Delta Asia Financial Group (; ) is a

Macau Macau or Macao is a special administrative regions of China, special administrative region of the People's Republic of China (PRC). With a population of about people and a land area of , it is the most List of countries and dependencies by p ...

-based bank owned by the Delta Asia Financial Group and founded in 1935 by Au Wing Ngok, father of Stanley Au, the current chairman and majority shareholder. It is the 10th largest bank in Macau with eight branches and 150 employees. In March 2007, the U.S. Treasury ordered U.S. companies and financial institutions to cut links with the bank on account of allegations concerning Banco Delta Asia's business with the government of

North Korea North Korea, officially the Democratic People's Republic of Korea (DPRK), is a country in East Asia. It constitutes the northern half of the Korea, Korean Peninsula and borders China and Russia to the north at the Yalu River, Yalu (Amnok) an ...

, which at that time kept $25 million at the bank in various accounts. The case is considered a notable use of Section 311 the USA Patriot Act to crack down on the use of the international financial system by " rogue states" and "

state sponsors of terrorism "State Sponsors of Terrorism" is a designation applied to countries that are alleged to have "repeatedly provided support for acts of international terrorism" per the United States Department of State. Inclusion on the list enables the United St ...

".Squeeze on Banco Delta Asia hit North Korea where it hurt – International Herald Tribune
/ref> Although virtually every bank in Macau handled North Korean funds, U.S. regulators singled out Banco Delta Asia because the shutdown of a smaller bank would create less financial disruption. North Korea was able to gain access to funds deposited at the bank by raising the issue with the United States at the

Six-party talks The six-party talks aimed to find a peaceful resolution to the security concerns as a result of the North Korean nuclear weapons program. There was a series of meetings with six participating states in Beijing: * China * Japan * North Korea ...

on nuclear weapons technology in Beijing. The sanctions are said to have intimidated other banks from doing business with North Korea and disrupted the country's system for transferring foreign exchange. Macau has responded by stepping up enforcement of anti money laundering laws.

North Korea and the Six-party talks

The bank has been accused of engaging in

money laundering Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...

and distribution of

superdollar A superdollar (also known as a superbill or supernote) is a very high quality counterfeit United States one hundred-dollar bill, alleged by the U.S. government to have been made by unknown organizations or governments. In 2011, government sources ...

s for the government of North Korea. In September 2005, the impending imposition of sanctions by the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

was announced, which triggered a massive

bank run A bank run or run on the bank occurs when many Client (business), clients withdraw their money from a bank, because they believe Bank failure, the bank may fail in the near future. In other words, it is when, in a fractional-reserve banking sys ...

. As a result, the Macau Government invoked a banking law to replace the bank's board by government appointees. As a result of this, several North Korean companies in Macau which had accounts with the bank, including Zokwang Trading, had their accounts frozen. However, the United States agreed to resolve the issue of frozen Banco Delta Asia bank accounts, if North Korea disarms its atomic arsenal. An audit by

Ernst & Young EY, previously known as Ernst & Young, is a multinational corporation, multinational professional services partnership, network based in London, United Kingdom. Along with Deloitte, KPMG and PwC, it is one of the Big Four accounting firms, Big F ...

commissioned by the Macau government found no evidence that the bank had facilitated money laundering. On March 14, 2007, the U.S. Treasury Department ordered all U.S. banks and companies to sever ties with Banco Delta Asia, following an 18-month investigation. U.S. Treasury Under-Secretary Stuart Levey stated that the investigation confirmed the bank's "willingness to turn a blind eye to illicit activity, notably by its North Korean-related client". A mini-

ensued, although only 10% of the bank's cash reserves were drawn out. In September 2007, the Monetary Authority of Macau ended its intervention and the bank was returned to management by owner Stanley Au. No criminal charges were ever filed in Macau. The bank remains blacklisted by the U.S. Treasury Department and is not authorized to conduct transactions in U.S. dollars.

Lifting of the sanctions

On August 11, 2020, the U.S. Treasury Department announced that it had decided to revoke its sanctions and restrictions against Banco Delta Asia. The sanctions were lifted without further litigation, or any admission of liability by any party, and Banco Delta Asia was left free to resume its US dollar business.

References

External links

Official website
{{Banks of Macau Banks of Macau North Korea–United States relations Banks established in 1935 Brands of Macau 1935 establishments in Macau