To evade being chased on the sources of its foreign exchange earnings by the United States, North Korea is known to prefer third country currencies like Hong Kong dollars and Japanese yen to American dollars as payments by foreign firms. Learning early last year that the US Central Intelligence Agency was tracking down on the sources of its revenues from weapon sales overseas, say reliable sources, North Korea has been asking foreign companies to settle their payments not in American dollars, but Hong Kong dollars, or Japanese yen. "I understand that in or around February last year the CIA forwarded to the Seoul government a report assessing the sources of North Korean revenues from selling weapons abroad," comments a source. America has been checking into major trade transactions made by the "rogue states" like North Korea and Iraq. It is much easier to track them down when they are done in American dollars, adds the source.

Hyundai Asan Co., the firm running the Mount Kumgang tourism project, settled in Hong Kong dollars, not US dollars, its payments to Pyongyang of licensing fees until October last year when it began to defer the payments. "The documents say the remittances were made in American dollars," said a head office executive of the Korea Foreign Exchange Bank, the main creditor bank of Asan. But a branch official of the bank, involved in the remittances, said, "The remittances have been made in Hong Kong dollars." Another bank executive explained, "The remittances were initially made in Swiss francs and Hong Kong dollars, but later entirely in Hong Kong dollars, based on requests made by the North." Asked why they are shown in American dollars in the related documents, the executive said, "I cannot disclose it because it's confidential."

It has also been learned that North Korea, from the outset, has received payment in third country currencies for missiles exported to some Middle Eastern countries, and those for drugs it smuggled into China and Japan, in a bid to avoid being traced by the United States. When such payments are made in American dollars, however, North Koreans have laundered them into third country currencies in Singapore or Macao before remitting them to Pyongyang, says a North Korean defector who used to work as a foreign exchange dealer in the North.

(Lee Kyo-kwan, haedang@chosun.com )