Banco Delta Asia, the Macao bank accused of laundering counterfeit and illegally earned money for Pyongyang, acted as a conduit for tens and possibly hundreds of millions of dollars in cash flows to and from North Korea last year, according to documents obtained by the Financial Times.
The documents, plus new revelations about gold sales through BDA, suggest the Macao bank was much more important to North Korea than realised. However, they also show that a lot of apparently legitimate trade was also conducted through BDA.
As the six-party talks on North Korea’s nuclear ambitions resume on Monday, the US will come under new pressure to show proof of the allegations it made in September last year, which led to the collapse of the multilateral negotiations.
BDA accounts with links to North Korea, containing about $24m, were frozen after US Treasury officials labelled the Macao bank a “primary money-laundering concern” in September 2005.
Almost a third of that – about $7m – was held in accounts used by the Pyongyang-based Daedong Credit Bank, a North Korean/foreign joint venture commercial bank taken over this year by a group of British bankers.
However, while the amount frozen in the accounts has been known for some time, the volume of cash going through BDA has never been clear.
According to detailed bank records obtained by the FT, Daedong transmitted $49.26m through BDA during the first nine months of last year, until the accounts were suspended.
Of Daedong’s $7m that was frozen, almost half belonged to the British American Tobacco/Taesong cigarette-making joint venture.
The documents show BAT sent $14.7m from its JV and its stand-alone account to banks including Citibank in Singapore and HSBC in Hong Kong. This included $2.3m in July and $2.9m in August.
BAT is “clearly” still concerned about the frozen cash, said Simon Millson, a BAT official, adding that the company was trying to get the money out.
If the Daedong accounts were to exemplify cash flows through BDA, the documents suggest much more money may have flowed through the Macao bank.
The new owners of Daedong, led by Colin McAskill, have sent the bank’s financial records – including details of remittances through BDA – to the US State and Treasury departments to show that all the Daedong money was legitimately earned.
However, Mr McAskill said the authorities did not appear to have acted on the information. “If they at least give us our money back, that’s a start. At least we will get an indication that they are aiming for a solution,” he said.
After 16 months of investigation, the Treasury has yet to present evidence. It has also stressed that the financial actions are entirely separate from the nuclear issue.