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 Macao Government invoked a banking law to replace the bank's board by government appointees. As a result of this, several North Korean companies in Macao which had accounts with the bank, including Zokwang Trading, had their accounts frozen. Kim Jong Nam, the eldest son of North Korea's leader Kim Jong Il, has lived in Macao since 2004, when the United States imposed sanctions on a bank in Macao for allegedly helping Pyongyang launder money. 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.
An audit by Ernst & Young commissioned by the Macao government found no evidence that the bank had facilitated money laundering.
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". A mini-bank run ensued, although only 10% of the bank's cash reserves was drawn out.
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 U.S. dollars.
Read more about this topic: Banco Delta Asia
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