The North Korea financial sanctions debacle in a different decade

Gaddafi being killed, after he agreed to  decommission his nuclear program, definitely put the USA on the wrong side of the North Korea, which understandably cited the Libyan precedent as justification for why it could never, ever surrender its nuclear weapons.

The anti-North Korea financial sanctions are an exercise in nostalgia in the matter of policies, rhetoric, and even actors–and also a bitter reminder of two lost years of US DPRK policy, and the bomb they helped birth. North Korean financial sanctions is truly a matter of Same Sh*t Different Decade, recapitulating and hopefully improving on one of the biggest and at the same time unreported fiascos of American foreign policy: the 2005 attempt to achieve regime change on the cheap against North Korea through covert financial sanctions.  I think it’s a good time to lift up the curtain and look at what happened, what didn’t happen, and what was misreported the first time America took a financial swing at North Korea.

The U.S. Treasury Department’s FinCEN (Financial Crimes Enforcement Network) operation tracked and blocked drug cartels’ ongoing struggle to launder the immense ocean of cash sloshing out of their operations.  Then under Bush, Section 311 of the Patriot Act was generously reinterpreted to exploit its coercive potential by employing FinCEN money laundering investigations against disliked state actors like North Korea.  Somebody coined the term “financial waterboarding” to describe the borderline legality and extremity of the tactic. Aggressive North Korea regime change policies moved to the top of the agenda.

Ground Zero for the initiative was a small Macau bank, Banco Delta Asia, which had allowed North Korean entities to open some 50 accounts.  The U.S. Treasury Department designated BDA as an institution “of primary money-laundering concern” under Section 311, averring that it was suspected of laundering the infamous North Korean “supernotes”—a miraculous counterfeit of the US hundred-dollar note that was virtually indistinguishable from the real thing.  To “protect the U.S. financial system”, U.S. financial institutions were instructed not to have dealings with BDA.  Result: a run on the bank, and BDA went into receivership in the hands of the Macau financial authorities.

Mission accomplished, one might think.  … It turned out that BDA routinely sent all its cash deposits over to Hong Kong & Shanghai Bank in Hong Kong for vetting. … But that did not deter the Treasury Department, which ground on with the apparently bogus case.  … By the way, despite the US Treasury final rule, Banco Delta Asia is still in business.

[Read the full article in CounterPunch

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