Sunday, 20 May 2007

More Banco Delta Asia

A reader brought my attention to the following article on the Banco Delta Asia issue, and it is well worth five minutes to take a look. The writer is essentially reiterating much what I have been writing on the subject for months, but does it so much better!

For more insight on the BDA scandal visit

And just to show that I haven't “dropped the ball” on the subject, here is the transcript of my Friday report on Arirang Radio.

RH Transcript May 18 with Chris Gelken

DJ: An American newspaper has reported that a U.S. bank is considering stepping in and helping with the transfer of frozen North Korean funds from the Macau-based Banco Delta Asia. Joining us with more details is Chris Gelken from the Korea Herald.
Chris, this is obviously a welcome development – but I am almost too afraid to ask – is it a viable development?

CG: Oh that's the question everyone wants the answer to; can we really get past the funds issue and move on with the denuclearization process agreed to in Beijing back in February.
The Washington Post has quoted a spokeswoman at Wachovia Corporation as saying it has received a request from the State Department – that's the State Department, please note, not the Treasury Department – asking them to help with an inter-bank transfer of funds. The spokeswoman said the bank was discussing the matter with government officials.

DJ: It is interesting that the request would come from State and not, as one would have expected from Treasury who spent several weeks in Beijing trying to facilitate a transfer. Any clue on why Wachovia was selected?

CG: Well, the first thing that springs to mind is because all the others have refused. There is some history, however, Wachovia had been a U.S. correspondent bank for the Banco Delta Asia in the past. The spokeswoman said they take any request for assistance by the government very seriously and try to cooperate whenever possible. But she said the bank would not agree to any request without approval from U.S. financial regulators, so in the end I expect it will all go back to the Treasury Department.
Apparently, according to the report, the State department has reached out to a number of financial institutions but they have been unwilling to involve themselves with the BDA which is blacklisted by the Treasury Department.

DJ: Obviously the U.S. bank will be looking to ensure that there will be no repercussions from helping with the transfer.

CG: Absolutely, the bank's involvement would require some significant waivers from the Treasury department, including a guarantee that the bank will not be sanctioned for its transaction with the BDA. Insiders say, that Section 311 of the Patriot Act does not leave much room for waivers. So we could be looking at a long drawn out process here.

DJ: What has the State Department been saying about the request?

CG: Not surprisingly, they haven't been saying a great deal. Spokesman Sean McCormack declined to provide any details about Wachovia's possible involvement, nor would he comment on the report that State had been approaching other U.S. banks. He did say that everyone wants to see the BDA issue resolved within the laws and regulations of the United States as well as the international financial system.
He said the goal was to get back to the six party talks to denuclearize the Korean Peninsula rather than be tied down trying to resolve the problem of the tainted funds.

DJ: Obviously the Treasury is deeply interested in this issue, what have they had to say?

CG: Nothing. Well, not exactly nothing. They have deferred all questions to the State Department. A treasury spokeswoman said the request to Wachovia was initiated by the State Department, so you need to speak with them.

DJ: We have all been waiting a very long time to see a resolution to this issue, not least of which I imagine would be the other members of the six party negotiations. Has there been any reaction from them?

CG: Well as far as the Chinese are concerned, we are really no closer to a resolution. Speaking at a press conference today, Chinese Foreign Minister Yang Jiechi said the financial dispute that has stalled efforts to end North Korea's nuclear program remains unresolved despite promising signals. He added that the relevant parties are making every effort to seek a solution, and that they hope to see an early and proper settlement. Its interesting to note that his comments come after Pyongyang said on Tuesday that work was under way to settle the banking row, and of course those reports that State had contacted the Wachovia bank in the U.S. –
So once again we go into the weekend with the status quo pretty much unchanged, the funds are still there, the denuclearization process is still stalled, and the folks who most people see as holding the key to a resolution – the U.S. Treasury – are saying nothing.

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