March 7, 2006
JS-4099

Treasury Officials Brief North Koreans on Actions to Stem
DPRK Illicit Financial Activity

New York, NEW YORK – The U.S. Department of the Treasury today briefed representatives of the Democratic Peoples Republic of Korea (DPRK) on the action taken against Banco Delta Asia (BDA) and measures to protect the U.S. financial system from illicit activities. Representatives from the State Department and the National Security Council also attended.

The briefing of North Korean officials focused on the Treasury's authorities to combat illicit finance and the tools we utilize to protect the U.S. financial system, and afforded a useful opportunity to clarify numerous issues. It specifically covered Treasury's designation of BDA in Macau as a "primary money laundering concern" under Section 311 of the USA PATRIOT Act. "BDA was designated because its facilitation of North Korean illicit financial activity presents an unacceptable risk to the U.S. financial system," said Daniel Glaser, the Treasury Deputy Assistant Secretary for Terrorist Financing and Financial Crimes.

Section 311 is a powerful tool that the U.S. uses to protect itself from corrupt finance threats worldwide. Treasury clarified that the Section 311 action against BDA was a regulatory measure to protect the U.S. financial system from abuse, and not a sanction on North Korea. Treasury further clarified that the designation of BDA was separate and unrelated to ongoing diplomatic negotiations of the Six Party Talks.

As described in the Treasury's formal notice in September, the designation of BDA was based primarily, but not exclusively, on BDA's extensive relationships with North Korean entities involved in illicit activities.

Since the Patriot Act was enacted in 2001, Treasury has designated nine financial institutions and three jurisdictions for their involvement in various types of money laundering activity, including the facilitation of narcotics trafficking, currency counterfeiting, organized crime and the financing of terrorist groups.

"The Treasury Department will continue to take action as necessary to protect against threats to our financial system and our institutions," Glaser concluded.