North Korea selling gold; may have up to 2,000 tonnes

North Korea Sells Gold to Earn Currency

From Yomiuri Shimbun, Tokyo
Tuesday, December 26, 2006

http://www.yomiuri.co.jp/dy/world/20061226TDY01004.htm

Since the United States imposed financial sanctions against North Korea in September last year, Pyongyang started selling bullion on the international market as an alternative way to acquire foreign currencies, it was learned Monday.

Last September the U.S. government froze North Korea-related accounts at Macao-based Banco Delta Asia. Since then, Pyongyang reentered the London Bullion Market and has exported bullion worth about 28 million dollars, or 3.3 billion yen, to Thailand, sources said.

In addition to Banco Delta Asia, many North Korea-related accounts at other banks have been frozen, and Pyongyang now actively engages in the gold business to gain foreign currencies, the sources said.

Choson Central Bank, North Korea's central bank, which is authorized to issue currency, was relisted in the Good Delivery for the London Bullion Market on May 12. The Good Delivery is a list of countries and companies trading on the market. After examining the quality of gold, it lists countries and companies and is said to be one of most credible lists in gold trading.

The central bank once joined the London gold market in 1976. However, as it was determined not to have made any trades on the market, the bank was removed from the list in June 2004.

A spokesman for the market told The Yomiuri Shimbun that Choson Central Bank made the reentry, but did not disclose its trading volume.

According to the sources, North Korea exported 500 kilograms of bullion in April and 800 kilograms in May to Thailand, pocketing $28 million in foreign currencies.

In the previous five years, Thailand never imported gold from North Korea.

In North Korea, Workers' Party of Korea's Office 39 reportedly handles the country's gold trade. Office 39 reportedly manages slush funds for North Korean leader Kim Jong Il. According to Britain's Financial Times, North Korea sold large amounts of bullion to Banco Delta Asia until last year.

According to the South Korean Unification Ministry, North Korea has estimated gold reserves of 1,000 tons to 2,000 tons. Japan has had no bullion trade with North Korea since 1992.

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