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US Treasury invokes section 311 against Bank of Dandong

As part of its continuing action against North Korea, the US Treasury has taken the unusual step of invoking section 311 USA PATRIOT Act to deny a Chinese bank access to the American financial system.
The US Department of the Treasury’s Financial Crimes Enforcement
Network (FinCEN) has labelled the Bank of Dandong, a Chinese bank
that it accuses of being a conduit for illicit North Korean
financial activity, as a foreign bank "of primary money
laundering concern" which must be isolated from the US financial
system. In addition, the Treasury’s Office of Foreign
Assets Control (OFAC) has blacklisted two Chinese individuals and
one Chinese company in response to North Korea’s development of
weapons of mass destruction and flouting of resolutions made by
the United Nations Security Council. This has been hailed as
'unprecedented' and, in some quarters, inflammatory, but the
Treasury has sanctioned a small Chinese bank in the past, namely
Banco Delta Asia of Macau, also using s311. The Treasury
accused it of being "a willing pawn for the North Korean
government to engage in corrupt financial activities through
Macau."
FinCEN is taking steps to prevent the Bank of Dandong from
helping North Korea with a Notice of Proposed Rulemaking it has
issued in line with s311. It is thereby proposing to
prohibit US financial institutions from maintaining correspondent
accounts for, or on behalf of, that bank. Under the proposed
rule, the relevant financial institutions are also to be required
to apply "special due diligence" to their foreign correspondent
accounts that is reasonably designed to guard against their use
to process transactions involving the Bank of Dandong. FinCEN has
submitted the notice to the Federal Register, the US federal
gazette, with a 60-day comment period.
OFAC has sanctioned or 'designated' a Chinese citizen called Sun
Wei, whom it suspects of running a cover company on behalf of
FTB, North Korea’s primary foreign exchange bank that OFAC
sanctioned in 2013 for involvement in WMD proliferation. OFAC
also 'designated' Li Hong Ri, another alleged setter-up of front
companies. OFAC has, at the same time, sanctioned Dalian Global
Unity Shipping Co Ltd which, according to the United Nations, has
been actively involved in eight cases involving the smuggling of
luxury goods.