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Banco Delta Asia Info

Overview

With the release of North Korean funds from the Banco Delta Asia (BDA) bank in Macau and North Korea's invitation to IAEA inspectors, a major component of the BDA issue may have been resolved. However, since the transfer of assets took place in such an extraordinary and likely one-time-only fashion, the December 2005 Treasury Advisory warning US and other financial institutions to "guard against the abuse of their financial services by North Korea," DPRK access to international financial institutions will likely remain a contentious issue in the weeks and months to come. Read the NCNK issue brief on BDA here.

 

US Treasury Ruling

On March 14, 2007 the U.S. Department of Treasury issued a rule [big file, long download] barring Banco Delta Asia from "accessing the U.S. financial system, either directly or indirectly." In a press release, U.S. Under Secretary for Terrorism and Financial Intelligence Stuart Levy said "Banco Delta Asia's grossly inadequate due diligence and systematic facilitation of deceptive financial practices have run too deep for the bank to be allowed access to the U.S, financial system." Despite the rule, Macau authorities are now free to unfreeze DPRK accounts, according to comments made by Assistant Secretary of State Chris Hil (See End of Bank Probe to Smooth North Korea Progress: US, The New York Times, March 15).

In "China 'regrets' U.S. Bank Ruling," the BBC quotes China's foreign ministry spokesman Qin Gang as saying "We deeply regret the ruling by the United States." And a March 12, 2007 International Herald Tribune article by Donald Greenlees (Macao Inquiry clears bank of money-laundering" ), quoted an October 16, 2006 letter from the bank's lawyer, Joseph McLaughlin to the U.S. Department of Treasury: "'The bank paid insufficient attention to maintaining its own books. Consequently, money could have been laundered, but there is no specific evidence that the bank was aware that it was being used for this purpose, nor that it facilitated any criminal activities."

Assistant Secretary Hill tried to downplay possible negative effects on the upcoming nuclear weapons working group talks scheduled for March 17 ("U.S. Seeks to Bury Rift Before North Korea Talks", Reuters, March 16). U.S. Treasury Department officials will head out to both Beijing and Macau to explain the decision. The Financial Times reports that the DPRK is seeking assurances that the U.S. will not dissuade other banks from doing business with North Korea ("BDA Denies Wrongdoing on North Korean Funds"). "That assurance has not been made in public, but may be given in private," according to The Financial Times.

Last updated June 26, 2007