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Treasury

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I inquired to Treasury concerning the fate of the petition to Treasury by Banco Delta Asia’s parent group to rescind the final rule directing U.S. financial institutions not to do business with BDA. In its final rule, Treasury had advised that it didn’t matter how BDA tweaked its operations as long as Stanley Au remained... Read More
McClatchy did a big feature on the little bank in Macau, Banco Delta Asia. Stanley Au, the bank’s principal stockholder, is adamant about getting his bank back. The US Treasury is resisting, not a surprise, since the bank’s “potential for recidivism” under Au’s leadership was the rather lame justification for not giving Banco Delta Asia... Read More
A relatively obscure advisory on the Department of the Treasury website offers evidence of the hardliners’ determination to implement a financial blockade of North Korea in 2005-2006. On December 13,2005, two months after the Patriot Act Section 311 investigation against BDA was announced, Treasury issued an advisory entitled Guidance to Financial Institutions on the Provision... Read More
North Korea hardliners are attempting some pushback on the reported deal that will utilize the Federal Reserve and a Russian bank to electronically remit $25 million in funds frozen at Banco Delta Asia to a North Korean bank account. As Reuters reports, a group of GOP congresspeople have written the General Accountability Office to request... Read More
With respect to the reports in the Wall Street Journal and the New York Times concerning the Russian bank/Federal Reserve Bank route to remitting the Banco Delta Asia funds to a North Korean account, my initial, jaundiced view was to take it as merely a piece of negative confirmation: that the efforts to obtain a... Read More
Via Arms Control Wonk , the Russians are also offering to step up and handle North Korea’s $25 million if... To me, this is no more—or less—than the Russians weighing in on the side of the State Department and pushing the Bush administration to override whatever objections raised by the Treasury Department and/or hardliners and... Read More
The Federal Reserve Board Debunks Allegations of Large Scale Laundering of North Korean Supernotes
In my previous post about alleged North Korean counterfeiting, I wrote that the U.S. Secret Service had reported that only $50 million in Supernotes had been seized over the last 15 years. This meager haul provides little evidentiary or logical support for the idea that North Korea was funding its current account deficit through counterfeiting.... Read More
As sharp-eyed read DJ pointed out, Bush admits that somebody “screwed up” on the North Korea funds transfer. Full text of the Kyodo News report : Presumably the people that “screwed it up” were in the State Department by being creatively vague in February about what “resolving” the BDA matter actually meant—so they could get... Read More
The Wu Yi/Hank Paulson photo-op a.k.a. the Strategic Economic Dialogue, has come to an end. Obviously, the purpose of a two-day meeting is not to negotiate—even if one counts Secretary Paulson jawboning Mdme. Wu over dinner about the merits of opening up China’s financial markets to his eager buddies on Wall Street. The meeting is... Read More
Nothing like a good conspiracy theory to liven up a dusty diplomatic and banking dispute. Via Onefreekorea , the March 19 Washington Times informs us that Congressman Ed Royce (whose positions closely follow those of the hardline crowd on North Korea) wrote a letter to Condoleezza Rice accusing the State Department of trying to “unravel”... Read More
From McClatchy’s article on the US-China strategic economic dialogue now going on in Washington, I learned that China’s immense foreign exchange reserves have earned the nickname "The Great Wall of Cash". In keeping with China Matters’ kneejerk tendency to question conventional wisdom and conceptual shortcuts, I was compelled to calculate how big a wall of... Read More
There are encouraging signs that the bizarre inability of the world’s only hyperpower to enable the remittance of $25 million to North Korea is attracting more and more skeptical interest. And there are signs that the hardliners are getting desperate. John Bolton has been summoned to muddy the waters with a conspiracy theory op-ed. Arms... Read More
Hardliners in the U.S. Government Struggle not to Accept the Consequences of the Failure of their North Korea Policy
China Matters goes meta, summarizing dozens of posts and tens of thousands of words written over the last six months to explain why Banco Delta Asia matters—and why the mainstream media should and actually might begin covering it critically and responsibly. As the Banco Delta Asia farce groans into its third month, it should be... Read More
The State Department Fights the Treasury Department to get the Banco Delta Asia Deal Unstuck
