Banco Delta Asia

Banco Delta Asia (滙業銀行) is a Macau-based bank owned by the Delta Asia Financial Group and founded in 1935 by Au Wing Ngok, father of Stanley Au, the current chairman and majority shareholder. [ [http://www.delta-asia.com/eng/aboutus_gh.html Delta Asia Financial Group ] ] It the 10th largest bank in Macau with eight branches and 150 employees. [http://www.nytimes.com/2007/09/29/world/asia/29bank_web.html?ex=1348718400&en=e614e1ee340e9c06&ei=5124&partner=permalink&exprod=permalinkNo Blacklisted Bank to Return to Original Owner - New York Times ] ] [ [http://chinamatters.blogspot.com/2007/05/stanley-au-makes-his-case-for-banco.html China Matters: Stanley Au Makes His Case for Banco Delta Asia ] ]

In March 2007, the U.S. Treasury ordered U.S. companies and financial institutions to cut links with the bank on account of allegations concerning BDA's business with the government of North Korea, which at that time kept $25 million at the bank in various accounts. The case is considered a notable use of Section 311 the USA Patriot Act to crack down on the use of the international financial system by rogue states and state sponsors of terrorism. [ [http://ibdeditorial.com/IBDArticles.aspx?id=257558795390019 IBDeditorials.com: Editorials, Political Cartoons, and Polls from Investor's Business Daily - New Sanctions, Unlike The Old, Seem To Work ] ] [http://www.iht.com/articles/2007/01/18/news/north.php?page=1 Squeeze on Banco Delta Asia hit North Korea where it hurt - International Herald Tribune ] ]

Although virtually every bank in Macau handled North Korean funds, U.S. regulators focused on BDA because the shutdown of a smaller bank would create less financial disruption.http://www.nytimes.com/2007/04/13/world/asia/13macao.html?_r=5&ref=asia&pagewanted=all&oref=slogin&oref=slogin&oref=slogin&oref=slog&oref=login] North Korea was able to gain access to funds deposited at the bank by raising the issue with the United States at the Six Party Talks on nuclear weapons technology in Beijing. However, the bank remains under U.S. sanction and is therefore unable to conduct business in either U.S. dollars or in Hong Kong dollars. The sanctions are said to have intimidated other banks from doing business with North Korea and disrupted the country's system for transferring foreign exchange. Macau has responded by enacting a stronger anti money laundering law.

North Korea and Six-Party Talks

The bank has been accused of engaging in money laundering and distribution of superdollars for the government of North Korea. In September 2005, the impending imposition of sanctions by the United States was announced, which triggered a massive bank run. As a result, the Macau Government intervened, under the Macau banking law, and replaced the bank's board by government appointees. [cite web|url=http://www.thestandard.com.hk/news_detail.asp?we_cat=4&art_id=2338&sid=4782658&con_type=1&d_str=20050929|title=Banco Delta board yields control|publisher=The Standard|date=2005-09-29|accessdate=2007-03-20] [cite web|url=http://www.globalsecurity.org/security/library/news/2005/09/sec-050915-usia02.htm|title=U.S. Cites Banco Delta Asia for Money Laundering, Other Crimes|publisher=GlobalSecurity.org|date=2005-09-15|accessdate=2007-03-20] As a result of this, several North Korean companies in Macao which had accounts with the bank, including Zokwang Trading, had their accounts frozen. [cite web|url=http://article.joins.com/article/article.asp?ctg=10&Total_ID=2476538|title=北, BDA계좌동결 후 3개국서 계좌개설|publisher=Joongang Daily|date=2006-10-16|accessdate=2007-03-20|language=Korean] Kim Jong Nam, the eldest son of North Korean dictator Kim Jong Il, has lived in Macau since 2004, when the United States imposed sanctions on a bank in Macau for allegedly helping Pyongyang launder money. [cite web|url=http://www.newsmax.com/archives/articles/2007/2/4/211408.shtml?s=os|title=Kim Jong Il's Son Living In Macau|accessdate = 2007-02-05|publisher=NewsMax dot com|language=English] However, the United States agreed to resolve the issue of frozen North Korean bank accounts in Macau's Banco Delta Asia if North Korea disarms its atomic arsenal. [cite web|url=http://www.boston.com/news/world/asia/articles/2007/02/14/give_and_take/|title=Give and take|accessdate = 2007-02-14|publisher=Boston.com World News|language=English]

An audit by Ernst & Young commissioned by the Macau government found no evidence that the bank had facilitated money laundering.cite news| url=http://www.realcities.com/mld/krwashington/16812231.htm| date=2007-02-01| title=Accounting firm finds no evidence of money laundering| first=Kevin G.| last= Hall| publisher=McClatchy Newspapers| accessdate=2007-03-01]

On March 14, 2007, the U.S. Treasury Department ordered all U.S. banks and companies to sever ties with Banco Delta Asia, following an 18-month investigation. U.S. Treasury Under-Secretary Stuart Levey stated that the investigation confirmed the bank's "willingness to turn a blind eye to illicit activity, notably by its North Korean-related client".cite web|url=http://news.bbc.co.uk/2/hi/asia-pacific/6452857.stm|title=China 'regrets' US ruling on bank|publisher=BBC News|date=2007-03-15|accessdate=2007-03-16]

In September 2007, the Monetary Authority of Macao ended its intervention and the bank was returned to management by owner Stanley Au. No criminal charges were ever filed in Macau. The bank remains blacklisted by the U.S. Treasury Department and is not authorized to conduct transactions in either U.S. dollars or in Hong Kong dollars.

References

External links

* [http://www.delta-asia.com/macau/eng/index.asp Homepage]
* [http://www.guardian.co.uk/worldbriefing/story/0,,1922182,00.html#article_continue Patriot Act]