US: Bank Probe Unrelated to 6-Way Talks

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), currently visiting Korea, announced that its investigation of Banco Delta Asia (BDA) of Macao is not a sanction.

According to an official at the Ministry of Foreign Affairs and Trade, where the FinCEN had a working level meeting with officials of the Foreign Ministry, Unification Ministry and National Security Council yesterday, the enforcement team said that the U.S. action against the BDA has nothing to do with the six-party talks, and that it is purely a defensive law enforcement measure to protect U.S. financial institutions.

That statement in effect counters North Korea’s claim that it cannot participate in the six-party talks if the U.S. imposes a financial sanction.

At the meeting, the Korean government’s main interest was on the outcome of the U.S. enforcement team’s investigation in Macao and of the working level talks between the team and the Chinese authority. How much of the allegations on North Korea’s currency counterfeiting and money laundering have been proven and what the U.S. and China talked about will determine the fate of the six-party talks. At the end of the meeting, one Korean government official said that he did not get an impression that the U.S. is preparing additional measures.

However, he did not mention about the details of the discussion. He briefly announced a “fact” that the U.S. conveyed the gravity of the concern surrounding North Korea’s currency counterfeiting to high-ranking officials in Beijing and Macao and had a discussion with Macao’s financial authority, and he delivered the U.S. “evaluation” of its talks with China stating that it was productive.

It appears that detailed materials and explanations were presented regarding North Korea’s production and distribution of counterfeit currency. It is possible that the real samples of counterfeited 100-dollar bills were provided together with receipts of North Korea’s purchasing special ink and high quality photocopiers needed to counterfeit money.

Korea’s position on this problem has been that it needs concrete evidence to prove this allegation. “There were some meaningful references. We will consider what the U.S. said today in future evaluation and analysis,” said a Korean official after the meeting. It indicates that the Korean government has learned new information or new takes on the issue during the meeting.

It is reported that there was no mention of the six-party talks yesterday since the FinCEN is comprised only of experts on financial crime. Participants from the U.S. included Daniel Glaser, the Treasury Department’s Deputy Assistant Secretary for Terrorist Financing and Financial Crimes, and officials from the State Department and the U.S. Embassy in Korea.

Nevertheless, the team’s report on its visits in Korea, China, and Japan, which will be released after they return to Washington, is sure to be influenced by the six-party talks. The FinCEN met with officials at the Korea Financial Intelligence Unit attached to the Finance Ministry yesterday afternoon and will be leaving for Japan today.

Jong-Koo Yoon jkmas@donga.com