Ernst & Young says Macao-based BDA clean, cites minor faults
18/04/2007 12:16 HONGKONG, April 18 (RIA Novosti) - Ernst & Young Global found no major violations in the operations of Banco Delta Asia (BDA), accused by Washington of assisting North Korea in money laundering and counterfeit dollar distribution, a local paper said.
South China Morning Post said Wednesday the auditor's report was filed in December 2005 on the request of the Macao administration in China, but local authorities refused to make it public. BDA is a Macao-based bank, owned by the Delta Asia Financial Group.
Ernst & Young refuted allegations lodged by the U.S. Treasury, and said in its report that all the U.S. dollars coming from North Korea had been checked by the Hong Kong branch of one of the world's leading banks. Previous reports said it was HSBC.
As for money laundering allegations, the U.K.-based auditor came to no clear conclusion, but said BDA did not operate any strict procedures to counter money laundering or collect sufficient information about its clients and deals.
The report said BDA continued to accept cash from North Korea after financial authorities in Macao warned the bank that such operations were "suspicious." Ernst & Young said deals with North Korea made up 7% of BDA operations in 2002-05.
BDA has filed a suit with an American court against the U.S. Treasury's decision to put the bank on the black list from April 18 under the Patriot Act. BDA enclosed the Ernst & Young report into the case documents saying the U.S. decision was politically motivated and part of a dispute between the U.S. and North Korea.
In September 2005, 52 North Korean accounts worth $25 million were frozen in BDA on Washington's request. In March 2007, the sanctions were lifted but U.S. financial institutions were banned from further deals with the Macao-based bank. The U.S. has failed to provide any evidence of North Korea's violations in the bank.
Pyongyang has made no withdrawals from the bank. Under a February agreement between the six nations negotiating North Korea's nuclear program, the North was to seal its Yongbyon reactor Saturday but did not. South Korea and the U.S. agreed to give the country a few more days, South Korea's Yonhap news agency said Tuesday.
U.S. satellite photos reflected Tuesday "unusual activity" around the reactor. After seeing the shots, South Korea shared U.S. conclusions that this could testify to North Korea's intention to close down Yongbyon.
The six-nation talks launched in 2003 involve Russia, the U.S., North and South Korea, China and Japan.
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