U.S. slap against bank stuns foreign business in N. Korea(choking foreign business links)

Kyodo News ^ | 09/19/05

[TigerLikesRooster]

Monday September 19, 7:00 PM

U.S. slap against bank stuns foreign business in N. Korea

(Kyodo) _ A U.S. Treasury condemnation of the bank through which North Korea does most transactions with foreign companies could set back foreign trade with a country just beginning to open its markets, business people said Monday.

The U.S. Department of the Treasury finding on Thursday that Macao-registered Banco Delta Asia SARL was a "primary money laundering concern" and proposal to ban U.S. financial institutions from doing business with it could freeze some U.S. dollar accounts or force foreign-North Korean transactions underground, they said.

Companies that work with North Korea and have U.S. banking relationships -- including any business in U.S. currency -- must send illegally large bundles of cash into the country or delay transactions until the Treasury Department changes its orders, said Roger Barrett, managing partner with Korea Business Consultants in Beijing.

He said two clients have already said their business had been frozen and that others may follow.

"People have to start carrying large amounts of cash on planes, cash that should go through a banking system," Barrett said. "What does it do for investor confidence? This is not a welcome development."

The U.S. Treasury report says Banco Delta Asia, which has worked with North Korean government agencies and companies for 20 years, is providing financial services for illegal activities, such as drug trafficking and counterfeit currency distribution.

It cites the U.S. government's Patriot Act in exposing the bank to help U.S. financial institutions.

"Banco Delta Asia has tailored its services to the needs and demands of the DPRK (North Korea) with little oversight or control," says the Treasury's online report. "The bank also handles the bulk of the DPRK's precious metal sales, and helps North Korean agents conduct surreptitious, multi-million dollar cash deposits and withdrawals."

One North Korean bank client distributed counterfeit money and smuggled tobacco, the report says. It says the bank also serviced the multi-million-dollar account of an internationally known drug trafficker.

Companies that work with North Korea in currency other than U.S. dollars should be safe, said Richard Haren, Australia-based technical director with Kumsan Joint Venture Ltd., which has mined gold in North Korea over the past five years.

He said Kumsan also exports directly to other countries, avoiding the bank. But it casts a shadow on the concept of business in North Korea in general, he said.

"I do not see this as a problem at all for our business, except that again it places a negative idea into a difficult marketplace," he said.

But Barrett said he had received a distress call Monday morning from a foreign client with money in the pipeline via the Banco Delta Asia.

"It's holding up serious business and trade," he said of the U.S. Treasury condemnation.

Prospects of missing money, government intervention and other business concerns in the slowly opening North Korean market have kept investment low despite the country's efforts to promote foreign investment since 1992 after the formerly supportive Soviet Union broke apart.

Banco Delta Asia, which has eight branches in Macau and a representative office in Japan, could not be reached for comment at several phone numbers in Macau and Hong Kong.

[TigerLikesRooster]

Well, there will be more measures like this coming if N. Korea stays the current course. They will also come against those who are trying to covering up for N. Korean regime.

[TigerLikesRooster]

Ping!

[nuconvert]

Bump

[SevenofNine]

I got question I wonder how much Chia Pet get on drug money I hear Chia Pet "get the cut"

[Judith Anne]

This is more like a well-deserved spanking, than a slap.

I wonder if ex-President Clinton had a fiduciary relationship with this bank in the past...