[USFK Forums] U.S. Banks Are Warned on North Korea [AP]

[C. Y. Lee]

[Uploaded by C. Y. Lee on Thursday, December 15, 2005]
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U.S. Banks Are Warned on North Korea

By JEANNINE AVERSA, AP Economics Writer

Wed Dec 14, 9:44 AM ET

The Bush administration has issued a warning to U.S. banks that North Korea may try to use them to carry out illicit activities. The advisory from the Treasury Department's Financial Crimes Enforcement Network represents the latest effort by the United States to financially clamp down on North Korea.

"U.S. financial institutions should take reasonable steps to guard against the abuse of their financial services by North Korea, which may be seeking to establish new or exploit existing account relationships for the purpose of conducting illicit activities," according to the advisory, which was dated Tuesday.

The Financial Crimes Enforcement Network, known as FinCen, is responsible for making sure the U.S. financial system is not vulnerable to terrorist financiers, drug lords, money launderers and others engaged in financial crimes.

The Treasury Department has alleged that North Korea acting through government agencies and associated front companies is engaged in illicit activities.

"North Korean entities are known to have engaged in currency counterfeiting, narcotics trafficking, the production and dissemination of counterfeit cigarettes and the laundering of related proceeds, as well as weapons of mass destruction and missile proliferation," the advisory stated.

In September, the department took action against a bank Banco Delta Asia SARL in the Chinese enclave of Macau for what it said were lax money-laundering controls, alleging the bank helped North Korea distribute counterfeit currency and engage in other illicit activities.

At that time, the department designated Banco Delta Asia as a "primary money laundering concern," which alerts the global financial community about the alleged problems. The department also proposed that the bank be cut off from the U.S. financial system.

Against that backdrop, FinCen's advisory warns that North Korea "may be seeking banking services elsewhere" following the Treasury Department's designation of Banco Delta Asia as a primary money-laundering concern.

Banco Delta Asia has provided financial services for more than 20 years to North Korean government agencies and front companies alleged to have engaged in illicit activities, the FinCen advisory said.