Using the Patriot Act to Turn North Korea's Dirty Money into a Bargaining Chip

摘要

In the tumultuous aftermath of al-Qaeda's 11 September 2001 attacks on the United States, Congress passed the Uniting and Strengthening America by Providing Appropriate Tools to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act). This legislation contained provisions designed to enhance the U.S. Government's statutory authorities in five areas: domestic security, surveillance, money laundering, border security, and intelligence. A key component of Title III of the Act is section 311, 'Special Measures for Jurisdictions, Financial Institutions or International Transactions of Primary Money Laundering Concern.' Section 311 actions were taken against a bank located in China's Macau Special Administrative Region, Banco Delta Asia (BDA). The Monetary Authority of Macau, fearing that the section 311 designation would jeopardize its access to international financial markets, replaced the management of the bank and froze $25 million of tainted North Korean assets. This action highlighted the risk of handling North Korean money, causing global financial institutions to spurn North Korean financial transactions and creating an informal financial embargo of North Korea. The author argues that using section 311 simultaneously as a protective anti-money- laundering/counterterrorist financing (AML/CTF) tool and an active instrument of coercive diplomacy to 'persuade an opponent to stop and/or undo any action he is already embarked upon' presents significant practical challenges. North Korea is a uniquely vulnerable target because of the nature of its regime, its profound isolation, and its economic destitution. Section 311's role in coercing North Korea to modify its behavior may be more a case of strategic serendipity than the purposeful use of a new AML/CTF tool to achieve nonproliferation objectives. U.S. policy makers may have taken advantage of the unintended consequences of the initial BDA designation to achieve their nonproliferation goals vis-a-vis North Korea.