Home » all category posts » Asia » Asia: NE & Koreas

Bank accused of aiding N. Korea will return to owner

Tim Johnson | Beijing | Sept 30

McClatchy - A tiny bank in Macau that was at the center of stalled talks over North Korea’s nuclear program will be quietly returned to its former owner Saturday, a move that seems to clear him of charges that he helped Pyongyang launder counterfeit U.S. cash.

In a one-paragraph statement, the government in Macau, a former Portuguese colony that's a burgeoning gambling haven, said Banco Delta Asia had shown “remarkable improvement” during two years of government oversight.

yeah, right ;)

It said that Stanley Au, a former gold dealer who ceded control of the bank in September 2005, would be put in charge of the bank again Saturday.

The bank issued a statement quoting Au saying that its return “reflected the exoneration of the bank and clearance of its name as well as its staff from taking part in any illicit activities.”

The return of the bank without any criminal charges is the latest strange twist in the saga of Banco Delta Asia. The family-owned bank was drawn into a political storm two years ago that led to the suspension of nuclear talks with North Korea, adding to the tensions that indirectly prompted Pyongyang to conduct a nuclear test 11 months ago.

U.S. Treasury Department officials claimed that the bank had for two decades abetted North Korean-linked companies and individuals engaged in crime, including drug trafficking and circulating sophisticated counterfeit U.S. bills.

As recently as last March 19, a Treasury Department ruling published in the Federal Register cited Au’s “potential for recidivism” in illegal activities in urging that Macau overseers remain in control of the bank, which has eight branches.

The Bush administration continues to list the bank as a “primary money laundering concern,” and the Treasury Department didn't immediately respond Friday to questions about why concerns over the bank’s alleged past activities may have dissipated.

When the Treasury Department first fingered the bank in 2005, Macau authorities froze some $25 million in North Korean-linked money in some 50 accounts.

In a complex, U.S.-brokered deal in June that was intended to get the nuclear talks back on track, the frozen assets reportedly were transferred to the New York Federal Reserve, then to the Russian central bank and finally to a private Russian bank where North Korea has an account.

Macau made no mention of past allegations in announcing the bank’s return to Au, saying only that its Monetary Authority would perform “supervisory duties to safeguard the interests of depositors and to maintain the stability of the financial system.

more


Tina September 30, 2007 - 2:51pm
printer friendly version | digg
( categories: AgonistWire | Asia: NE & Koreas | Asia: South-East | Global Politics and Culture )

Owner takes back reins at bank in N Korea funds row


Owner takes back reins at bank in N Korea funds row
Macau returns Banco Delta Asia to Stanley Au; US worried
Neil Gough
Sep 29, 2007

Macau will today return control of Banco Delta Asia, the troubled lender whose US$24 million in frozen funds caused a 21-month nuclear standoff between the US and North Korea, to its owner, Stanley Au Chong-kit.

A spokeswoman for the US consulate in Hong Kong expressed concern over the move, saying that two appeals filed in Washington by Mr Au and Banco Delta against a US Treasury Department decision to blacklist the bank as a "primary money-laundering concern" were recently rejected.

A Macau Government Information Bureau statement issued yesterday said the decision to return control of the bank, effective today, was taken "in view of the remarkable improvement made in the bank's management ... and the persistent requests of Mr Stanley Au for resumption of management control"

snip..............

Mr Au welcomed the Macau government's decision, but expressed concerns about assuming immediate control of the bank.

As a result of the Treasury action, the bank remains unable to offer US or Hong Kong dollar clearing services. For the past two years the Macau government has kept Banco Delta afloat by injecting liquidity to fend off bank runs. Deposits fell to US$205 million in July last year, from US$390 million immediately before the US Treasury announcement in September 2005.

"In view of the complicated technical procedures involved in the takeover of the bank and the many legal issues to be ironed out, the bank's lawyers are negotiating with the Macau government for a certain period of dual control in order to ensure the bank's stability and smooth operations after the takeover," Banco Delta said yesterday.

Mr Au said the US Treasury's decision to give in to Pyongyang's demands and release the frozen North Korean funds to the account holders exonerated the bank of any charges.

"If the account-holders in question were involved in illicit business transactions or money laundering as accused, then the money should have been confiscated," he said in the bank statement.

Money-go-round

September 2005

* US Treasury Department finds Banco Delta Asia is a "primary money laundering concern", and accuses it of handling illicit funds for North Korea.
* Within days of the announcement, customers line up outside the bank's branches in Macau and withdraw more than HK$300 million from their accounts.
* The Macau government appoints a three-man caretaker committee to run Banco Delta Asia. US$24 million in North Korea-linked funds held in accounts at the bank are frozen.

February 2006

* Banco Delta Asia announces it has cut all relations with North Korean account holders and hired accounting firm Deloitte Touche Tohmatsu to advise on anti-money-laundering policies and procedures.

February 2007

* North Korea signs a landmark agreement to move towards nuclear disarmament.

March 2007

* The US Treasury issues a final decision against Banco Delta Asia, upholding its original findings and formally cutting it off from doing business with US banks.

* Macau extends the term of the caretaker committee running Banco Delta Asia by another six months.

July 2007

* After months of negotiations, North Korea confirms receipt of the US$24 million which had been frozen at Banco Delta Asia.

Tina September 30, 2007 - 3:34pm
login to post comments

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.