Supernotes Scandal Heats Up

Sanctioning of Banco Delta, the hub of North Korean money laundering activities, has continued with little end in sight as the US continues to hold a hard line against NK's criminal actions. The Korea Exchange Bank, whose largest shareholder is an American corporation, broke off all dealings with Banco Delta in an effort to protect the banks investments. The pressure on BD has rendered it obsolete and the US is already warning NK about continuing their activities:

North Korea may be looking for banks to help it launder money and the United States is ready to take action if this happens, a senior U.S. Treasury Department official said Friday.

Shockingly, in an action contrary to all the signals that the S. Korean administration has been sending out, South Korean Ambassador to the US Lee Tae Sik criticized N Korea's actions:

"Such illicit activities are not acceptable," Lee said in a speech yesterday at a luncheon organized by the Korea Economic Institute in Washington. The North Koreans "should make their hands clean on this matter by unequivocally turning away from the illicit behavior once and for all."

Lee's comment is gutsy as it doesn't reflect recent South Korea policy on this issue. In fact, it seems that S. Korea is coming down with a political multiple personality disorder.

North Korea did not let this all pass by without responding. NK fired off one of the strangest salvos I've seen in a while by attacking US foreign policy. NK not only claimed that the US was a major cause of nuclear proliferation around the world, but apparently the US is planning to attack China as well. Though these don't seem the most pertinent of attacks (in the case of China it is demonstrably false), they are not without reason. When taken in conjunction with recent attempts by NK to solicit Japanese help to convince the US to drop the sanctions, it becomes apparent that this is more an issue of desperate political jockying. And why? It is probably a safe bet that NK is trying to gain any foothold they can before talks with the US later this month. As of now, things have not been all too comfortable for NK on this issue. This, of course, may say something about firm negotiations with NK. just maybe.