Friday, October 23, 2020

U.S. Judge Orders Chinese Banks to Hand Over North Korea Records

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A U.S district judge has ordered three Chinese banks to comply with U.S. investigators’ demands that they hand over records connected to the alleged movement of tens of millions of dollars in violation of international sanctions on North Korea.

In a heavily redacted court opinion released by the U.S. Justice Department on Tuesday and dated March 18, Beryl Howell, Washington D.C.’s chief federal district judge, said the subpoenas were for records of dealings between a now-defunct Hong Kong-based front company and a North Korean state-run entity.

The publicly released court document did not name the banks, the Hong Kong company, or the North Korean entity. It said the front company was established by a North Korean national and a Chinese individual, who was also not named.

It said the Chinese government had ownership stakes in all three of the banks, the first two of which have branches in the United States.

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The subpoenas were issued in December 2017 as part of a U.S. investigation into violations of sanctions targeting North Korea’s nuclear weapons program, including money laundering and contravention of the U.S. Bank Secrecy Act.

According to the court document, the subpoenas demanded a wide range of bank records dating back to January 2012.

The document highlighted transactions totaling $105.34 million, including $45.78 million that went through a U.S. correspondent account of the first Chinese bank; $1.63 million that went through a correspondent bank account of the second bank, and $57.93 million that went through a U.S. correspondent account of the third.

The judge’s ruling said U.S. Justice Department officials visited China in April and August last year to discuss the failure of the banks to respond to the requests for evidence.

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The documents were not produced and in November, U.S. prosecutors filed a court motion seeking to compel the banks to comply.

Judge Howell ordered the first two banks to produce the records promptly or testify before a grand jury. She ordered the third bank to produce the subpoenaed records by March 28. It was not clear how or if the banks responded.

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