Panama Papers Point to N.Korea's Shady Western Banker

      April 06, 2016 10:02

      North Korea set up a paper company in the British Virgin Islands in 2006 to raise money for its nuclear weapons program, a massive leak of money-laundering papers from Panama reveals.

      Nigel Cowie

      The paper company was called DCB Finance and a British financier named Nigel Cowie played a key role in setting it up.

      The Guardian on Monday published the story based on files leaked from Panamanian law firm Mossack Fonseca. They show that clients included individuals and companies blacklisted by the U.S. Department of Commerce, including DCB Finance.

      DCB Finance was managed by Mossack Fonseca from its establishment until September 2010. The U.S. Department of Commerce blacklisted DCB in 2013 for involvement in North Korea's nuclear development program and trade in illegal weapons.

      North Korea conducted its first nuclear test in October 2006, and the leak shows that it raised funds in international markets with impunity for another seven years through DCB Finance.

      Cowie first went to North Korea in 1995 and apparently still lives there. He is thought to be fluent in Korean and Mandarin.

      According to the Guardian, he graduated from Edinburgh University and worked with HSBC in Hong Kong. He then moved to the North and became a key figure in the isolated country's financial industry.

      Cowie began working for Daedong Credit Bank and went on to become its CEO.

      He started off with only three staff in a shabby office in a Pyongyang hotel, but soon formed a consortium and acquired a 70-percent stake in Daedong Credit Bank.

      In the summer of 2006, Cowie registered DCB Finance as a subsidiary of Daedong Credit Bank with Kim Chol-sam, a North Korean official, as the co-head. But once DCB Finance was exposed, Cowie sold off his stake in Daedong Credit Bank to a Chinese consortium and stepped down in 2011.

      The U.S. Treasury said that since 2006 or earlier, "Daedong Credit Bank had used its front company, DCB Finance Limited, to carry out international financial transactions as a means to avoid scrutiny by financial institutions avoiding business with North Korea."

      Cowie was interviewed several times by foreign media in Pyongyang and said businesses in the North were excessively undervalued, touting himself as a supporter of North Korean industries and claiming that working in the North was a lot more fun than doing business in New York or Hong Kong.

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