Thursday, 12 April 2007

Uncertainty over release of BDA funds

The announcement by the Macau Monetary Authority that some $25 million in North Korean related funds held in the Banco Delta Asia would be released with immediate effect is being met with some skepticism by analysts who have been following the issue.
The United States is claiming that the financial dispute that has stalled North Korea's implementation of the Feb. 13 Beijing Agreement has been fully resolved, and there is now no obstacle to the North acting on its promise to shut down its nuclear programs.
But sources familiar with the so-called "technical issues" that have held up the transfer of funds from the BDA are not so confident. They have told The Korea Herald that while actual details are still scarce, getting the funds out of the BDA and out of Macau may not be quite as simple as Washington apparently considers it to be.
Questions remain, they say, about how North Korean customers of the BDA can actually transfer their balances out of the bank if the BDA remains cut off from the global financial system.
"The BDA's own U.S. dollar correspondent bank accounts were closed in 2005, which means they can't make dollar transfers or do foreign exchange deals with any other banks to convert dollars to other currencies," one source told The Korea Herald on condition on anonymity.
"As a consequence," the source said, "other banks around the world will be equally reluctant to receive transfers from the BDA while they remain blacklisted - just like the case of the Bank of China refusing to accept the funds."
The only possible alternative being offered at this point, some observers say, is to withdraw the money in cash and carry it away in suitcases. But they point out this is certainly not a normal or even desirable way of doing business.

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