With a Pyongyang-based address, DCB Finance Ltd. Was registered in the British Virgin Islands (BVI) in 2006, and leaked papers show that the Panama firm, Mossack Fonseca, legally incorporated the company, media reports said.

The same year saw North Korea conduct its first nuclear test, triggering the first of numerous US Security Council resolutions imposing sanctions on Pyongyang. DCB Finance Ltd was registered by North Korean official Kim Chol-Sam and Nigel Cowie, a British banker who had moved to North Korea in 1995 and went on to head its first foreign bank, Daedong Credit Bank -- of which DCB Finance was an offshoot.

Leaked papers suggest that, despite the Pyongyang address, Mossack Fonseca failed to notice DCB's link with North Korea until the BVI's Financial Investigation Agency sent it a letter in 2010 asking for details of the company.

It was only then that the law firm resigned as DCB's agent. The following year Cowie, who says he was unaware of any unlawful transactions, sold the share he had brought in Daedong Credit Bank to a Chinese consortium.

Both the bank and DCB -- as well as official Kim Chol-Sam -- were targeted by US sanctions in June, 2013 on the grounds that they had, since 2006, provided financial services to two North Korean entities with a "central role" in developing the North's nuclear and ballistic missile programmes.

The US Treasury said DCB Finance had been used to "carry out international financial transactions as a means to avoid scrutiny by financial institutions avoiding business with North Korea."

A leaked e-mail from Mossack Fonseca's compliance department in August 2013 appeared to acknowledge a lack of due diligence on the part of the law firm.

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