U.S. formally bars dealing with Macau's Banco Delta
14 Mar 2007 18:28:31 GMT Source: Reuters
(Recasts first paragraph, adds quotes and details) By Glenn Somerville WASHINGTON, March 14 (Reuters) - The U.S. Treasury Department on Wednesday formally barred American banks from dealing with a Macau bank linked with North Korea, an action that clears the way for North Korea to reclaim money frozen since 2005. Though Treasury made no mention of it, its long-awaited action against Banco Delta Asia, or BDA, is linked to negotiated efforts to persuade North Korea to back away from building up its nuclear program. North Korea had demanded the release of funds frozen at BDA as a condition of negotiations on its nuclear program that had taken place between it and the United States, China, South Korea, Japan and Russia. At a news conference, Treasury's under secretary for terrorism and financial intelligence Stuart Levey said an 18-month investigation confirmed BDA's "willingness to turn a blind eye to illicit activity, notably by its North Korea-related clients" and said that was why Treasury was taking action against BDA. "When it takes effect in 30 days, this action will prohibit all U.S. financial institutions from maintaining correspondent accounts for BDA (Banco Delta Asia) and prevents BDA from accessing the U.S. financial system, either directly or indirectly," Treasury said. Treasury said BDA had been under investigation because of charges it accepted proceeds from North Korea's counterfeiting, drug-smuggling and money-laundering operations. It said it would report its findings to Macau and said Macanese authorities has tightened their anti-money laundering regime. "Today's regulatory action is targeted at BDA as an institution, not Macau as a jurisdiction," Levey emphasized. In fact, the U.S. move will make it possible for Macau authorities to decide whether to release an estimated $8 million to $12 million in frozen accounts, which North Korea has been demanding as a condition of negotiations on its nuclear program, U.S. officials who had anticipated Treasury's action said previously. Levey declined to answer a reporter's question whether the $8 million to $12 million was an accurate estimate and said the disposition of the frozen funds "will be a Macanese decision." He also held out the possibility of scrapping the prohibition for U.S. banks against dealing with BDA if remedial steps were taken to change its business methods. "The Treasury would review and, if appropriate, rescind the rule if the concerns in it are appropriately addressed, including if BDA were to be brought under the long-term control of responsible management and ownership," Levey said.
