Banco Delta Asia comes clean over purchase of gold from North Korea

Banco Delta Asia, labelled by the US Treasury as a "primary money laundering concern", has admitted that it purchased a large amount of gold from North Korea, one of its biggest exports.

Through its US lawyers Heller Ehrman, Delta Asia stated that it bought 9.2 tonnes of gold from North Korea in the three years to September 2005, selling it through Delta Asia Credit, its Hong Kong unit, and taking commission of $1.50 an ounce. The article said this raised $120 million for Pyongyang.

Delta Asia's Treasury filing also acknowledged that the bank had provided services to North Korea's Tanchon Commercial Bank, which had been blacklisted three months before by the US, deeming it the main North Korean financial agent for sales of conventional arms, ballistic missiles and related goods.

Delta Asia blames outdated technology for the oversight and for its inability to generate reports on unusual deposits and possible shortcomings in screening retail cash deposits for counterfeit currency. Ernst & Young, which reviewed the bank's operations last year, found that the bank paid insufficient attention to maintaining its own books and had identified a North Korea-related account that bank staff had missed during the original asset freeze.

Delta Asia's statement is an attempt to get the US Treasury to lift its labelling as a primary money laundering concern, which had caused other banks to break off commercial ties with Delta Asia, and had panicked customers.