PYONGYANG: North Korea has terminated diplomatic ties with Malaysia over its decision to extradite a North Korean suspect to the United States.

North Korea's Foreign Ministry said the money laundering charges against the man are an "absurd fabrication and sheer plot" orchestrated by "the principal enemy of our state.

The statement said Malaysia "committed super-large hostile act in subservience to the U.S. pressure" and the United States will "pay a due price.

Malaysia has long been a crucial economic hub for North Korea, handling trade, labor exports and some illicit businesses in Southeast Asia.

Cutting diplomatic ties would require each country to formally shut down their embassies, withdraw diplomats and liquidate local property.