Citing North Korean defectors and law enforcement officials from several countries, the report said BoC, Banco Delta Asia and Seng Heng Bank had been targeted as part of a new initiative to crack down on the financiers of the global nuclear trade, announced by President George W. Bush in June.

The report said Banco Delta, which is controlled by Hong Kong tycoon Stanley Au, had been under investigation since it was linked with Zokwang Trading, a Macau company run by North Koreans that was at the centre of a scandal in the mid-90s when two employees were caught trying to pass off counterfeit currency.

US investigators believe Zokwang, which is still in business, had also helped obtain parts for Pyongyang's nuclear programme, the report added.

Seng Heng is part-controlled by casino tycoon Stanley Ho, who is believed to have links with the Pyongyang government thanks to a casino he opened in a North Korean hotel, the report said.

It added that defectors had told investigators that the North's banks relied on BOC to make international transactions.

The report said US officials were frustrated at not being able to publicise their probe, which has been kept under wraps for fear of destabilising six-party talks, due to resume next week, aimed at dismantling the North's nuclear programme. related report
South Korea Says No Time Limit On Next Nuclear Talks
Seoul (AFP) Sep 07 - South Korean Foreign Minister Ban Ki-Moon said Wednesday six-nation nuclear disarmament talks on North Korea, due to reopen in Beijing next week, would be open-ended.

"With no ending date fixed in advance, the talks will continue as long as there are chances for making any progress," Ban told a weekly briefing.

He said his government would "do its utmost to help make substantive progress" at the new talks for which host China will "soon" fix an opening date. North Korea reportedly prefers September 13.

The comments came as the United States and North Korea, the two major players, were still at loggerheads over Pyongyang's demand for the right to peaceful nuclear activities, rejected by Washington.

"(North Korea) had built the nuclear power facilities for decades tightening its belts," Rodong Sinmun, the North's communist party newspaper, said in a commentary on Tuesday.

"It is unimaginable for (North Korea) to dismantle its independent nuclear power industry built with so much effort, yielding to outsiders' pressure, without getting any proposal for compensating for the loss of nuclear energy."

The fourth round of talks, which involve the two Koreas, the United States, China, Russia and Japan, broke off on August 7 for a three-week recess and were originally due to resume in the final week of August.

But the Stalinist North delayed the talks for another two weeks, announcing they would resume sometime in the week beginning September 12. It cited annual South Korea-US war games for the delay.

The nuclear standoff began in October 2002 when the United States accused North Korea of a secret uranium-enrichment program in violation of a 1994 arms control pact.

Pyongyang has denied the US charges but declared in February this year that it had already built nuclear bombs.

Since 2003, the six-nation talks have aimed to persuade North Korea to abandon its nuclear weapons in exchange for diplomatic and economic benefits as well as security guarantees.

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