check into it and respond properly,'' said Wang Zhaowen, a Bank of China spokesman in Beijing. 

Clarina Man, a spokeswoman for Bank of China in Hong Kong, said: "We have no knowledge of any investigation. We have always attached great importance to anti-money laundering activities.'' 

Bank of China (Hong Kong) cooperates with efforts to combat illegal activities such as money laundering, Man said. 

The report appeared as officials were preparing to resume six-nation talks aimed at ending the North's nuclear weapons program. It said the U.S. Secret Service, Justice Department, Immigration and Customs Enforcement and other U.S. agencies were involved in the investigation. 

More than 80 people have been arrested in recent weeks, and large amounts of narcotics and cigarettes seized, the report said. 

It cited unnamed officials from several countries and interviews with North Korean defectors who it said outlined details of the North Korean operations. 

One of the Macau banks named in the report was the Banco Delta Asia SARL, which is controlled by tycoon Stanley Au, a legislator in Macau and adviser to the Chinese government. The other is the Seng Heng Bank Ltd., which is controlled by gambling mogul Stanley Ho, it said. 

The report said the main focus of the U.S. investigation is Zokwang Trading Co., a North Korean-run firm in Macau, a gambling enclave of some 450,000 people long considered a major center for money laundering. 

In the mid-1990s, some Zokwang officials were seized by Macau police and sent back to North Korea on suspicion of trying to use large numbers of counterfeit U.S. bills, some of which were traced back to Banco Delta Asia, the report said. 

Zokwang is also believed to have obtained parts for North Korea's weapons programs, it said. 

The Wall Street Journal said the recent crackdown was the result of more than three years spent studying the North's smuggling networks. 

It said it involved cooperation between police in South Korea, Japan and Taiwan and roughly 14 U.S. government agencies, including units of the State Department, Pentagon, Justice Department, and Department of Homeland Security, it said. 

U.S. authorities took action after some of those implicated in the probe tried to sell undercover agents mobile surface-to-air missiles that they feared could fall into terrorist hands, it said. 

The Bank of China plans an initial public offering on the Hong Kong Stock Exchange later this year or next year. - AP

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