North Korea connected bank 'may face US lawsuit'

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The Macau bank that is allegedly linked to helping to process North Korean funds is likely to be sued by the US, according to report.

The US Department of Justice may file lawsuits against the major directors of Banco Delta Asia, which had been listed by the US Treasury as a "primary money laundering concern".

Sources from the US suggest that such "concern" might even be upgraded as a "money-laundering bank".

Meanwhile, sources from Macau shows that the US may unfreeze North Korean funds in due course, according to Macao Daily News report.

Earlier reports suggests that the Macau Government may hand over the administration of the bank to its owners on 28 March, but the potential US lawsuit may delay the handover.

Despite reports from the US that the Treasury Department found no evidence that the bank was involved in money-laundering, insiders told Macao Daily News that it is North Korea that verified certain transactions which made the US establish that Banco Delta Asia did involve in money-laundering activities.

The newspaper also claimed that the US would not penalise the bank too harshly, possibly in the form of a fine or a delayed sentence.

The focus tends to be restricted the the management of the bank, and it is estimated that the US legal action will not bring big impacts to Macau's banking and judiciary system, the paper also claimed.

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The Government has denied recent claims that it will not renew its administration over Banco Delta Asia due to end on the 28th.

Anselmo Teng, Director of the Macau Monetary Authority, called for a press conference "by surprise" to clarify earlier reports by the local media, according to Macao Daily News report.

In it he only said that the Government has consistently work with the US authorities to reach a solution for the Banco Delta Asia issue, and will announce the results "at an appropriate time".

He emphasised that when to announce "will be in the hands of the US".

Teng also pointed out that the allegations that US will file lawsuits against the bank's directors "come from US sources", and no official notifications have been received by the Macau Government. He also said that the Government will be "difficult to deal with the matter directly" even such lawsuits were indeed filed.

The primary concern for the Macau Government is to safeguard the stability of Macau's financial system and to protect the interests of bank savers.

The Government's administration over Banco Delta Asia will end on 28 March. Since the Government has only two years to administer a bank according to law, it will have to completely retreat from the bank by 28 September this year.

Teng refused to say what will happen after 28 September, but he pointed out that all loans given by the Government to the bank have been returned, and the financial situation of the bank is also stable, with profits recorded last year.

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[ggaaxx]

The US Treasury Department has finalised its rule against Banco Delta Asia in Macau, accusing it for willing "to turn a blind eye to illicit activity, notably by its North Korean-related clients".

Stuary Levey, Under Secretary for Terrorism and Financial Intelligence, further pointed out that the bank granted North Koreans access to its services "with little oversight or control" in exchange for a fee.

Further accusations by the US authorities against the bank include:

* Suppressing the identity and location of originators of transactions and arranging for funds transfers via third parties;
* Repeated bank transfers of large, round-figure sums both to and from accounts held at other banks that have no apparent licit purpose; and
* The routine use of cash couriers to move large amounts of currency, usually US dollars, in the absence of any credible explanation of the origin or purpose for the cash transactions.

Under the decisions, the US financial system will be barred from trading with the bank.

The Macau Monetary Authority issued a statement immediately afterwards, expressing "regret" over the US decision, whilst the Macau Government "will give formal response" later.

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Both the mainland Chinese and Macau governments expressed "deep regret" on the US Treasury Department's ruling over Macau's Banco Delta Asia.

The Ministry of Foreign Affairs said that the central government supports the Macau government to deal with the issue according to law, and pointed out that the resolution of Banco Delta Asia issue should benefit the six-party talks on the denuclearisation of the Korean Peninsula, and to safeguard to financial and social stability of Macau.

Meanwhile, the Macau Government statement pledged to continue to administer the bank, so that the interests of savers and the stability of Macau can be safeguarded.

Secretary for the Economy and Finance Tam Pak Yuen (譚伯源) also told local media that investigations conducted by auditors "did not find evidence" that the bank was conducting illegal activities.

Anselmo Teng (丁連星), Chairman of the Macau Monetary Authority, said that whether the alleged North Korean funds in the bank can be unfrozen will depend on the information available from the US authorities.

It is reported that the US claimed that an amount between USD8 to 12 million could be frozen from the bank, whilst North Korean officials stressed that it was USD25 million.

The Chairman of the Delta Asia Group Stanley Au Chung Kit (區宗傑), who was in Beijing yesterday in attending the Chinese People's Political Consultative Conference (CPPCC), said that he "had been patient (over the matter) for 18 months", and did not feel different on the US ruling.

Au said that he will hold a press conference today (16 March) to explain the matter.

Meanwhile, the bank operated as normal yesterday.

Ye Yixin (葉一新), Chairman of the Macau Banks Association, said that the US decision will not affect Macau's financial system.

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The Secretary for Economy and Finance, Mr Francis Tam Pak Yuen, today expressed his deep regret over the US Treasury Department designating Banco Delta Asia (”BDA”) as a financial institution that has laundered money.

He stressed that the Macao Government would continue to act accordingly in the interest of and to protect depositors.

When asked by reporters, Mr Tam said the Macao Government has confidence to maintain the banking market stability. He also revealed that, according to the investigative report by an independent auditor outside the Macao Monetary Authority of Macao, no evidence related with illegal activity has been found.

He said the Monetary Authority of Macao has done much over the past 18 months, such as strengthening the BDA’s internal management, establishing an office for financial information, which achieved recognition with the United States and international organisations.

Mr Tam said he believed the Monetary Authority of Macao would continue to closely monitor financial activities of banking unstitutions.

Source | Government Information Bureau

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Banco Delta Asia will appeal to the US Treasury Department over its ruling to ban all US financial institutions to trade with it.

Chairman of the Delta Asia Financial Group Stanley Au Chung Kit (區宗傑) insisted that his bank knows nothing about its clients using its services to conduct money-laundering activities.

Au also pointed out that the bank has already cancelled all North Korean accounts, and has no plans to conduct further business with them.

However, whether the funds will be released will be up to the Macau Government to decide.

He also pledged to defend his family business, which is now 72 years old, and believed that both central and Macau governments will find solutions for him.

Meanwhile, the US Treasury Department's Deputy Assistant Secretary for Terrorist Financing and Financial Crimes Daniel Glaser is coming to Macau to share with the authorities the intelligence they collected on the alleged illicit activities conducted by the bank.

The intelligence will help Macau authorities to consider whether they can unfreeze the North Korean assets at the bank, according to the BBC.

Glaser will also discuss with Macau officials measures on how to implement the US sanctions, and what measures the Macau Government and Banco Delta Asia have to take so that such sanctions could be withdrawn.

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