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Room 39 is one of the most secret organizations in arguably the world's most secretive state. Its mission: Obtain foreign currency for the regime of North Korea's authoritarian leader Kim Jong Il.

As the United States weighs independent sanctions against Pyongyang for its recent nuclear test and missile launches, the activities fostered by Room 39 are likely to face closer scrutiny.t

The powerful entity, which has existed for decades, is believed to raise funds through business ventures -- some legitimate and some not -- that include counterfeiting and drug-smuggling. The money, according to experts who follow North Korea's inner workings, is used by Kim mainly to buy the loyalty of high-ranking officials in North Korea and maintain control of the country.

A newspaper report in Seoul on Wednesday said South Korea has given U.S. authorities information on 10 to 20 North Korean bank accounts in China and Switzerland that may be involved in counterfeiting, money laundering and other illegal transactions.

South Korea's National Intelligence Service spy agency, the Foreign Ministry and the Finance Ministry said they could not confirm the report in the Chosun Ilbo . Swiss Justice Ministry spokesman Folco Galli said he hadn't heard allegations about North Korean accounts in Switzerland.

A 2007 report published by the Millennium Project of the World Federation of United Nations Associations said North Korea makes an estimated $500 million to $1 billion annually from criminal enterprises. And a 2006 report by the Congressional Research Service estimated that at least $45 million in counterfeit currency of North Korean origin has been detected in circulation.

New U.N. sanctions presented in a draft resolution Wednesday would seek to curtail North Korea's financial dealings, freeze assets of North Korean companies and expand an arms embargo. The draft resolution also lays down conditions for searches of ships suspected of carrying arms or nuclear materials to the country.

The country's first nuclear test, conducted in 2006, resulted in earlier U.N. sanctions that remain in place.

In 2005, the U.S. imposed financial restrictions on Banco Delta Asia, a bank in the Chinese territory of Macau, over allegations it helped North Korea with money laundering and other illicit activities. The move effectively cut Pyongyang off from the global financial system, analysts say, because banks in other countries, including North Korean ally China, did not want to jeopardize access to the U.S. financial system.

The restrictions were lifted in 2007 to nudge North Korea back to stalled nuclear talks.

"New sanctions will be very, very effective and have a big impact on North Korea's secret funds," said Lim Eul-chul, a research professor at South Korea's Kyungnam University and an expert on North Korea, discussing possible U.S. moves to interfere with the North's finances.

He said money generated by Room 39 is a "very useful tool to control high-ranking officials in the party, the Cabinet and the military" through gifts such as luxury cars, for example.

Agreement is reached at U.N.

The United States, China and other key powers reached agreement Wednesday on a draft U.N. resolution that would condemn North Korea's May 25 nuclear test and subsequent missile launches and would impose additional military, financial and trade sanctions against the communist state. The draft was presented to the 15-nation Security Council for consideration. It is expected to be adopted by the full council as early as Friday.

The Washington Post