Sunday, February 05, 2006

North Korea Looking For New Money Launderer

North Korea may be looking for banks to help it launder money and the United States is ready to take action if this happens, a senior U.S. Treasury Department official said. The Treasury accused Macao-based Banco Delta Asia SARL last fall of having laundered money for North Korea. In reaction, Pyongyang has refused to return to the six-party talks on its nuclear ambitions until Washington removes the financial sanctions.
"Just being logical about it, if Banco Delta Asia is not available, they are certainly likely to be looking for other financial institutions that they can either abuse unwillingly...or look for other partners that might engage with them willingly," Treasury Undersecretary for Terrorism and Financial Crimes Stuart Levey said in an interview with Kyodo News. "So we're watching very carefully, and if something were to occur we would take appropriate steps to counteract it," he said. Levey said there were two problems involving the Macao case -- the bank's awareness of its involvement and the lax controls of Macao authorities. "This bank...was being willingly used by North Korea to facilitate a wide range of illicit activity, from money laundering of drug proceeds, counterfeit cigarettes, even putting into circulation counterfeit U.S. currency," Levey said. "We also expressed concern about the relatively vulnerable system of anti-money-laundering controls that exist in Macao," he said. "The combination of having a financial institution that was in a relationship facilitating illicit activity for the government of North Korea and having that financial institution exist in a jurisdiction of lax controls posed a very substantial risk to the integrity of the financial system as a whole, and to the U.S. financial system in particular," Levey said. "So we felt it was appropriate to take this action." Noting that he has visited Macao and other parts of Asia over the issue, Levey said he had a "good" dialogue with Macao authorities. "They reacted positively in terms of indicating that they knew they needed to take action to strengthen this system, and so we hope that that is the direction they'll go," he said.