WASHINGTON: Banks handling money for North Korea or Iran run the risk of some day being exposed to the same stigma associated with banks linked to Nazi Germany, a senior US government official said on Wednesday.
“You don’t want to be the one ten years from now who’s got (Korean leader) Kim Jong Il’s money,” Treasury Undersecretary for Terrorism and Financial Intelligence Stuart Levey said in an interview.
“(It’s) just like we saw during the (former US President Bill) Clinton administration when they exposed the Nazi banks,” Levey said. Swiss banks were embarrassed in 1997 by revelations that the German government had passed funds through the Swiss National Bank and other Swiss banks during World War II to finance the Nazi war effort.
“You don’t want to be on the wrong side of that. I think banks understand that. I just don’t know whether they are taking all the steps that they can and we would encourage them to do it,” he said.
Mr Levey directs Treasury efforts to stop funding for terrorism, weapons proliferation, and illicit activities that could undermine the financial system.
He said the US strategy of naming institutions and individuals it believes are helping finance illicit activity has been an effective upgrade of the traditional economic sanctions approach.
“What I think we’re likely to see and what I’m going to try to make happen is you’re going to see banks around the world — and you’re already seeing banks around the world — ask themselves the question, ‘Do I want to be Iran’s banker?’,” he said.
Levey said tackling Iran was the “big, looming challenge” in US efforts to dry up funding for terrorist activity worldwide.
“If you were to take all the money that terrorist organizations were able to raise, where’s it coming from? Well, first of all, number one on your list is going to be from the treasury of Iran,” Levey said.
The United States accuses Iran of arming and funding the militant religious political group Hezbollah which has been fighting Israel from Lebanon.
Washington is also part of international efforts to persuade Tehran to rein in its nuclear program, which the United States says is aimed at making nuclear weapons. Iran denies this, saying it is for producing nuclear energy.
Levey said efforts to isolate North Korea financially through targeted measures were working, and individual institutions were severing ties with accounts linked to North Korean entities.
The United States last September branded a Macau bank, Banco Delta Asia, as a conduit for counterfeiting and other illicit activities by North Korea.
That prompted other institutions to reconsider North Korea-linked accounts, and the state-owned Bank of China froze North Korea-related assets at its Macau branch, US officials have said.
North Korea withdrew from six-nation nuclear talks after the designation, but US officials say branding the bank was necessary to halt illicit actions and protect the US currency from counterfeiting and was separate from nuclear diplomacy.—Reuters
