meerkat1
08.09.05, 15:26
BEIJING (Reuters) - Bank of China and two banks based in Macau are under U.S.
scrutiny for possible connections to North Korea's illicit fund-raising
network, which Washington believes finances Pyongyang's nuclear program, The
Wall Street Journal said Thursday.
Spokesmen for the Bank of China and China's foreign ministry both said they
had no knowledge of the investigation but that China took money-laundering
seriously.
"The Bank of China has always paid close attention to anti-laundering efforts
to ensure the bank was operating according to relevant laws and regulations,"
bank spokesman Wang Zhaowen said in a statement.
The banks, which could face stiff sanctions, were caught up in a U.S.
operation to shut down lucrative North Korean enterprises producing
narcotics, counterfeit U.S. currency and fake cigarettes, the newspaper said.
According to the paper, law-enforcement officials from several countries had
described the wide-ranging U.S. operation, while several North Korean
defectors gave accounts of Pyongyang's financial network.
A spokesman for the Chinese foreign ministry, Qin Gang, said he did not know
the basis of the Journal's report.
Beijing had ratified international conventions against money laundering and
terrorism financing and had a serious attitude towards implementing them, Qin
told a news conference.
"The Chinese government attaches great emphasis to dealing a blow to money-
laundering, this serious criminal activity," he said.
Qin used the news conference to announce the resumption of six-party talks in
Beijing next Tuesday aimed at dismantling North Korea's nuclear weapons.
Going to market
The U.S. investigation comes as Bank of China gears up for an initial public
offering next year.
It recently hired Goldman Sachs Group Inc. (Research) to prepare the listing
and sold two 10 percent stakes, each worth $3.1 billion, to Singapore state
investment agency Temasek Holdings and to a consortium led by Royal Bank of
Scotland Group Plc.
Merrill Lynch & Co. and Hong Kong billionaire Li Ka-shing invested alongside
the Edinburgh-based bank.
One of the Macau lenders, Banco Delta Asia SARL, is controlled by Stanley Au,
a prominent figure in Hong Kong financial markets who is also a legislator in
Macau and serves as an adviser to the Chinese government.
The other bank, Seng Heng Bank Ltd., is controlled by billionaire gambling
mogul Stanley Ho, who started a casino in Pyongyang and has close ties to
Pyongyang and Beijing.
The Journal said executives at Banco Delta Asia had no comment. A spokesman
for Seng Heng Bank told the newspaper: "We have nothing to provide you. We
have no comment."
Banco Delta Asia SARL, a unit of Delta Asia Financial Group, has been under
scrutiny by the Secret Service and other U.S. agencies since a publicly
disclosed 1994 counterfeiting case by the Secret Service and Macau police
that led to the arrests of North Korean officials in Macau, the Journal said.
Banco Delta Asia is a top candidate for being placed on a Treasury Department
blacklist of entities allegedly involved in money laundering, people familiar
with the matter said. Inclusion on the blacklist, which could be proposed
shortly, could make it difficult for the bank to do business internationally.
The Secret Service, the Justice Department, Immigration and Customs
Enforcement and other U.S. agencies are investigating the banks as part of a
new initiative against nuclear proliferation that the White House unveiled in
June, the newspaper said.
