Banco Delta Asia Barred from Business with US Financial Institutions

Due to the results of an 18-month investigation, the US Treasury Department recently announced that as of April 14, 2007 all US banks and financial institutions will be barred from doing business with Macau-based Banco Delta Asia (BDA). BDA was designated as an institution of “primary money laundering concern” regarding dealings with North Korean clients in 2005 and, subsequently, nearly $24 million in funds were frozen pending an investigation. These frozen funds have recently become an issue as North Korea has tied the release of these funds to their willingness to enter an agreement to halt its nuclear weapons program. The conclusion of the investigation resulting in the regulations against BDA will allow overseas regulators to possibly release some of the frozen funds.

The final rule affecting BDA falls under Section 311 of the US Patriot Act. The majority of US financial institutions have already voluntarily severed ties with BDA, however, they will now have to be more careful that other foreign clients are not being used to conduct business on BDA’s behalf.

Specific abuses by BDA include involvement with US counterfeit currency, counterfeit cigarettes and narcotics.

It is noted that Macau is not targeted as a jurisdiction of concern regarding money laundering, only BDA specifically as a financial institution.

Source:

• US Dept. of Treasury Web Site March 14, 2007