The Washington Post reports that Wachovia Bank is willing to handle the North Korean funds at Banco Delta Asia... ...if it gets the necessary blessing from its regulators a.k.a. the Treasury Department. Wachovia, by the way, is on the long list of US banks (two; the other was HSBC, according to the Financial Times) that... Read More
From Kevin Hall, Bank owner disputes money-laundering allegations, McClatchy Newspapers Washington Bureau, May 17, 2007: The full texts of the petition from Delta Asia Group and Stanley Au’s supporting personal statement to the U.S. Treasury Department requesting that its rule against Banco Delta Asia be rescinded, and an analysis of the key points involved, can... Read More
As sharp-eyed reader David pointed out, the owners of Banco Delta Asia group are petitioning the Treasury Department to rescind its final rule against BDA. In a China Matters exclusive, I’ve obtained and posted the files for Delta Asia Group’s petition and the personal statement of DAG’s largest shareholder, Stanley Au. Au’s petition, in particular,... Read More
Commenter David provides the link to a news report indicating that he was right and I was wrong in predicting whether or not a US bank would receive the BDA funds. Congrats Dave, and thanks. Looks like Washington blinked again and Pyongyang’s “dirty” money is headed for a US bank, rather than to South Korea.... Read More
...after this morning’s post, here’s confirmation that Seoul is impatient to cut the Gordian knot and resolve the BDA funds issue so it can get on with the business of rapprochement. Yes, it looks like South Korean expressions of frustration with the US strategy of ostracizing North Korea are becoming ever more explicit. First, the... Read More
There’s been a flurry of rumor and activity on the BDA front, with indications that the fat lady, if not ready to sing, is at least clearing her throat. Rumors are circulating that the $25 million in unfrozen but heretofore unremittable funds in Banco Delta Asia will be remitted to Russia...Italy...Singapore...Vietnam...and/or Mongolia. I also read... Read More
"Presumed guilty until proven guilty" makes for a quick and easy North Korea policy...but it's no substitute for global diplomacy David Asher’s testimony before a joint House subcommittee on April 18 provided considerable entertainment—inadvertent as well as intentional. It also revealed some things about North Korea, a lot about the Bush administration and David Asher--and... Read More
China Matters has had a good run of reporting and analysis particularly on North Korea and Banco Delta Asia and pats itself on the back for various feats of prescience: Concerning the implications of the BDA debacle for US efforts against Iran... China Matters, April 17: Financial Times, US under fire for anti-Iran tactics, by... Read More
Getting to the Bottom of the Treasury Department’s Economic Campaign Against North Korea
Thanks to Asad in the comments for bringing up the issue of parallel U.S. efforts to cut Iran off from the international financial system, using the same laws, arguments, and tactics as it has employed to confront North Korea. It's an important reminder that US North Korea policy has to be viewed through an Iranian... Read More
The neocons are emerging from their cubbyholes to defend their role in screwing up the Six Party Agreement. David Asher, whose ostentatious self-promotion as leader of the State Department’s anti-North Korean efforts I have previously critiqued, pontificated on the significance of the BDA case from his new perch at the Heritage Foundation. Yet for the... Read More
Update: The Washington Post’s Glenn Kessler weighs in with what I regard, in my dyspeptic mood, as an inevitable piece of behind-covering by Treasury officials trying to explain how they couldn’t move $25 million dollars in 12 days. Not much clarity here beyond an attempt to ascribe the inability to move $25 million to North... Read More
The countervailing duty (CVD) determination against China for subsidizing its paper industry points to the emergence of a new approach by the Bush administration. With the Democrats in control of Congress and political pressure from both sides of the aisle to “do something” in response to the ballooning trade deficit with China, the Bush administration... Read More
What’s Daniel Glaser up to? Eating crow, it looks like: For “negatively affected” read “fanatically pursued by the U.S. Treasury Department as part of its vendetta against North Korea, the Six-Party Agreement, and the State Department”. Daniel Glaser, Deputy Assistant Secretary for Terrorist Financing and Financial Crimes, is the money laundering guy under Stuart Levey... Read More
Even though John Bolton is gone, like Lord Voldemort he left part of himself in horcruxes scattered through the US government. With the realist takeover of the State Department and the exorcism of Bob Joseph, one of the last bastions of Boltonianism is Stuart Levey’s operation, the Office for Terrorism and Financial Intelligence at the... Read More
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