By Stephen Foley in New York
The Goldman Sachs banker-turned-Treasury Secretary, Hank Paulson, has been making presentations on Wall Street that might normally be expected more in the halls of the United Nations, setting out the links between financial institutions operating in rogue states and organised crime or terrorism.
The presentations have been remarkably successful at snipping the ties between rogue nations and the global financial markets, and are expected to be stepped up next year as the US confronts Iran over its nuclear programme and its alleged financing of terrorist groups.
“We are trying use the private sector’s natural inclinations to want to avoid bad conduct and make sure their reputations are clean,” said Treasury Undersecretary Stuart Levey.
“We want to figure out how to work with the private sector so they amplify what we want to have happen.”
Some two dozen financial institutions have voluntarily cut back or cut off dealings with North Korea this year, since the US blacklisted Banco Delta Asia of Macao for – the Treasury says – helping North Korean officials collect surreptitious multimillion dollar cash deposits.
A similar action against the Tehran-based Bank Saderat, accused of helping finance terror groups, was taken in September 2006 and is also featuring in the Treasury’s Wall Street offensive.
By highlighting these actions directly to bankers, the Treasury has made some foreign banks understand an implicit threat: that their access to the US market might be threatened if they do business with parties deemed undesirable by the US government.
The Treasury believes it has found a shortcut to achieving the sort of financial sanctions that might take months or years to agree at the UN.
