Banco Delta Asia scores in the battle against FinCEN

Stanley Au’s Delta Asia Financial Group (Banco Delta Asia) has achieved a partial victory in its dispute against the U.S. Treasury Department of Financial Crimes Enforcement Network (FinCEN).
According to a report from local media outlet Jornal Tribuna de Macau, which cites a court decision from the U.S. District Court for the District of Columbia, the U.S. court approved a request by the Macau-based bank to access documents with “improperly withheld materials” and “confidential information” about the case.
The case led the U.S. government to impose sanctions on the bank from 2007 for allegedly supporting operations to finance North Korea’s nuclear program.
Additionally, the same court had rejected a request from the department that was pursuing an end to the legal dispute, which has been ongoing since 2007.
According to the decision, the U.S. court gave the bank permission to call upon several high-ranking officials from the U.S. administration to testify in the case. These officials were those involved in making the 2007 decision.
In September 2005 when the impending imposition of sanctions by the U.S. government was announced, the bank suffered following a mass bank run. This led the Macau government to replace the bank’s board with government appointees in an attempt to stabilize the institution.
As a result of the sanctions, several North Korean companies in Macau, which had accounts with the bank, had their accounts frozen.
A negotiation between the U.S. administration and the companies affected by the freezing of assets attempted to resolve the dispute in exchange for the disarming of North Korea’s nuclear arsenal.
An audit of the bank was ordered by the Macau government and assigned to U.K. accounting firm Ernst & Young, in early 2007. They found no evidence that the bank had facilitated money-laundering.
However, a few days later the U.S. Treasury Department ordered all American banks and companies to cut their commercial relations with Delta Asia Financial Group. This was after an 18-month investigation which concluded with then Under Secretary of the Treasury for Terrorism and Financial Intelligence Stuart Levey stating that the investigation had confirmed that the bank had a “willingness to turn a blind eye to illicit activity, notably by its North Korean-related client.”
Later that year, the Monetary Authority of Macao ended its intervention in the bank board and returned it to the ownership of Au. No criminal charges were ever filed in Macau over the alleged illicit activities of the institution. However, the bank continues to be blacklisted by U.S. authorities and is unable to perform transactions in U.S. currency.