China confirmed U.S.'s concerns over NKorea's money laundering cases

China has responded positively to U.S. concerns over North Korea's alleged money laundering and counterfeiting of U.S. dollars, an American Treasury Department official said Friday. Stuart Levey, the Treasury's top officer for terrorism and financial crimes, didn't say whether Beijing had made any concrete commitments.

Yet China's support could be crucial for U.S. efforts to isolate and block alleged illegal financial activity by North Korea that is believed to aid its production and export of weapons of mass destruction.

"It is clear there is a shared understanding of how seriously we take such threats," Levey told reporters following his meetings with officials from six different Chinese finance and political departments.

"It was a very encouraging response," Levey said.

China, North Korea's biggest political ally and source of food and fuel, has been reluctant to impose coercive measures on the North.

Instead, Beijing has sponsored six-nation talks on the North's nuclear program that have produced halting progress toward lowering tensions on the Korean Peninsula. The talks also include the U.S., South Korea, Japan and Russia.

China's President Hu Jintao was in Pyongyang on Friday and met North Korean leader Kim Jong Il amid plans to resume the nuclear talks in November.

Levey's visit to Beijing follows the Treasury Department's designation last week of eight North Korean companies believed to be overseas fronts for Pyongyang's sale of missiles and nuclear and biological weapons. The order prohibits transactions between the companies and U.S. citizens and freezes any assets they may have under U.S. jurisdiction.

Levey said there was also evidence that Pyongyang had recently been producing high quality counterfeit currency known as "super notes," but declined to discuss evidence.

Washington also accuses Pyongyang of laundering money overseas. Last month, it placed Macau-based Banco Delta Asia on a money-laundering blacklist, saying its North Korean clients were involved in smuggling and counterfeiting.

The step is a prelude to cutting off its access to the U.S. financial system, but Levey said the department had yet to decide what further steps to take.

The bank denies the allegations, saying its business with North Korean companies was entirely legitimate and well known to regulators.

Levey declined to comment on a media report that a major Chinese bank, the Bank of China, was under investigation for similar dealings with North Korea, according to the AP.

The North's hardline communist regime responds furiously to all such accusations, dismissing them as U.S. fabrications to justify what Pyongyang calls Washington's "hostile policy" toward it.

T.E.