Whoever [in the United States or in the special maritime and territorial jurisdiction of the United States] knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity, shall be punished as provided in subsection (b).
So here’s something I though I’d never see: U.S. government officials more-or-less openly engaging in a conspiracy that would land anyone else in a federal prison for international money laundering. Section 1957, which prohibits transactions in criminal derived property, is one of the two main statutes the feds use to prosecute money laundering. The other, section 1956, contains a list of “specified unlawful activities,” of which counterfeiting is one. All I can say is thank goodness for prosectuorial discretion:
After recent talks with the U.S. bankers in Hong Kong, Park, a former investment banker who heads the Korea Working Group at the U.S. Institute of Peace, an independent institution funded by the U.S. Congress, has gone public with the new proposal.
It would treat Banco Delta Asia or BDA as a “distressed bank,” enable Pyongyang to obtain its money, and make it possible for the U.S. investment bankers to purchase the BDA license, giving them a foothold in Macau’s fast-growing market, he said.
Separately, the State Department — in what would amount to another dramatic change on North Korea — signaled it would consider allowing North Korea to transfer the $25 million to an account in a U.S. bank. [Reuters, Carol Giacomo]
Yet this money is so tained that not even the Bank of China will touch it with the U.S. and Chinese governments’ reassurance and encouragement, and even the ownership of much of this money is still disputed or simply unknown. Or, as one “senior U.S. Official” put it last November, “It is all one big criminal enterprise. You can’t separate it out. If you prefer something written and on-record, start at page 14 of Treasury’s final report. Continuing with the Reuters piece:
“They’re still working with their bankers and if there’s any requirement for an opinion from the Treasury Department as to whether or not this is a transaction that the financial institutions involved would feel comfortable doing, then the Treasury Department will take a look at that and see what it is that they can do,” spokesman Sean McCormack told a news briefing on Wednesday.
The fact that our State Department is seriously considering this — as of last week, they were in New York with the North Koreans negotiating the terms day-by-day — is incomprehensible. When the February 13th Agreed Framework collapses (note that I didn’t say “if,” a prudent administration would seemingly try to preserve a Plan B to that it can re-apply pressure, and so that it can preserve the negotiating pressure we still have now. State’s plan seems to be predicated on throwing away as much negotiating pressure as it possibly can.
Last year, Treasury engaged in a highly effective campaign of shuttle diplomacy (second subheading) to put financial pressure on North Korea and send a message to other banks that might be tempted to handle criminal proceeds (knowingly or intentionally “handling criminal proceeds” turns out to be a reasonably good working definition of “money laundering”). After all we’ve yielded on UNSCR 1718, weapons sales, and now this astonishing act, it’s hard to see other nations taking such efforts seriously in the future. We’ve sacrificed plenty of important principles since February. To those, you can now add this retreat in our efforts to clean up the international financial system, efforts that are integral to our efforts to shut down terrorist financing.