U.S. and Macau (2008)

The Department of the Treasury

March 6, 2008
HP-863

Prepared Remarks by Stuart A. Levey, Under Secretary for Terrorism and Financial Intelligence, Before the American Bar Association's 22nd Annual National Institute on White Collar Crime

Miami - It is truly an honor for me to be asked to address this audience which includes so many current and former colleagues and personal friends. Throughout my legal career, the ABA White Collar Crime Institute has been the key annual forum for prosecutors, defense lawyers and judges to share views about cutting edge issues in the field of white collar crime.

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That stop in Libya is one of approximately 75 foreign visits I have made in the past four years to more than 30 different countries -- from China to Latvia and from Russia to Vietnam. A large part of my job consists of building an international coalition of both governments and private sector financial institutions to fight various types of illicit activity in the global financial system. That coalition at first may seem like it consists of strange bedfellows -- it has been joined by many governments that are not necessarily allied with the United States politically. But whatever their political views, they typically want their financial sectors to prosper, and they therefore share a common interest with us in keeping them clean and untainted by illicit conduct.

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Targeted Measures Put to Use

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North Korea offers an example of how powerful targeted financial measures can be. Confronted with a range of North Korean-related illicit conduct from WMD and missile proliferation activities to the counterfeiting of US currency, we took two important public actions. First, we targeted a number of North Korean firms under our proliferation Executive order, E.O. 13382. That authority -- which the President signed in June 2005 and is modeled after our terrorism Executive order -- allows us to designate proliferators and their supporters, freezing any assets they have under U.S. jurisdiction and preventing U.S. persons from doing business with them. Second, we took a regulatory action under Section 311 of the USA PATRIOT Act to protect our financial system from abuse by Banco Delta Asia (BDA), a Macau-based bank that is a serious money-laundering concern and that also knowingly allowed its North Korean clients to use the bank to facilitate a range of illicit conduct and engage in deceptive financial practices.

The real impact has come from the information made public in conjunction with these actions. Many private financial institutions worldwide responded by terminating their business relationships not only with designated entities, but with North Korean clients altogether. They determined that the risks associated with this business far outweighed any benefit. The result has been North Korea's virtual isolation from the global financial system. That, in turn, put enormous pressure on the regime -- even the most reclusive government depends on access to the international financial system. This pressure provided the State Department a great deal of leverage in its diplomacy over the nuclear issue with North Korea.

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