OSINFO - Open Sources Information

The Yomiuri Shimbun

North Korea used accounts opened at a Macau-based bank, allegedly linked to its illicit activities, to pay for purchases made in 2002 from Japanese companies supplying equipment that could be used to produce weapons of mass destruction, according to investigative sources.

In September, the U.S. government said Banco Delta Asia's accounts had been used as vital financial windows for North Korea's illegal counterfeiting and money laundering through forged U.S. currency. Under pressure from Washington, the bank froze the accounts in February.

The revelation is the first to detail the flow of illegal North Korean funds through BDA.

Pyongyang has demanded that Washington lift the freeze on the accounts, which shows frustrations suffered by the state in transferring funds gained through illegal means, coupled with its difficulties in settling bills for the purchase of weapons-related goods.

In September 2002, North Korea sent money from a BDA account to pay for the unlawful purchase, via Taiwan, of a freeze dryer that could be used develop biological weapons. The case came to light in August, the sources said.

In April 2003, an electric power supply unit that could be used to enrich uranium was illegally exported to North Korea via Thailand, a case that surfaced in November 2003.

According to police authorities, a corporation directly linked to North Korean leader Kim Jong Il, asked a 58-year-old former president of a Bunkyo Ward, Tokyo-based trading firm to ship a freeze dryer. On July 29, 2002, the North Korean company sent about 6.15 million yen from the BDA account to an account held by the trading house at a commercial bank.

In September 2002, 1.98 million yen was transmitted from a BDA account held by another North Korean company to an account opened by a trading firm in Ota Ward, Tokyo.

In April 2003, the Japanese company shipped an electric power unit to the North Korean corporation, according to the sources.

The company directly tied to Kim eventually sold the freeze dryer to a North Korean hospital suspected of studying biological weapons.

The power supply device was resold to another North Korean firm linked to Kim, the sources said.

Earlier, it was suspected that a BDA account worth about 24 million dollars, or 2.8 billion yen, had been used to buy luxuries for the North Korean leader and purchase goods used as gifts from him to high-ranking North Koran military officers before being frozen in February.

However, the latest revelation has shown the BDA account was used to pay for the purchase of weapons-related equipment from Japan, according to the sources.

Since the BDA accounts were frozen, the country has sought to open new accounts in countries including Mongolia, Russia and Vietnam.

During six-party talks that may resume by the end of the month, Pyongyang is expected to demand the freeze on those bank accounts be lifted.