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Financial Sanctions & North Korea: In Search of the Evidence of Currency Counterfeiting & Money Laundering Part II

Published online by Cambridge University Press:  07 May 2025

John McGlynn
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This is the second article by John McGlynn in a series that meticulously dissects US charges of North Korean criminality, notably the forgery of US currency and money laundering, the significance of the legal instruments it has imposed on North Korea through Banco Delta Asia, and the significance of US actions for the resolution of the interrelated issues of North Korean nuclear weapons and the normalization of US-North Korean relations.

Type
Research Article
Information
Asia-Pacific Journal , Volume 5 , Issue 7 , July 2007 , e5
Creative Commons
Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-No Derivatives licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
Copyright
Copyright © The Authors 2007

References

Notes:

1. Jay Solomon & Gregory L. White, “Russia to Move North Korea Funds — U.S. Hopes Resolution Resumes Stalled Talks On Nuclear Program,” The Wall Street Journal, June 11, 2007.

2. Since Chris Hill and his DPRK counterpart at the Six Party Talks, Kim Kye-Gwan, met in Berlin last January for closed-door talks approved by Condoleezza Rice and later blessed by President George Bush the proengagement faction has appeared to have the upper hand.

3. The Finding and the “Rulemaking” notice can be read at the website of the Financial Crimes Enforcement Network (FinCEN).

4. About FinCEN, Financial Crimes Enforcement Network website.

5. Secret Service History, United States Secret Service website.

6. As described in the Finding and the proposed Rule.

7. Final Rule, page 55214.

8. David Lague, “U.S. Negotiator Urges North Korea to End Standoff on Financial Curbs,” New York Times, December 22, 2006.

9. Los Angeles Times, November 2006.

10. Martin Hart-Landsberg and John Feffer, “Sanctions and the Road to War in Korea,” Japan Focus website, January 18, 2007

11. The Dong-A Ilbo, “U.S. Sanctions Hurting North: Expert,” January 4, 2007.

12. The Final Rule can also be found at FinCEN's website.

13. February 7, 2007 email from the US Treasury Department.

14. February 6, 2007 email from the US Treasury Department.

15. In the Matter of the Imposition of Special Measure Five Against Banco Delta Asia S.A.R.L, Petition of Mr. Stanley Au and Delta Asia Group (Holdings) Ltd. to Rescind Final Rule, May 3, 2007, Footnote 6.

16. Petition of Mr. Stanley Au and Delta Asia Group, page 4.

17. Raphael F. Perl and Dick K. Nanto, North Korean Counterfeiting of U.S. Currency, Congressional Research Service, March 22, 2006, p. 4, quoting May 23, 2003 Senate testimony by William Bach, Director of the Office of African, Asian and European Affairs in the Bureau for International Narcotics and Law Enforcement Affairs of the U.S. Department of State.

18. The communications with Treasury and the Secret Service took place by phone and email during February 7-9, 2007.

19. Raphael F. Perl and Dick K. Nanto, p. 8 and footnote 26.

20. Donald L. Glaser, Protecting United States Currency: The Case of North Korea, ICAS Spring Symposium, Institute for Corean-American Studies, May 22, 2006.

21. Final Rule, 12735.

22. Department of the Treasury, Revocation of Designation of Ukraine as Primary Money Laundering Concern, Federal Register/Vol. 68, No. 74/Thursday, April 17, 2003/Notices. See FinCEN's website.

23. CRS, 8.

24 Sheena E. Chestnut, The “Sopranos State”? North Korean Involvement in Criminal Activity and Implications for International Security, Honors Program for International Security Studies, Center for International Security and Cooperation, May 20, 2005.

25. The thesis advisors were former Secretary of Defense William Perry and Dr. Scott Sagan, authors of works on how the DPRK endangers US interests. “Inspiration” for the thesis was received from Dr. David Asher, the former Coordinator for the North Korea Working Group in the U.S. State Department (now with the Heritage Foundation).

26. Charles Wolf, Jr., “Tokyo's Leverage Over Pyongyang,” commentary originally appearing in the Asian Wall Street Journal, November 21, 2006, Rand Corporation.

27. The information about these banks be found at FinCEN's Regulatory Enforcement Actions website.

28. Christopher R. Hill, US State Department Assistant Secretary for East Asian and Pacific Affairs, “Recent Developments in U.S.-Democratic People's Republic of Korea Relations,” Statement before the US Senate Foreign Relations Committee, Subcommittee on East Asian and Pacific Affairs, July 20, 2006,

29. Donald Glaser, US Treasury Department Deputy Assistant Secretary for Terrorist Financing and Financial Crimes, “Protecting United States Currency: The Case of North Korea,” (transcript of remarks) Institute for Corean-American Studies Spring Symposium, May 22, 2006.

30. Sean McCormack, US State Department spokesperson, Daily Press Briefing at the US State Department, December 21, 2006.

31. Proposed Rule, Section II.4 in the “Rulemaking” notice (“The Effect of the Proposed Action on United States National Security and Foreign Policy”)

32. Joel Brinkley, U.S. Squeezes North Korea's Money Flow, New York Times, March 10, 2006.

33. “Protecting United States Currency: The Case of North Korea,” (transcript of remarks) Institute for Corean-American Studies Spring Symposium, May 22, 2006.

34. Josh Meyer, “Squeeze on North Korea's money supply yields results,” Los Angeles Times, November 2, 2006.

35. “U.S. Squeezes North Korea's Money Flow,” New York Times, March 10, 2006.

36. “Squeeze on North Korea's money supply yields results,” Los Angeles Times, November 2, 2006

37. Federal Register/Vol. 70, No. 181, September 20, 2005, Proposed Rules, 31 CFR Part 103 RIN 1506–A83, Financial Crimes Enforcement Network; Amendment to the Bank Secrecy Act Regulations—Imposition of Special Measure Against Banco Delta Asia SARL

38. Excerpts from the Federal Financial Institutions Examination Council's Bank Secrecy Act/Anti-Money Laundering Examination Manual - July 2006.

39. Hankyoreh, December 31, 2006

40. Remarks by Treasury Secretary Henry Paulson before the Council on Foreign Relations on the Treasury Department's role in national security, June 14, 2007.

41. The Use and Counterfeiting of United States Currency Abroad, a September 2006 report jointly prepared by the U.S. Treasury, the Federal Reserve, and the U.S. Secret Service. All three reports are available through the US Treasury Department's website. (scroll to the bottom of Treasury's press release to find the links to each report).

42. Ellen Nakashima and Matthew Vita, “Clinton Clears Aid Package For Colombia,” Washington Post, August 23, 2000.

43. The Use and Counterfeiting of United States Currency Abroad, ix.

44. Banco Delta Asia S.A.R.L., Report to The Administrative Committee (redacted), Ernst & Young, December 16, 2005, page 35.

45. The Use and Counterfeiting of United States Currency Abroad, 83.

46. Financial Action Task Force website.

47. Relation to the FATF, Asia/Pacific Group on Money Laundering website.

48. Joint Testimony by Daniel Glaser, Deputy Assistant Secretary for Terrorist Financing and Financial Crimes, and Adam J. Szubin, Director of the Office of Foreign Assets Control, before the Foreign Affairs Subcommittee on Terrorism, Nonproliferation, and Trade and the Financial Services Subcommittee on Domestic and International Monetary Policy, Trade, and Technology in the U.S. House of Representatives, April 18, 2007.

49. Bill Gertz, “U.S. seeks data on N. Korea centrifuges,” The Washington Times, June 3, 2007.