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U.S. announces final rule enforcing N. Korea's blacklisting as 'primary money laundering concern'
The regulations, known as the "final rule," prohibit U.S. financial institutions from opening or maintaining correspondent accounts for North Korean banks and also require U.S. financial institutions to apply additional due diligence measures in order to prevent North Korean financial institutions from gaining improper indirect access to U.S. correspondent accounts. The rule was proposed in June when the Treasury designated the North as a "primary money laundering concern" engaged in illicit conduct, including using state-controlled financial institutions and front companies to engage in proliferation of weapons of mass destruction and ballistic missiles and to evade international sanctions. Adam J. Szubin, acting under secretary for terrorism and financial intelligence Adam J. Szubin, acting under secretary for terrorism and financial intelligence "North Korea continues to use front companies and agents to conduct illicit financial transactions — some of which support the proliferation of WMD and the development of ballistic missiles — and evade international sanctions," said Adam J. Szubin, acting under secretary for terrorism and financial intelligence, said in a statement. "Such funds have no place in any reputable financial system," he said. Though the North's financial institutions do not maintain correspondent accounts with U.S. financial institutions, the department said the North's government continues to use state-controlled financial institutions and front companies to "surreptitiously conduct illicit international financial transactions." The measure is similar to the 2005 blacklisting of Banco Delta Asia (BDA), a bank in Macau. The Treasury's designation of the bank as a primary money laundering concern not only froze North Korean money in the bank but also scared away other financial institutions from dealing with Pyongyang for fear they would also be blacklisted. The measure has been considered the most effective U.S. sanction on the North yet. But the restriction was later lifted as nuclear negotiations with Pyongyang made progress. Experts say that the latest designation could have a greater impact than the BDA sanctions because it designated the North as a whole as a money laundering concern, not just one bank as in the BDA case. Posted by: Steve White 2016-11-13 |
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